BoI reduced my rate from 4.5% to 3.3% variable (87% LTV) when I told them I was switching.

pumba

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Hi I just thought I'd post my experience in case it would be of use to anyone else.

We took out a variable rate mortgage with BOI in 2014 LTV 90% and APR 4.5 %. We also availed of the 1% stamp duty cashback offer.

I looked into switching before now for a better rate but I was afraid BOI would try and clawback the stamp duty cashback however from following the posts here I realised this was unlikely.

So I looked into switching recently, and the best offer was from AIB who were willing to give me a variable rate mortgage with APR of 3.5 % and 2000 euro towards legal fees.

Before I proceeded with AIB I rang BOI mortgages in Dublin to verify the outstanding balance on the mortgage and the remaining term both of which I wasn't sure of. While on the phone the agent asked why I was checking these details and I told I was going to switch AIB who had offered me an APR of 3.5% the BOI agent asked could she check to see what they could do for me and ring me back. I said fine not really expecting anything. By the way our current LTV based on her figures is 87%.

Five minutes later I got a call saying the lowest rate they could offer me was variable rate mortgage with APR of 3.3%!!! Which I accepted and the official paperwork has since come through confirming this. So it took 2 phone calls to drop our APR by 1.2%.
 
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Wow!

Well done. Can I just double check that it is a variable rate and not a fixed rate?

I have edited the title of your thread to make sure people notice it.

Brendan
 
Definitely variable rate have it in writing. They actually offered me 3% APR fixed rate for three years as alternative but I declined.
 
That’s an impressive result @pumba although I do wonder what BOI's strategy is here. I know many people on much lower LTV’s that BOI will not budge on despite a number of calls. I wonder if they have done some ‘profiling’ of customers as to ‘propensity to churn’ and offer better deals based on that.


I wonder if the banks have access to how often people switch utilities, and if so does that influence their decisions? Maybe I am giving them too much credit (highly possible)
 
Wow. I'm a BOI Premier customer and am applying for a mortgage with a LTV of less than 50% and they wouldn't budge on their rates for me.
 
Actually gnf I think you may be right there. I was shocked when they came back to me with 3.3 and I think it may well be to do with the fact I do all my banking with them and am a good customer. I was actually thinking of diverting a lot of my finances into the AIB current account I was going to have to open to finance the mortgage with AIB because AIB are offering no transaction fees on the current account feeding the mortgage.
 
Well done Pumba. I have a LTV of 30% with BOI and can't get better than 3.6% variable or 3.1% fixed for 3 years.
 
I have a LTV of 30% with BOI and can't get better than 3.6% variable or 3.1% fixed for 3 years.
Sadly the 90% ltv of the OP is way more valuable for them so I guess they are playing the numbers, unless of course your mortgage is still very large.
 
Sadly the 90% ltv of the OP is way more valuable for them so I guess they are playing the numbers, unless of course your mortgage is still very large.
Yes, but to be fair a 90% LTV is also a much riskier loan.

A 30% LTV is effectively risk free.

But yes, the size of the 30% LTV loan may mean that they are not able to switch (or likely to to) and therefore less of a risk. A customer who has a lot to gain by switching would be more inclined to do so, especially if they take all their other business with them.

I know I am probably not that profitable for my bank - I dont pay charges, I dont pay interest on my credit card etc. I dont have deposits with them as they are not the best rate on the market. I dont have any assurances with them. The only money they get off me is the mortgage interest. They dont have a huge pile to lose off me if I was to switch, whereas for others it could be very different.
This is back to attaching value segments to customers, not just on their income (premier etc) but on their value to the bank itself from the money they make off them
 
My 30% LTV equates to 250k with 8 years remaining .I also have a first class credit record.
 
I was shocked when they came back to me with 3.3 and I think it may well be to do with the fact I do all my banking with them and am a good customer.

Don't ever be fooled into thinking a bank is doing you any favours. You are just a number for them. Also I'd seriously consider taking the 3 year fix if I were you. 3% is not to be sniffed at.

Great that you highlighted on here that it's so simple to get a better rate.
 
The only reason the bank is offering you a variable rate at 3.3% and a 3 year fix at 3% is because they think these are equal in terms of expected value to the bank over the 3 years.

That usually means the fix is more expensive because the bank reckon the cost to them as higher when they give up the opportunity to vary the rate. It may be that BOI have a new model and are not building this cost into their rates at the moment because they now prefer fixed rates.

Either way you will only profit from a fixed rate if a) you are lucky (unlikely) or b) you know more about pricing mortgages than the bank, (this should be very unlikely but who knows).

But in any case well done on getting this reduction, and well done for sharing the information on here.

And for what it is worth I think you were right on the fix as well.
 
Bronte I'm not naive enough to think the bank were doing me any favours. I think you misinterpreted my meaning when I said that I do all my banking with them and am a good customer what I was inferring was that perhaps the bank had cottoned on to the fact that while switching my mortgage to AIB there was a good chance I was going to move most of the rest of my banking to AIB to avail of what they had to offer. I know I'm just a number to the bank i'm under no illusions but when they came back to me with such a good offer of course I questioned the motivation. The other factor may be that there are a lot of people switching from BOI at the moment as there are much better rates available from other lenders and BOI have realised now they must do something to stem the tide. As you say 3% fixed rate not to be sniffed at but there is a lot happening in terms of variable rate mortgages at the moment and I was happy to forego the 0.3% for the flexibility of being able to overpay lump sums if I can or switch if I want to in the next three years.
 
Clonback,AIB are offering APR of 3.1% variable rate LTV < 50% with 2000 euro towards legal fees and KBC are offering APR of 3.0% variable rate LTV < 50% and 2000 euro towards legal fees for switchers at the moment.
 
The only reason the bank is offering you a variable rate at 3.3% and a 3 year fix at 3% is because they think these are equal in terms of expected value to the bank over the 3 years.
And given that you were ready to switch it's worth something for them to lock you in for 3 years.
 
Pumba
Unfortunately due to my age I am stuck and cannot move.
But 3.1% fixed for 3 years appears to be my best option.I can overpay by 10% of my current monthly variable payment.
 
I also rang and asked for redemption figures, got a call the following day offering me 3.1.%, and they will waiver the valuation fee. ( how sweet)

So for anyone with BOI make that call.

Moderator note: This is for a three year fixed rate which is widely advertised.
 
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Hi Onceagain

How long ago did this happen?

Did you ask for a lower rate or just for the redemption figure?

Brendan
 
I rang 3 weeks ago out of curiosity, asked could they offer me a better rate, chap said 3.5%. At that point I said can you send me a redemption figure, and ended call. Got 3 missed calls in work the following day, having reviewed my file bla bla, can offer me 3.1% fixed no valuation fee.
For anyone in a position to fix, make that call. Big difference monthly.
 
3.1% fixed for 3 years is freely available from BoI since last year.
Onceagain
You got no special deal.
 
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