AIB refused me the lower LTV rate, so switched to EBS and back again to AIB.. €7k cash back

tom1ie

Registered User
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Hi all
I was with aib on the >90%ltv for a 300000 mortgage I had taken out in 2012. I asked to change ltv bands to the lower <50% around oct 2017 as my house value had gone up and the mortgage had naturally decreased. Aib refused to let me do this even when I threatened switching.

So I called their bluff and moved to ebs who were offering 3.2% (I think, can’t quite remember so I’m open to correction).

The process took about 3 months, so by Jan of 2018 I was an ebs customer and had received 2% cashback On my now 280000 mortgage, from ebs for switching.
In the meantime I checked with aib head office, and ccpc, if there was a clawback in these switching cashback offers to which I was ensured there was not due to eu competition laws.

In fact I even recall mentioning this to the ebs switcher person, to which he replied he wasn’t entirely sure, but he was sure that ebs wouldn’t be giving money away for nothing......hmmm.

So as soon as I was an ebs customer I applied to re-join aib on an ltv <50%. I explained to the aib switcher team I had just left and they applauded me for getting the cashback from ebs! Lol! I also received a 1500 switching payment, to move back to aib. (It could have been more than 1500, I can’t remember)
So I payed feb and March mortgage payment to ebs but had moved back to aib by the end of March where I took a 6 month payment break.

The 2% cashback from ebs, the 1500 switching payment, I received from aib and all the payments I didn’t pay for 6 months I saved, and overpayed my mortgage by that amount.

I will be moving to ub in January to avail of the 1500 switching payment and also the 2.3% fixed (unless aib cut their variable to below 2.3 which I doubt).
I have to wait until Jan as ub require you to be with your previous lender at least 6 months, so I’ll have payments statements from aug to Jan.
The whole process was quite quick and easy as I used the same solicitor for all moves and they turned out to be brilliant. They also took money off their fees with the second move after I negotiated with them.
I suppose this shows the madness of our banking system.
 
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Hi,
Have you got approval yet from UB?
It'd be interesting to see if taking the 6 month payment break will count against you when you go to switch - it's generally an underwriting red flag.
 
Hi,
Have you got approval yet from UB?
It'd be interesting to see if taking the 6 month payment break will count against you when you go to switch - it's generally an underwriting red flag.

Haven’t even started that process yet, but when I go to switch I’ll have 6 month payments made, aug,sep,oct,nov,dec,Jan. The break was from March to aug. I actually only think I paid one repayment to ebs, feb. However that seems like a record time switch, but then again I was back in the solicitors office within a week of drawdown to switch again.
 
Tom

That is absolutely a brilliant story.

If there were more like you, then mortgage rates would fall further.

Brendan

Thanks Brendan.
I think the big problem is people think it will be very time consuming and it would go way above their head. The minute they hear solicitor, eyes start glazing over.
If your organised and on top of things it’s really not that difficult, you just have to make sure you have a good solicitor, and that you keep on top of the banks switching team. I found the banks switching teams could be quite lax and in the case of one of the banks, quite unorganized.

It’s funny/frustrating how people complain about the cost of living, yet are quite unmotivated to cut a cost they have unfortunately got used to paying over the odds for.
 
Hi Tom

Just thinking a bit more about this. AIB refused you a cut of about 0.4% in the mortgage rate. But about a year later, you were back with AIB with the rate you had asked for in the first place.

The cost to AIB in the meantime was approximately:

upload_2018-11-15_8-26-48.png

Is that about right?
Of course I should probably add in the another few grand for the admin costs of setting up a new mortgage.

Another question - why did you switch back to AIB?

Why not switch to Bank of Ireland or ptsb and get the 2% cash back which would have been €5,600 instead of €1,500 switching fee from AIB?

It's discussed by your spiritual brother in this thread:

Advice on making the most of switcher offers - what order?
 
Good morning lads, this is great to see but Tom1ie you have missed a few tricks here :).

You are correct about how silly the banking system works.

You should have also switched to BOI and PTSB for their 2% cash back.

I have completed 3 switches now since June from EBS to PTSB to BOI and back to EBS also 2% cash back on 300k mortgage.

The unfortunate part of my story was that it cost me €24000 to break from a 5.5 % rate with EBS with 3 years to go.

What I advised others on the other pages was to apply to all the banks at the same time with all your bank statements wage slips, salary certs etc all together. That way the bank you are applying to see you have been with your bank for years and that you are only switching to them. They don't know you are going to switch again. I did this because some banks want you to be with a mortgage lender for a certain period of time 6,12 or 24 months.

I had the same experience with my solicitors as Tom1ie, very good and gave me a good price for deals 2 and 3 because there is very little work. People on here have been asking me for his details but he is reluctant because he told me he doesn't want to be seen as acting for all these people who keep switching because he said a certain bank could black list him and then he couldn't act for anyone who was getting a mortgage from that bank. He knows of other solicitors who certain banks don't deal with for a variety of reasons.
 
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Hi Sean

That is a great addition. Thanks.

The unfortunate part of my story was that it cost me €24000 to break from a 5.5 % rate with EBS with 3 years to go.

That is not that unfortunate.

You have a €300k mortgage and you were going to pay €49,500 over three years. (5.5% )

You are now paying about 3% so it will cost you €27,000 over three years.

So you are saving €22,500 interest for a break fee of €24,000.

On reflection, that looks very high. You should start a separate thread with the full information and Red Onion will probably check whether that fee was right or not.

Brendan
 
Thanks Brendan yes i have got Red Onion to check it before and he agreed that it was correct. Mortgage taken out in 2011 for 10 years at 5.5. Yes although a big amount i am saving especially with the €18,000 from cash back and hopefully a few more €€€ from KBC, AIB and Haven before a final switch to Ulster Bank for their very good fixed rates.
 
Hi Tom

Just thinking a bit more about this. AIB refused you a cut of about 0.4% in the mortgage rate. But about a year later, you were back with AIB with the rate you had asked for in the first place.

The cost to AIB in the meantime was approximately:

View attachment 3249
Is that about right?
Of course I should probably add in the another few grand for the admin costs of setting up a new mortgage.

Another question - why did you switch back to AIB?

Why not switch to Bank of Ireland or ptsb and get the 2% cash back which would have been €5,600 instead of €1,500 switching fee from AIB?

It's discussed by your spiritual brother in this thread:

Advice on making the most of switcher offers - what order?

The reason I switched back to aib was the low variable rate plus boi wanted me to be with my previous lender 12 months, ub 6 months and ptsb didn’t get back to me!
I could have switched to kbc but I chose to hedge my bets and take the 1.5k switching fee and low variable from aib.
Remember I’m not done switching! I’ll be moving to ub when my 6 months statements are fulfilled in Jan.
Also the fact aib allowed me to take a 6 month moratorium, meant I could save up the 6 months of repayments and throw that off the principle of the mortgage, thus lowering my monthly repayment going forward.
Now I know a moratorium means the remaining repayments would be slightly higher over the life of the mortgage, as it would have to be factored in, but i presume they don’t factor in you will be moving again 6 months after your moratorium is finished, so if you are going to switch 6 months after your moratorium is up I think you’ll be saving even more money, correct me if I’m wrong.
Thanks.
 
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Good morning lads, this is great to see but Tom1ie you have missed a few tricks here :).

You are correct about how silly the banking system works.

You should have also switched to BOI and PTSB for their 2% cash back.

I have completed 3 switches now since June from EBS to PTSB to BOI and back to EBS also 2% cash back on 300k mortgage.

The unfortunate part of my story was that it cost me €24000 to break from a 5.5 % rate with EBS with 3 years to go.

What I advised others on the other pages was to apply to all the banks at the same time with all your bank statements wage slips, salary certs etc all together. That way the bank you are applying to see you have been with your bank for years and that you are only switching to them. They don't know you are going to switch again. I did this because some banks want you to be with a mortgage lender for a certain period of time 6,12 or 24 months.

I had the same experience with my solicitors as Tom1ie, very good and gave me a good price for deals 2 and 3 because there is very little work. People on here have been asking me for his details but he is reluctant because he told me he doesn't want to be seen as acting for all these people who keep switching because he said a certain bank could black list him and then he couldn't act for anyone who was getting a mortgage from that bank. He knows of other solicitors who certain banks don't deal with for a variety of reasons.

I was told by boi that I needed to be with previous mortgage provider for 12 months before I could switch to them? I’m delighted this has worked for you, but they applied this previous mortgage lender rule to me. I read on another thread that ptsb are saying you have to be with previous lender 24 months now or something ridiculous like that?
It’s great to see like minded (motivated!) people on this forum!
 
Also the fact aib allowed me to take a 6 month moratorium, meant I could save up the 6 months of repayments and throw that off the principle of the mortgage, thus lowering my monthly repayment going forward.
Now I know a moratorium means the remaining repayments would be slightly higher over the life of the mortgage, as it would have to be factored in, but i presume they don’t factor in you will be moving again 6 months after your moratorium is finished, so if you are going to switch 6 months after your moratorium is up I think you’ll be saving even more money, correct me if I’m wrong.
Thanks.

Just on this point - interest is calculated on the outstanding balance so not reducing the balance for 6 months increases the amount of interest you pay. Making the payments as you go along would have saved you more in interest.

Well done on the moves though, always nice to win one!
 
so if you are going to switch 6 months after your moratorium is up I think you’ll be saving even more money, correct me if I’m wrong.
Ah, I think now you don't understand how the moratorium works?. They still charge you interest, but don't look for payment, so @Mrs Vimes is completely correct. You've cost yourself money by not paying it at the start / as you had it.
 
Ah, I think now you don't understand how the moratorium works?. They still charge you interest, but don't look for payment, so @Mrs Vimes is completely correct. You've cost yourself money by not paying it at the start / as you had it.

Yep fair enough I agree. Hopefully other people can learn from this, but Im still happy overall with my interaction with these banks so far.
It’ll update everyone in January with the ub move.
 
Hi Tom

Just thinking a bit more about this. AIB refused you a cut of about 0.4% in the mortgage rate. But about a year later, you were back with AIB with the rate you had asked for in the first place.

The cost to AIB in the meantime was approximately:

View attachment 3249
Is that about right?
Of course I should probably add in the another few grand for the admin costs of setting up a new mortgage.

Another question - why did you switch back to AIB?

Why not switch to Bank of Ireland or ptsb and get the 2% cash back which would have been €5,600 instead of €1,500 switching fee from AIB?

It's discussed by your spiritual brother in this thread:

Advice on making the most of switcher offers - what order?

Just to make a quick alteration Brendan, the aib switching payment was actually 2k, my bad.
The wife corrected me on that!:rolleyes:
 
Well done all, very interesting reading. Are any of ye concerned that the banks will "cop on" to this and eventually just refuse to provide a mortgage at some point, meaning that you are stuck with whichever lender you happen to be with at the time? Is that "allowed"? I would hate to switch for few grand and then get stuck on higher rate!

Having said that, we switched from EBS to AIB this time last year, moving from a E230K mortgage at 3.5% to 2.95% variable rate, based on 50-80% LTV. Our base repayment is E1170 per month, but as we are on variable, we are aggressively overpaying to reduce the monthly payment (100% overpayment). We get free current account with AIB mortgage, and I believe AIB pass on rate cuts fairly to existing customers. All in all, no issue with AIB.

However, as we are coming up to the 12 month period I'm having another look for switching again. From bonkers.ie website, I don't think we can do any better on the variable rate, we would need to get down to 50% LTV for that. We could switch to Haven at same 2.95% rate giving 2K cashback but most of that would be swallowed by solicitors fees, so not sure that is worth it.

For fixed, I don't really want to fix past 2 years, as we have no idea what rates will be in future. The best 1 year rate is KBC at 2.5%, giving 3K cashback, meaning we'd have give or take E1500 left over after solicitors along with lower interest rate, while the best 2 year rate is UB at 2.3%, with E1500 towards legal fees, meaning there is no benefit there, cash-wise. However, the lower rate means we would save more on interest.

Can anyone advise on best course of action, considering we are aggressively overpaying right now. I know we can overpay up to 10% of the balance, but what does that mean tangibly - is that 10% of the initial balance, or the current balance whenever I decide to make an overpayment? Its much clearer on variable, pay whatever you want wherever you want!

Thanks
 
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Username123 why don't you switch to BOI for 2% cash back and then to EBS for 2% cash back if you haven't previously availed of it before. Also try KBC for their €3000 cash back offer. If i was you i would apply to all 3 at the same time. Tell them you have been with AIB for 12 months and now want to change. Get all 3 offers in first before you make the first switch. The mortgage offer is valid for 6 months. Once you get the first cash back from BOI (about 10 days) then simply switch to EBS and do the same and then KBC, you have mentioned Haven so you should also try them. People thinks it's mad and impossible but if you get all the necessary paperwork together just make 4 copies of everything and send in your application. If your credit history is perfect then you will be fine. Get a variable rate each time as it speeds up the process when you are closing one mortgage and opening up another one. The biggest problem now is getting a solicitor on board. Some seem to be a bit reluctant but they shouldn't be. All you are doing is following Government and Central Bank advice by switching to get a better deal. Remember less than 1% of people switch so we are in the minority and the Banks don't really care.
 
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