AIB 5 year green at 2.1% (plus €2,000 cashback) v Avant/Finance Ireland 10 year at 2.4%?

T

The Oggster

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Thanks to Paul F for his great thread and his recommendations. I think we have narrowed it down to the above 2. Any suggestions on which we should go for? We're currently with KBC.

AIB
Cashback covers the legal fees
Can possibly over pay any amount according to a couple of threads on here
Will open a joint account too with no fees because of the mortgage
Will probably have CC and savings with them too so handy to have it all in the one place (although I'm not bothered if they're in different institutions
But will probably be looking at high rates after the fixed ends

Avant/Finance Ireland
Piece of mind having a fixed rate for 10 years
Option to overpay 10% a year

Balance is €160,000 with 23 years left.

I filled in our details on AIB today and have AIP. Obviously have to gather documents now. Have started the process on Avant website too.
 
@The Oggster A couple of points to remember about Finance Ireland:
  • Their 10-year and 15-year fixed rates are the same
  • Their 10-year and longer fixed rates allow you to "take your mortgage with you" if you move home – meaning that you get to keep the same interest rate as the rate you first fixed at, and they will waive or refund any break fee (subject to certain conditions)
See this page for details on the second point:
https://www.financeireland.ie/products/residential-mortgages/long-term-fixed-rates/
The savings by going with AIB are obviously bigger over the next 5 years, but it is impossible to know where rates will be after that.
 
At 2% plus margin 2.5 that's 4.5 , at 3% it's 5.5% .I personally think rates will be 5% soon retail and for buy to let and business mortgages 7%. 2% is too cheap as the properties are essentially free if inflation is 2%.
A backstreet lender may be able to save a little on those rates.
The 15 year finance Ireland and Avant's are stunning deals if you can access them. Personally I think a switch is too late unless maybe if you go with Avant and your credit history is perfect. I think they are honouring people in the system so that should carry through. It's 10% of the balance also that can be overpaid so the loan can be repaid much more rapidly. I suppose many people if they save really hard and cut back on any luxuries can repay the loan in 15 years negating future issues. Even 10 year fixed isn't bad if your willing to dig deep and repay most or all of it. Even if not the lower loan means less of the payment amount goes on interest in 10 years.
 
I'm more leaning towards the long term rates now. If I can lock in 2.4% for the long-term think it would be great. Especially if ECB does go to 2% over the next few years. I'm currently paying 2.6% anyway.
 
I have the ball rolling on AIB and with a broker who deal with Finance Ireland.

I can't decide on what I should do

Thinking again about AIB giving 2.1% (presuming it doesn't change before we drawdown) and €2,000 cashback.

AIB 2.1%
Finance Ireland 2.4%
Balance owed €160,000

Am I right in saying
€160,000 * 0.3 = €480

AIB's is a 5 year fixed so around €2,400 cheaper + €2,000 cashback = €4,400 cheaper over the 5 years. Plus fee free current account.

The only problem then is where will rates be in 5 years time.
 
Yes, that is broadly correct. AIB would be about €4,280 cheaper over the 5 years (because the interest you pay decreases each month, so €160,000 * 0.3% * 5 is only an approximation).

The Oggster said:
The only problem then is where will rates be in 5 years time.
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Exactly. If AIB's rate is 2.8% or higher in years 6 to 10, you would have been better off on Finance Ireland's 10- or 15-year rate. But that is crystal ball gazing.
 
Have myself driven demented here

After initial contact with Doddl I haven't heard anything in a few days. Will try another broker.

Trying to compare over the 10 year of the Avant 2.4% (I fully realise this may be moot if they change their rates before we can draw down).

Starting balance of €160,000

AIB for 5 years at 2.1%
At the end of the fixed term
Balance: €131,467.13
Interest paid: €15,353.17
Then I did 5 years at 4.5%
Balance: €105,867.90
Interest paid: €26,749.45

So after 10 years
Balance: €105,867.90
Interest: €42,106.62

I know it's a stab in the dark on the interest after 5 years but I thought I'd go quite high for the comparison.

Avant 10 years at 2.4%
Balance: €101,080.28
Interest: €31,670.80

The other option, is fixing again with KBC at 2.85% for 10 years with no switching fees.
Balance: €103,013.70
Interest: €37,931.85

We would be BOI customers by that stage but with a much lower balance.

We will probably over pay by €300 a month.

In this scenario I get
AIB
Balance: €69,599.16
Interest: €35,139.39

Avant
Balance: €60,438.61
Interest: €27,029.12

KBC
Balance: €61,416.30
Interest: €32,334.44

Even with AIB having €2k cashback, Avant look the winner.
 
Paul F said:
@The Oggster Whatever you ultimately decide, apply immediately to both Avant and AIB for approval in principle.
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Doddl saying switching is taking a minimum of 12 weeks

I'll tell them to go ahead anyway. Maybe we can get AIP quickly and they might honour it. We have most documents already as we have been uploading them to AIB.
 
What's your LTV oggster? KBC are 3.05 for 10 years under 60ltv that's way below what the wholesale +retail margin is at the moment which would be 2.5+1.5-2.5
 
The Oggster said:
Doddl saying switching is taking a minimum of 12 weeks

I'll tell them to go ahead anyway. Maybe we can get AIP quickly and they might honour it. We have most documents already as we have been uploading them to AIB.
Click to expand...
Can you try going direct to both lenders as a hedge for brokers being too busy?



lomber said:
That's a very good(mispriced) deal imo I'd be saying where do I sign!
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Agreed - pricing is farcical now. Methinks a big price shock is coming from the banks.. they will have led us all up a garden path to fill their pipeline in the process
 
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