Mortgage Approval at ECB+1.1% - bank wants to raise to ECB+1.35%

[AKA]

Mortgage offer signed and sent into to broker for bank (Haven) at 1.1 over ECB.
The bank has come back to the broker to raise the rate to 1.35.
If the mortgage offer is signed can the bank do this?

As this is an affordable house the lender cannot be changed so it's imperative to get it right at the start. Fixed rates have been offered but as the lender cannot be changed after the fixed term this is not a good option either.

 

[OneLife]

Re: Mortgage Approval at 1.1% - bank wants to raise to 1.35%

IIB, Bank of Ireland, EBS, First Active all do affordable housing as well.

BoI are expected to announce new rate changes later today.

 

[mf1]

Re: Mortgage Approval at 1.1% - bank wants to raise to 1.35%

"If the mortgage offer is signed can the bank do this?"

Yes. Its the rate applicable at draw down in most cases unless there is a specific clause confirming the rate on signature - which would be very unusual in todays uncertain climate.

mf

 

[AKA]

Re: Mortgage Approval at 1.1% - bank wants to raise to 1.35%

"If the mortgage offer is signed can the bank do this?"

Yes. Its the rate applicable at draw down in most cases unless there is a specific clause confirming the rate on signature - which would be very unusual in todays uncertain climate.

mf

I thought the ECB rate could change on a tracker prior to draw down but not the percentage rate over the ECB rate.

 

[Sunny]

Re: Mortgage Approval at 1.1% - bank wants to raise to 1.35%

I thought the ECB rate could change on a tracker prior to draw down but not the percentage rate over the ECB rate.

The bank can change any terms of its offer up to drawdown. It will all be included in the terms and conditions of your loan offer. Have you read them? What do they say?

 

[AKA]

Re: Mortgage Approval at 1.1% - bank wants to raise to 1.35%

It's a friend's mortgage so haven't checked documentation.

Financial Regulator confirms this also.

Turns out there's legislation coming on stream for affordable housing to enable the owner to switch lender so this takes some of the sting off.


So options are:

• 2,3,5 yr fixed - rates TBC
  • Pro

Can fixed rates be renegotiated prior to drawdown? Response from Financial Regulator seems to suggest they can't be.
​

• • Con

I fee ECB rates will go down
Legislation for switching lender under Affordable Housing currently not in place - after 3 yrs fixed the rate could spiral with no ability to change lender.
​

• tracker at ECB + 1.35 Pro - can take advantage of possible ECB rates

Con - rate may be negotiated prior to drawn down in July or later this summer
​

But since going with REA there's a clawback on the solicitor fee reduction if you switch lender before 3 years. This wasn't an issue until now as 1.1 over ECB is good.
​

Any thoughts?

 

[ClubMan]

Re: Mortgage Approval at 1.1% - bank wants to raise to 1.35%

Can fixed rates be renegotiated prior to drawdown? Response from Financial Regulator seems to suggest they can't be.

I'm pretty sure that they can. As mentioned above the detailed terms & conditions will often (normally?) allow the lender to reserve the right to review the rate prior to draw-down.

I fee ECB rates will go down

Timing the market is a mug's game. Only fix if necessary due to cashflow concerns and not in an attempt to save money over an alternative competitive tracker/variable rate.

 

[AKA]

Re: Mortgage Approval at 1.1% - bank wants to raise to 1.35%

Thanks Clubman -

Yes I'd agree with not fixing. Having a closer look at the rates I saw an error and the rate is now ECB +1.6% for <250K mortgage and not 1.35 as quoted earlier. The latter applies for >250K.

'Tracker Variable for mortgages over €250,000 rate moves to 5.35% (1.35% above ECB)
Tracker Variable for mortgages under €250,000 rate moves to 5.60% (1.60% above ECB) '


1.6% + ECB is very high - I'm thinking of my own rate at ECB + .75%. Waiting for confirmation on fixed rates - they seem competitive.

So, if this happens mid way through purchase do people re-evaluate their lender - we did all the research to make sure we were picking right lender already and it's painful to see that it's all changing. Or are you too far down the road to change lender after signing mortgage approval?

Probably in the T&Cs but I don't have them to hand.

Changing times...

 

[lisa_eire]

Re: Mortgage Approval at 1.1% - bank wants to raise to 1.35%

well i'm in the same position. i am buying an affordable house as well. i had signed the mortgage contract. it was at 1.1% above the ecb. Now it has changed to 1.5% above the ecb. Thats with iib. i checked the t&c and it does state that rates can be changed before drawdown.
bank of ireland are currently offering 1.4% above the ecb and first active are the same though they will change to 1.2% above the ecb once your LTV goes down to 80% for boi or below 90% for first active.
don't know if changing is worth the hassle of going through the mortgage process again!!