Just about to fix on split PTSB mortgage sold to Glenbeigh

Discussion in 'Mortgage arrears & negative equity case studies' started by Confused83, 7 Dec 2018.

  1. Confused83

    Confused83 Registered User

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    7
    Hi we just completed our first review of our split so it's in place approx 3.5 years.

    There is two mortgages
    Main balance was
    Main 114,660 Warehouse 118,287
    New offer
    Main 123,857 Warehouse 109,090

    Top up
    Balance was
    Main 20,173 Warehouse 21,399
    New offer
    22,103 Warehouse 19,470

    Interest Rate 4.5 variable and term 307 mths

    We enquired about fixed rates and were offered two weeks ago 5 year fixed 3.7. We asked if we fixed could we keep the payments the same and recalculate the ware house to bring more in. Was told yes signed and sent of papers.

    In meantime got the letter that mortgage has sold. The website seems to indicate until transfer we are entitled to available of all Ptsb rates.

    What confused us was the advisor told us we could over pay on the main account by fixing and keeping payments the same as the new agreed split and to let them know what we wanted to do.

    I can't figure out what the best option to ask for is. Over pay on the main accounts until next review or ask for recalculate of warehouse before we move over.

    What are people's thoughts

    Thanks
     
  2. Brendan Burgess

    Brendan Burgess Founder

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    36,349
    It's a bit odd that they have given you such a generous split mortgage when you admit to being able to overpay the main mortgage.

    Anyway, you do not want a recalculation of the warehouse. The more there, the better for you as it's all interest free.

    Don't reopen this review. It could take over 6 months and Pepper might not be as generous.
     
  3. Brendan Burgess

    Brendan Burgess Founder

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    36,349
    From the sounds of things, you have just fixed at 3.7%.

    The repayments will reduce as a result of this.

    If you overpay your mortgage on a split, I would have thought that they would take the money from the warehouse first.

    Brendan
     
  4. Confused83

    Confused83 Registered User

    Posts:
    7
    To clarify we would only be able to over pay as the monthly payment will drop by moving from 4.5% to 3.7%. The calculated repayment affordability is the same. The new payment will be lower due to rate change. Maybe I wasn't clear in my post.

    We went to the bank provided all our detail change in circumstances and made the offer of increased payment they assessed it and agreed to our "generous split". So obviously this is the amount we want to pay and not reduce the monthly payment inline with rate decrease.

    Considering the amount on warehouse the absolute collapse in our equity which due to other circumstances is unlikely to significantly reverse we want to try to reduce the mortgage as much as we can as we could be left with nothing at the end of term with the amount that will be left.

    Hence my question as to which would be best overpay on the main and reduce it slightly more than it would on 4.5 or take more capital onto the main.

    Thanks glad to hear my complete fear and worries about dealing with Pepper aren't unfounded then.

    I don't expect them to be "generous" by the way. It's our home we have fought tooth and nail to keep it and that's the plan we are working towards and have been for the last 7 years.

    Thank you for the advise. We 'll wait and see what the paper work comes back from the bank and go from there.
     
    RETIRED2017 likes this.
  5. Brendan Burgess

    Brendan Burgess Founder

    Posts:
    36,349
    Hi Confused

    You have in a sense two mortgages.
    Main 145k
    Warehouse 138k

    You are being charged interest on the 145k and the warehouse is an interest and repayment free loan.

    If you move, say €30k from the warehouse to the main, you will be paying an additional €1,100 a year in interest.

    So you want to minimise the main and maximise the warehouse.

    So if you are allowed to do so, pay off the main first.

    After a few years, this strategy may change...

    After a few years, if you are in a position to make full repayments on the whole €283k mortgage, then you should consider doing so.
    Having a split mortgage means that you will never be able to trade up or borrow money elsewhere. So if you can get rid of the split mortgage, then you should do so and your credit record will start improving.

    But there is no advantage to reducing the warehouse unless you can clear it in full.

    Brendan
     
  6. Confused83

    Confused83 Registered User

    Posts:
    7
    Thank you for the reply.

    That makes sense and will be the approach we will try to take if possible.