Charlie Weston: Banks too slow on mortgage applications

Brendan Burgess

Brendan Burgess

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Mortgage delays: thousands risk being forced onto higher interest rates as banks too slow on switcher applications

Thousands of homeowners face being caught by the wave of rising interest rates because overwhelmed banks are too slow to process their mortgage-switching applications.
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It is now taking up to four months to complete a switch. The reason is a backlog of borrowers rushing to move to a lower-cost provider ahead of mortgage rate rises.

Any delay will leave borrowers at a high risk of missing out on the interest rates currently on offer.

Banks lend at the rate at the time a mortgage is drawn down, not the rate offered at the start of the process.
 
slow roll means more ching ching (if you know you know, famous BOI 90's add) Irish banks will behave badly at evrey opportunity
 
Brendan Burgess said:
It is now taking up to four months to complete a switch. The reason is a backlog of borrowers rushing to move to a lower-cost provider ahead of mortgage rate rises.
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I've switched a few times over the years, and I would say four months isn't unusual at any time, and its not because of a backlog of borrowers rushing either - banks and solicitors just don't do anything in a hurry. There are docs that are needed and tasks to be undertaken, but there is no reason it can't be done a a hell of a lot quicker. I wouldn't be as cynical to say they are doing it deliberately to put customers on higher rates.
 
This is correct with some lenders, but not all. Finance Ireland have just gone out to 33 days for a credit decision with 4 days for a loan offer, Haven are at 15 days for approval with loan offers are taking 15 days. With the other steps in the chain this will push out timelines to 4 months on average (from application being submitted). I would imagine AIB & EBS are similar as they are part of the same group as Haven.

ICS have effectively removed themselves from the market with recent rates and approval changes.

However, PTSB and BoI are still able to get things turned round in 3 months end to end and Avant are back to being able to switch in about 2 months. A lot of the switching business is now going back to Avant as a result, so they may end up struggling again, but for now they are able to cope.
 
Trying to switch to Haven at the moment.
I got in touch with the broker late March, submitted docs in April and he put in application on May 6th. Only received AIP last week. Put in application to BOI in late July as fed up waiting for Haven and AIP came on the same day as Haven. So haven took 18 weeks and BOI about 7 weeks. Don’t know how long it will take until drawdown as we need to get the house valued.
 
MsCutha said:
Trying to switch to Haven at the moment.
I got in touch with the broker late March, submitted docs in April and he put in application on May 6th. Only received AIP last week. Put in application to BOI in late July as fed up waiting for Haven and AIP came on the same day as Haven. So haven took 18 weeks and BOI about 7 weeks. Don’t know how long it will take until drawdown as we need to get the house valued.
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BoI are much quicker than Haven on drawdown, so if you’re after speed they should come through a couple of weeks earlier. That said if you’re switching Haven’s average rate across your term is much better than BoI so you should weigh up the pros and cons. If your broker has all the lenders talk it through with them.
 
Brendan Burgess said:
Why would anyone switch to BoI?
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@MsCutha has suffered massive delays trying to switch to Haven and is afraid that they will put up their rates before drawdown.

Switching to BOI is OK if she is able to switch to another lender in a few years' time, but there are loads of reasons why this might become impossible.

(I agree that in most cases BOI should be avoided.)
 
@Mark Coan we decided to stick with Haven in the end due to BOI rates after fixed period ends.
@Brendan Burgess I've been trying to switch since May and finally got approval last week. Was a last resort attempt as I’m with UB. Will be sticking with Haven now.
@Paul F you remember my Haven woes
We had Haven valuer over today to value the house, so hopefully it will be quicker from here on. Only downside with Haven is that we are looking to shorten the term from 29 yrs to 20 but apparently they are much stricter and calculate affordability based net disposable income so can be reduce term to 26 years. Ot is a huge difference they don’t allow overpayment.
 
MsCutha said:
Only downside with Haven is that we are looking to shorten the term from 29 yrs to 20 but apparently they are much stricter and calculate affordability based net disposable income so can be reduce term to 26 years. Ot is a huge difference they don’t allow overpayment.
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Keep in mind that you can ask them for a break fee quote at any point in the future and if it is zero (or low enough for your tastes) you can make an overpayment.
 
I don’t want to be the bearer of bad news, but I’d warn that Haven are the slowest of all lenders at loan offer, 15 working days at best case so a month, versus a day with some lenders. Avant may still be quicker even though you would be starting from scratch, have you looked at this as an option and ruled it out?
 
@Mark Coan I’ve been warned that they take 25 working days. I’m so fed up of the entire process and I don’t want to start it again. A friend switched to Avant and it took almost 4 months for the entire process. I’d rather refix wit UB than start again.
@Paul F i didn’t know that thank you.
 
I'm still waiting on approval from three different lenders, having started the process in May! Feels to me like the banks are deliberately holding off on new lending in general.
 
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