Key Post I can't switch mortgage provider - can I get a better rate?

RedOnion

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Edited 24/07/2018 to reflect changes to UB and PTSB options for existing customers. KBC rates listed will not be available until 03/09/2018
There were a lot of edits, so feel free to point out any errors / ommissions - error re KBC rates corrected 28/07/2018

This post focuses on those lenders still active in Ireland.

There are several reasons why someone can't switch mortgage provider, whether it's negative equity, previous arrears, lack of disposable income, or even working in contract employment.

But just because you can't switch lender doesn't mean you can't get a better rate with your current provider, sometimes with little or no work.

Charlie Weston covered this recently in the Independent here.

So, what are the options for customers of each bank?


The below are based on published rates from each lender, and do not reflect the possibility of negotiating rates, which are covered elsewhere.

All calculations below are based on 200k remaining balance with 20 year remaining term. TRS is ignored for simplicity.

For AIB customers, see separate post below.

Scenario 1:Borrower with >90% LTV (including negative equity), currently on banks SVR.

BankSVRCurrent Repay>90% LTV, including Negative EquityRateRepaymentSaving per month
KBC4.25%1,238Open Current account, 0.2% Discount4.05%1,21721
---Fix for 2 Years, with current account2.6%1,070168
---Fix for 3 Years, with current account2.65%1,074164
---Fix for 5 Years, with current account2.8%1,089149
Ulster Bank4.30%1,2442 Year Fixed, see note2.30%1,040204
---4 Year Fixed, see note2.60%1,070174
BOI4.50%1,265Fix. 1, 2, 3, 5 year at 3%3%1,109156
EBS3.70%1,181Fix. 1, 2, 3, 5 year at 3%3%1,10972
PTSB4.50%1,265Managed variable Rate > 90% LTV4.30%1,24421
---2, 3 or 5 year fix3.70%1,18184

Scenario 2
: Borrower with 80 - 90% LTV, but can't switch to another lender.

BankSVRCurrent Repay80 - 90% LTV, but can't switch lenderRateRepaymentSaving per month
KBC4.25%1,238Open Current account, 0.2% Discount3.50%1,16078
---Fix for 1 Year, with current account2.90%1,099139
---Fix for 2 Years, with current account2.6%1,070168
---Fix for 3 Years, with current account2.65%1,074164
---Fix for 5 Years, with current account2.8%1,089149
---Fix for 10 Years, with current account3.75%1,18652
Ulster Bank4.30%1,244Loyalty rates. Open Current account3.70%1,18163
---2 Year Fixed, see note2.30%1,040204
---4 Year Fixed, see note2.60%1,070174
BOI4.50%1,265Fix. 1, 2, 3, 5 year at 3%3%1,109156
EBS3.70%1,181Fix. 1, 2, 3, 5 years at 3%3%1,10972
PTSB4.50%1,265Managed variable Rate 80 - 90% LTV4.20%1,23332
---2, 3 or 5 year fix3.70%1,18184

If you haven't moved to a fixed rate because you don't understand them, or you're worried that there might be large break fees in the future, have a look at the key post: https://www.askaboutmoney.com/threads/it-may-be-much-cheaper-than-you-think-to-break-out-of-a-fixed-rate-early.204442/
 
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Brendan Burgess

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A great piece of work Red Onion. Some notes off the top of my head.

Maybe a note about AIB? It's complicated. I think that they can move from the SVR to the latest LTV rate. But they can't move if they are on an LTV rate.

Maybe a Tips section?

For example.
Check if paying a lump sum off the mortgage would bring you down into a lower LTV category.

Fixing is the right idea at the moment as you will probably be able to break out free of charge if rates fall.

In terms of layout...
I would put the New rate column - beside the SVR column. And maybe a column beside them to show the reduction.
Or Get rid of repayments and just show the saving.

Brendan
 

RedOnion

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One of the biggest changes over the past few months is that the latest cuts in fixed rates by both EBS and BOI removed LTV bands. This means that even those customers in negative equity can benefit from their lower fixed rates.

(To update with links to sample posts where people have done this).
 
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RedOnion

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Thanks Brendan,

I'll have a look at the tables again when I've time to play around with layout. As usual I've too much info!

I might do a separate post on the AIB LTV bands now we've a better view of what they're doing.
 

RedOnion

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AIB focus:

I haven't mentioned AIB in the top post, as the focus was on those either in negative equity, or with >80% LTV, which covers the majority of those who cannot switch.

However, there are cases where borrowers might not be aware of other rate options available to them.

In the case of AIB, they already have the lowest SVR rate at 3.15%. That is exactly the same rate that is also available to all borrowers with LTV >80%, so if you are on an SVR and your LTV is >80% there is currently no point in switching to LTV unless you can get under the 80% valuation. (Note: keep an eye on rate change announcements in case this situation changes).

Now, there's a reason it's important not to select LTV if you're in this situation.
AIB's current policy is that if you are on SVR, and have never been on an LTV rate, you can select to get an LTV rate. You just need a current valuation of your property.

However, if you have been previously on an LTV rate, you generally cannot change to another band (there are some exceptions to this - lots of threads on the topic already).

If you can wait until your LTV is below 80%, and have never been on an LTV rate previously, you can move to their lower LTV band at 2.95%.

What about their fixed rates?
Well, while AIB offers the most competitive variable rates in the market, they haven't directly competed with the other lenders on the fixed rate front (they are doing that through their subsidiary EBS). Their best fixed rate is 3.2% available up to 3 years, or 3.3% up to 5 years, or 3.5% up to 7 years. There is no LTV criteria for these rates so they are available to everyone. If you want certainty of repayments, and can't switch lender, then go for their fixed rates.
 
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RedOnion

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RE PTSB (Updated 24/07/2018)

Now, PTSB customers who cannot switch lender can still get a better rate.
My view is that those on SVR or even the highest MVR bands SHOULD FIX if they can't switch to another lender. The rates for >90% LTV are 0.5% lower fixed. Remember, these are available even if you are in negative equity.

Note: there is a 100 euro charge with PTSB to switch to a fixed rate.

My original thoughts from January before PTSB reduced rates are captured in the following thread:
https://www.askaboutmoney.com/threads/fixed-or-mvr-when-ltv-90.206794/#post-1550449
 
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RedOnion

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RE KBC

The rates reflected in top post above reflect the KBC rates that will be available from 03 September 2018.

Focus in post is in those with high LTVs. Because KBC has different rates for each band, there are slightly lower rates available if you've a lower LTV.

There are some points to note with KBC:
1. An existing customer can avail of 'new business rates', but MUST apply for them
2. To avail of 'new business rates', you will need valuation less than 4 months old. This costs 127 euro
3. A customer cannot avail of new business rates if they are in arrears, unless they have started MARP process with KBC
4. Rates quoted include 0.2% discount for having current account with KBC

For customers with LTV >90%, KBC say they can avail of 2, 3 or 5 year fixed rate options. However, their latest rate announcement only has rates up to 90% LTV, so I've assumed these are available.

Details of latest rate cuts: https://www.askaboutmoney.com/threads/kbc-cuts-fixed-rates.208935/
 
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RedOnion

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RE ULSTER BANK

In their press release on 17th July, UB announced that 2 & 4 year fixed rates are now available for ALL LTV Bands.

If this is correct, these are extremely attractive rates to those with >90% LTV.

The opening post refers to those on high LTVs as they're most likely to be unable to switch lender, but there are more rate options if you've a lower LTV. The 2 and 4 year terms are their headline rates at the moment.

Note: an up to date valuation is required although same rate applies to all LTV bands.

Press release: https://digital.ulsterbank.ie/content/dam/Ulster/CorporateAffairs/MediaRI/FixedRate29Jun18.pdf

Some discussion in the following thread: https://www.askaboutmoney.com/threads/ulster-bank-cuts-mortgage-rate-to-2-3-fixed-for-two-years-all-ltvs.208751/
 
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RedOnion

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RE BOI

Bank of Ireland have no LTV criteria for their fixed rates, so whether you've >90% LTV, or even in negative equity, you can get a significantly better deal by fixing.

For an existing customer on an SVR of 4.5%, they can currently fix for any term from 1 to 5 years at 3%. Even if you don't like the idea of a fixed rate, you really should fix for 1 year.

Not switching because you're thinking of trading up / down? BOI have stated that people can keep the fixed rate they have when they move.
 

RedOnion

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RE EBS

Similar to BOI, EBS have removed all LTV criteria from their fixed rates.

Even though the rate differential is lower the advice is the same - fix at 3% rather than paying a SVR of 3.7%!
Rate of 3% applies for any term from 1 to 5 years.

Edit: Feb 2019. EBS have made new business LTV rates available to existing customers.

https://www.ebs.ie/mortgages/ltv-rate-change
 
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