Is it stupid to NOT switch mortgages..can't decide what to do?

G

Guest121

Guest
Hi
Please bear with me, I need help from those in the know.
Our situation is this;
Fixed rate (PTSB) ended in Dec, and now at 4.8%.
We would qualify for the NIB loan to value mtg, at a rate of 4.5%.
Doing the sums and talking to NIB rep, we would make a saving of something like €16 per month on repayments. (factoring in TRS)
To switch it would cost us approx solr fees and valuation fee total; 930 minus refund from NIB 600 = 330.
We could use NIB legal team but in not so many words were discouraged from doing so as they are very very slow, by NIB rep.
I would prefer to use my own solr anyway, long time contact/friend etc.
When we met with NIB rep, I was never less sold a financial product in my life. It was almost as if she was discouraging us from going ahead.
Very confusing and not at all expected.
We would also have to open an account with NIB, arrange for the salary to go into it. It is not compulsory but rep told us that as the whole switching thing had kind of backfired on NIB as in they had loads of mortgage switchers but no account take up, they now would look most favourably and move quickly on new account holders as well.
So why are we so slow to change?

Are we stupid to not switch now while the offer still stands.
Other little things....
EddieHobbs referenced the NIB ltv mortgage about four times in Jan mag, this got me thinking.
The NIB branch that would be our local one was as quiet as could be when we visited, we thought it was closed or had skeleton lunchtime staff, however lunchtime came and went and there wasn't a rush of anyone anywhere. Never been in a bank so quiet.
If they did relocate from nearby town, would we be in a quandry down the line if no real life branch?
Finally, NIB rep said we would be tied in for lifetime of the mortgage if we do switch, (17yrs), and in the future if they hike up the interest we would be unable to get out of it.
Another point to note is that we would have to take up a new Life policy on the mortgage, as the one we have is with Irish Life, at what everyone tells me is a good premium. Even the NIB rep was surprised at what we were paying each month. We would have to get a new policy if we switched companies, and I am guessing that it would cost more than what we are paying now.
To switch or not to switch ..that is the question????
Thanks for reading.
All that hassle for €16 a month???

No thanks...
 

Butter

Frequent Poster
Messages
602
NIB refund the TRS into my bank account after the mortgage payment comes out but it means that they take the full amount out of the account first. Maybe not the best way of doing for you it if you need the money in your hand every month. I've let my TRS refunds build up in that a/c over the last two years which will take some of the sting out of the increase in payments when I come off the fixed rate next month. Fingers crossed that there won't be any more increases in rates.

NIB must have changed their policy on legal fee refunds. Still it might be worth considering using their solicitor for the transaction rather than paying out separately for your own and claiming the €600 from NIB.
As I said we don't use the NIB a/c as our main current a/c and there has never been an issue with that.

There was no tie-in period when I switched but make sure you read the small print on your offer to make sure that they haven't changed that. Having said that I have heard of up to 5-year tie-ins with some mortgage products but I have never heard of anyone tied in for the entire duration of a 20 or 25 year mortgage
 

ClubMan

Frequent Poster
Messages
43,866
I've let my TRS refunds build up in that a/c over the last two years which will take some of the sting out of the increase in payments when I come off the fixed rate next month.
Would you not be better off paying the TRS refunds off the capital immediately as part of an accelerated capital repayment strategy? If you do this then agree it with the lender first and don't just lodge additional amounts to the mortgage account unilaterally and without specifying that you want them paid off the capital.
There was no tie-in period when I switched but make sure you read the small print on your offer to make sure that they haven't changed that. Having said that I have heard of up to 5-year tie-ins with some mortgage products but I have never heard of anyone tied in for the entire duration of a 20 or 25 year mortgage
5 years is max that I've heard. Other than very long term fixed rates I've never heard of longer lock ins or penalties for moving before some period is up.
 

floydmuppet

Registered User
Messages
11
Hi Fauve,
I found myself in the same situation, in that I have been looking at switching my mortgage from ptsb to n.i.b and was interested in your experience .From a previous post on this site, I learned and done the following .Telephone your branch and ask to speak to someone in retentions.tell them your situation in that you are switching to N.I.B and can they match the rate as things are tight etc.I saved 130euro per month.They rang me back with an offer which I refused they rang back about two hours later with a lot better offer.So maybe you could try.I got 4.75%.Not to bad for one call.
 
I

irishpancake

Guest
All that hassle for €16 a month???

No thanks...
So what's wrong with you having €16 p/mth available to save for 17 years :)

At current regular saver rates, say 7.22% AER, with FA: €6449.94 :D

Even at ECB matching rate regular saver, say 4.3%: €4834.13

see here

Obviously these rates would vary over the years, but I certainly think it is worth the hassle.

Whatever the OP would hope to do with the savings achievable, it is better to have the choice and money in your hands than the Banks take it from you.

Imagine the effect this has when multiplied by the hundreds of thousands paying over the odds for their mortgages.

No wonder Irish Banks are laughing all the way to the Bank :p
 

Butter

Frequent Poster
Messages
602
Would you not be better off paying the TRS refunds off the capital immediately as part of an accelerated capital repayment strategy? If you do this then agree it with the lender first and don't just lodge additional amounts to the mortgage account unilaterally and without specifying that you want them paid off the capital.
In the longterm I know I would be better off just paying it off the capital. However we are on a fixed rate which doesn't allow us to pay off extra capital at the moment. That will end next month though and I'll have to have think about the best option.
My other consideration at the moment is that we are paying full-time childcare costs for two children which eats big-time into our income. I have left that money there to use to cover the increase in our payments next month when we come off the fixed rate so we don't feel the pain quite so much. Probably not the best use of €2500 I know - it should be earning a bit more interest than it is. I kinda like the comfort factor though.
 

Carmel

Frequent Poster
Messages
252
Hi
Coming to this thread a bit late, but switched to NIB last year, so here are my comments.

1. We used the NIB solicitors, so our only cost in switching was €130, the cost of the valuation. A bit slow, but it got done, took away hassle of dealing with another solicitor as far as I was concerned.

2. I too was told that I would have to get a new life policy. I went with LA brokers and they have an offer where you get a huge (forget the detail) discount on the first year of a policy. So while it involved a bit of admin., I saved money on that years payment.

3. We are on a tracker of ECB plus 0.5%. I don't know if they are still offering that? If so, they can't put up the rate unless the ECB changes.

4. I was offered ATM cards etc. with the NIB current account, but just told them clearly that if I didn't have to, I wouldn't be paying my salary into it etc. and would just use it or feeding the mortgage. They accepted that. So I have set up a standing order every month from my BOI current account into the NIB one. Like the other poster, I have been letting the monthly TRS refund build up in that current account. Haven't decided what to do with it yet.

5. I find the NIB on-line banking easy to use.

6. I think the NIB staff are obliged to also offer you house insurance and life insurance quotations when you are going through the mortgage application stuff. I was quite clear with the girl I dealt with that I would only be taking the mortgage and she accepted that. So you can listen to the sales pitch, but just say no thanks.

7. We have put extra lump sum payments into the mortgage, NIB staff facilitate with that, no problems there.

8. I asked the girl we dealt with if there was any clause regarding pay-back of the legal fees if we decided to switch again and she said no. She also told me that we weren't bound to stay with NIB for any length of time.

Overall, if you own bank won't match the NIB rate, I would switch.

C
 

Fauve

Frequent Poster
Messages
82
Hi everyone.

Thanks so much for further replies and experiences with this issue.
I think we are more or less decided to go for it, and I need to have a weekend (of kid free time) to go through it all again to make sure we have it all clear, not missing anything.

Bobbysands81, thanks for your thoughts, I suspect we live in different worlds.
As was mentioned, thank you irishpancake, it is money that I could put to work elsewhere, that we really need at the moment.

Marg and Carmel thanks for sharing your experiences, I like the idea of TRS building up, would be nice and handy alright.
Just had a reread of leaflets etc from NIB and they do state that salary does NOT have to be paid into ac, and it can just be used to feed mtg account, no problem. Also that the mtg is reviewed every three years, so no tie ins as such. I actually don't know where we got this from in the first place.

Floydmuppet, I did what you did to no avail, still stinging from the nonchalance at other end of the line with PTSB to be honest. Maybe I was non committal in saying we were switching at the time?

On the Mtg protection life ins, I am already getting good enough quotes for that, so all is in favour there.

Thanks again everyone for helpful advice on this, it has allowed me to totally rethink our situation.
Fauve
 

din0saur

Frequent Poster
Messages
11
On the Mtg protection life ins, I am already getting good enough quotes for that, so all is in favour there.
Why you need to change your insurance policy if you are not increasing the mortgage? If you are on a good deal then you should keep that policy in place and simply change the interested party on the policy...
 
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