Any reason not to switch from AIB to ICS

D

Duke of Marmalade

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Friend currently paying 2.45% fixed on AIB mortgage. ICS is charging 1.95%.
Any reason not to switch?
(There would be no penalty on breaking AIB fixed period)
 
Duke of Marmalade said:
Friend currently paying 2.45% fixed on AIB mortgage. ICS is charging 1.95%.
Any reason not to switch?
(There would be no penalty on breaking AIB fixed period)
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The only disadvantage that I can think of is the inability to get a top-up.

EDIT: The above is rubbish. I read ICS as Avant for some reason. ICS do top-ups.
 
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ICS is attractive for new customers. But they do not quote rates for existing customers. When the fixed rate is up and your friend sees a good rate in the ICS ads, and says "I will have that" they will say "No, the rate for you is 4.2%".

If your friend can and has the organisation to move then fine. But if there is any hiccup, he becomes a prisoner of ICS.

So he should avoid ICS.

Any reason he would not go for Avant or Finance Ireland?

Brendan
 
Ok mixed advice from two of the guys I most trust on AAM!
I see the problem Brendan is referring to but it will be a 5 year fixed rate and he is hopeful of career advancement so I think he can avoid becoming an ICS prisoner. That may come to haunt me in 5 years time
 
Avant Vs ICS are probably the best rates on the market right now. So either will likely be an improvement over current position. But perhaps a bit more info might help pick one versus the other

What are your friends plans? Is he in the forever home? Might something like a family necessitate moving home over the next 5-7 years. Or would the current home allow for an extension (top up loan)? At the current salary how much can be afford to overpay if anything. How much of the loan with be outstanding in 5 years time. How would that change with career progression?
 
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Brendan Burgess said:
ICS is attractive for new customers. But they do not quote rates for existing customers. When the fixed rate is up and your friend sees a good rate in the ICS ads, and says "I will have that" they will say "No, the rate for you is 4.2%".
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So I followed up on this with the broker for my mortgage switch and the response was that Avant and ICS follow on rates are available "as advertised". I'm not going with ICS in any case and the information is second hand so caveat emptor.
 
Thanks. He is fairly comfortable with his current financial commitment, LTV about 60%. I take it you don’t dismiss ICS. I don’t think he would appreciate me confusing him by throwing Avant into the mix. I think his problem is he feels a certain loyalty to AIB.
 
Duke of Marmalade said:
I think his problem is he feels a certain loyalty to AIB.
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Unrequited loyalty.

Duke of Marmalade said:
I take it you don’t dismiss ICS.
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1.95% for five years is a good deal. Yes there is uncertainty about roll off rates but given we're talking 5 years away nothing from any lender is certain.

For me ICS is better suited for aggressive overpayers with expected short mortgage terms. A low medium term rate with the capacity to overpay 20% a year is the rationale.

Whereas Avant offer the same rate for a longer fixed terms. The roll-off rates are known and are lower than ICS. While the overpayments are not as generous, 10% pa is still pretty good. They also offer greater flexibility to avoid large beak fees if you move home but keep the enlarged mortgage with them.

To me Avant suits anyone other than the most aggressive of mortgage overpayers.
 
To be fair, on paper an ability to overpay 20% sounds better than 10%, but in reality for most people 10% is a lot of money.
 
For most people I would imagine it is the case but a combination of increasing wages and reducing mortgage balance mean many will hit the point where we are capable of overpaying but more than 10%. How quickly you approach that point is a potential factor to consider.

Of course lets not get bogged down to much in the 10% Vs 20%. Avant customers like all mortgage customers can overpay by as much as they like subject to a break fee. Another positive for Avant is they cap this fee.
 
Does anyone know how much partial overpayments (over the 10%) cost with Avant? I am tempted to go to ICS for the 20% but the broker says the switching process is more involved with them (and Avant are rumoured to be offering legal fees in Q1, although I’ve not seen any update on that yet)
 
The penalty for an overpayment (above any allowance like Avant's 10%) is calculated using essentially the same formula as is used for calculating the break fee when switching lenders. But instead of the outstanding mortgage balance, they use the amount you want to overpay.

This means that the penalty will depend on:
  • how much you want to overpay
  • how long is left on your-fixed rate period
  • how much interbank interest rates have moved since you fixed
So it is pretty much impossible to predict, except to say that if interbank interest rates rise after you fix, the penalty will be zero.
 
Gordon Gekko said:
The only disadvantage that I can think of is the inability to get a top-up.

EDIT: The above is rubbish. I read ICS as Avant for some reason. ICS do top-ups.
Click to expand...

Do Avant not do Top Ups?

Edit: I just checked with my broker who confirmed Avant changed policy and do allow top ups / equity release
 
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My broker told me it's only for Ulster Bank and KBC customers i.e. for customers of banks leaving to tempt them to switch
 
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