Bank of Ireland Life Loan interest rate

[legal33]

My understanding is that the Bank of Ireland Life Loan (designed to release equity on property to those aged over 65) was at a fixed rate compounded at about 6.9% for 15 years. These loans were first issued in 2001. Does anyone know the new rate (fixed or variable) since 2016?

Edit: I know the BoI Life Loan product was stopped for new customers around 2010.

Thanks

 

[Brendan Burgess]

Hi legal

I have been asked about this by two separate people recently.

Both told me that the bank just unilaterally reduced their mortgage rate without them asking.

I am guessing that this was because the 15 year fixed rate period expired and they defaulted to a lower rate.

In one case, I have seen the statement and it's 3%. I assume it's a variable rate, but I don't know.

In the same case, she drew down the loan in two tranches, and the other loan is at 5.5%, so I am guessing that the fixed rate has not ended yet.

The other told me that they thought it was less than that, but they can't remember. I have asked them to get me a statement.

They were also asked to sign something by BoI when the 15 years was up but they didn't understand the form and didn't sign it. BoI didn't follow up. It might have been some Central Bank requirement.

 

[Brendan Burgess]

The implications of all this is that if someone has one of these loans, the family should be looking at ways of repaying it in whole or in part,early.

Of course, if it has switched to a variable rate, then it can be repaid in whole or in part without penalty.

If it is still in the fixed rate period, there probably would be an early break fee.

If the loan is still at 5.5% with 5 years left of the fixed rate, one way around it might be to buy the house from the parent. If I recall correctly, there is no early repayment fee if the house is sold.

Brendan