EBS now offering 2% cash back up front and another 1% after 5 years.

Discussion in 'The Fair Mortgage Rates Campaign' started by tommyryan55, 3 Jan 2019.

  1. tommyryan55

    tommyryan55 Frequent Poster

  2. Brendan Burgess

    Brendan Burgess Founder

    Hi Tommy

    EBS has "announced" it today

    9th January 2019

    EBS launches new 3% Cash Back proposition for new mortgage customers

    · As much as 3% cash back available to customers taking out new fixed or variable rate mortgages on Private Dwelling Homes in Ireland

    · €9,000 cash back on a €300,000 mortgage, €12,000 on a €400,000 mortgage

    · EBS Mortgage Masters now offering our best cash back offer we’ve ever had

    EBS today announced a new Cash Back mortgage proposition which offers new mortgage customers 2% cash back on their mortgage at drawdown and an extra 1% cash back five years later. You must draw down the mortgage loan between 1st January 2019 and 31st December 2019.

    The 3% cash back offer means that eligible customers, including first time buyers, a mover, or customers switching their mortgage to EBS, will receive €3,000 back for every €100,000 in new mortgage borrowing drawn down.

    EBS Managing Director Des Fitzgerald said “The enhancement of the cash back offer along with EBS’s low fixed mortgage interest rates of 3% for 1 to 5 years, means that first time buyers and customers who choose EBS for their mortgage have an excellent value proposition in helping them find their home. Our team of Mortgage Masters in 70 communities across Ireland work with people every day to help them achieve that dream of home ownership”.

    The offer of 3% cash back is available to customers taking out new fixed or variable rate mortgages on Private Dwelling Homes in Ireland, including first time buyers, customers moving to a new home, and customers who wish to switch their mortgage to EBS.


    Notes to Editors:

    The EBS Private Dwelling Home Fixed and Variable Mortgage Rates are summarised below:

    If an existing customer is already on a fixed rate mortgage and wants to avail of the new mortgage rates, an early breakage cost may apply.
  3. renter45

    renter45 Frequent Poster

    So no change in their 3% fixed rates, just an extra 1% at the end of a 5 yr lock in.
  4. HollowKnight

    HollowKnight Frequent Poster

    It's just a disincentive for people who switch often. The promise of another 1% will keep the average person with EBS.
  5. Puddin

    Puddin Registered User

    Does anyone see EBS lowering fixed rates to compete with UB and others ? I'm on 5 year fixed at 3% with EBS and may look at moving to UB this year if rtaes stay at 3%
  6. newirishman

    newirishman Frequent Poster

    that is an interesting proposal. I am on a 2.6% fixed rate with Ulster at the moment, outstanding mortgage close enough to 300K that I could do a 300K switcher mortgage.
    (Assuming no break fee at this point).
    say 14 years left:
    UB 2.6%, monthly payment: ~ € 2,130, outstanding after 5 years: €203,378
    EBS 3%, monthly payment: ~ € 2,186, outstanding after 5 years: €205,210

    5 years repayment difference: approx +3,360 with EBS
    balance difference: after 5 years: +1,182 with EBS

    cashback total after 5 years: € 9,000 euro
    difference: 9,000 - 3,360 - 1,182 = 3,808
    cost for switching: about 1,300 euro
    gross profit: 2,508 euro or 41.8 euro per month (ignoring interest)

    That's assuming the UB rate of 2.6% is stays the same after the current offer runs out in March 2022

    Plus of course paperwork, time to go to solicitor, etc.

    If I go for more than 14 years, the profit shrinks quite quickly.

    What to do now....
  7. Brendan Burgess

    Brendan Burgess Founder

    Hi newirishman

    I will say this yet again. Ignore repayments.

    Compare the additional interest with the cash back and other costs.

  8. newirishman

    newirishman Frequent Poster

    Initially I thought I might not agree with you, also because repayments are important from a cash-flow perspective!

    Had a look anyways:

    Interest payment first 5 years @ 2.6% rate: € 32,887.28
    Interest payment first 5 years @ 2.6% rate: € 38,068.56
    difference: € 5,181.28 plus switching costs € 1,300 = € 6,480
    minus € 9,000 cashback = € 2,518.72 profit by switching. Hey!
    Balance after 5 years on 2.6%: € 205,067.30
    balance after 5 years on 3.0%: € 206,882.87
    difference: € 1,815.57 - minus the "profit" above = € 703.15

    so the real profit is actually only 700 euro. That is genuinely not worth my time spent for the switching process.

  9. RedOnion

    RedOnion Frequent Poster

    No, you were closer first time. You're mixing up cashflow with cost.
  10. Sean Og

    Sean Og Frequent Poster

    Why don't you do the multiple switches to PTSB, BOI and EBS all for their 2% cash backs offers. €6000 a time less solictors fees. Then go back to UB FOR their 2.3% rate.