Mortgage offer post PIA

Hi all,
My wife and I have made some questionable financial decisions in the past and are committed to changing going forward.
Long story short during the financial crisis in 2010 we fell behind on our mortgage with PTSB, engaged at all times paid interest but obv arrears accrued. Fast forward to when we are both working- the payments & arrears were unmanageable and we entered a PIA. In this time we were sold to Start mortgages.PIA successful, didnt have a write down but mortgage term extended and at 3% variable. All manageable until interest rates starting going up. Currently at 5.69%. Start will not fix the rate.

For the past few months we have tried desperately to get away from Start. My wife has secured a promotion and this has led to approval for a mortgage from BOI. So so grateful.
My query is this, they want to consolidate a credit union loan into the mortgage and my head tells me it doesnt make sense to pay a loan that is finished in 8 years over 25 years..? Should we agree to get away from Start and fix our rate ?Would be greatful for any advice thanks

Is it BOI that want you to consolidate the credit union loan into the mortgage?
I assume that BOI's interest rate is much better than Start's rate? And probably much better than the Credit union's rate too.
My head is telling me that you should grab the BOI offer in case they change their mind.
If you have a mind to, you can then overpay your mortgage so as to still clear the credit union portion in the 8 years.

Thanks for the reply. Yes I thought the same, this really is a lifeline from BOI and we really are so very grateful.
The CU loan is manageable, approx €300 per month and cleared in 8 years.
Our current mortgage with Start is approx €1800 per month. Total exp €2100 which with 3 children is a struggle.
BOI offer is roughly €1800 per month at 4.25% with the CU loan included.
I'm not sure we could afford to overpay by much...
Is it worth our while checking out other lenders to seek a better fixed rate ?

Definitely check other lenders, especially Avant. Did you try to get Start to do anything on the rate? They have offered me a 3% fixed rate for 2 years and I have a complaint with the FSPO to try and get this extended. I have no arrears etc either. But if nothing better I would probably move to BOI, nothing to stop you switching again in a few years as your LTV moves up

Thanks for the reply. I phoned Start very early last year in anticipation of any interest rate rises, their response-we dont offer new lending and fixed rates.
Its raised steadily since then.

Do you think other lenders would even look at us considering our history with PIA?, i got the impression from the broker BOI were really bending over backwards for us..

Tomandgerry said:

Definitely check other lenders, especially Avant

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Do you have any evidence of Avant looking at cases post PIA?

You need to lost

Movingforward said:

The CU loan is manageable, approx €300 per month and cleared in 8 years.

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What is the remaining balance and interest rate on the CU loan and how much (if anything) is in shares/on deposit with them while the loan is outstanding?

These details are key to figuring out if it's worthwhile consolidating the CU loan onto the new BOI mortgage.

Movingforward said:

Thanks for the reply. I phoned Start very early last year in anticipation of any interest rate rises, their response-we dont offer new lending and fixed rates.
Its raised steadily since then.

Do you think other lenders would even look at us considering our history with PIA?, i got the impression from the broker BOI were really bending over backwards for us..

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I am a PIP Im only hearing of BOI really taking on remortgages within about 4 years of a completed arrangement. Your options are quite limited due to lack of competition but if they are consolidating the CU loan it sounds favorable as teh fixed rate will surely be less than rate on CU lending even backed up by shares

ClubMan said:

You need to lost

What is the remaining balance and interest rate on the CU loan and how much (if anything) is in shares/on deposit with them while the loan is outstanding?

These details are key to figuring out if it's worthwhile consolidating the CU loan onto the new BOI mortgage.

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Thanks .Its a home improvement loan at a lower rate, its 5.1% 29k outstanding.
I pay €350 approx per month and its cleared in 8 years.
Consolidating it into new mortgage I would need to pump that €350 into the BOI repayment to bring our payment manageable and then the term would increase to 25 years.

I would be interested in trying to over pay and get the CU loan portion of the new mortgage paid quicker, not sure how I would calculate that to see if its achievable.

Movingforward said:

Thanks .Its a home improvement loan at a lower rate, its 5.1% 29k outstanding.

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You don't clarify if you have to keep money in shares/on deposit with the CU while the loan is outstanding? Normally they insist on this and it increases the effective cost of the loan.

Movingforward said:

Thanks .Its a home improvement loan at a lower rate, its 5.1% 29k outstanding.
I pay €350 approx per month and its cleared in 8 years.
Consolidating it into new mortgage I would need to pump that €350 into the BOI repayment to bring our payment manageable and then the term would increase to 25 years

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This is incorrect.
€29k at 4.25% over 25 years is about €157 p.m.
If you pay €350 then you'll clear it in about 8 years, same as the current CU loan but at a lower cost.

ClubMan said:

This is incorrect.
€29k at 4.25% over 25 years is about €157 p.m.
If you pay €350 then you'll clear it in about 8 years, same as the current CU loan but at a lower cost.

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Thanks Clubman.. I wasnt sure how to do that calculation. That would sit better with me alright.
Would there be a calculator I could use to do these calculations?, sorry clearly a novice here.

Movingforward said:

Thanks Clubman.. I wasnt sure how to do that calculation. That would sit better with me alright.
Would there be a calculator I could use to do these calculations?, sorry clearly a novice here.

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I just googled for a loan calculator.
Any such calculator will do.
I used this one (doesn't matter that it's in sterling) because it was high in the search results and simpler than a lot of others.

Can you clarify the details of your loans...

Mortgage with Start
Remaining term: ?
Remaining balance: ?
Interest rate: 5.69%

CU loan
Remaining term: 8 years
Remaining balance: €29k
Interest ratev 5.1%
Amount in shares/on deposit: ?

Other loans?

On a wider point, given that you're post PIA the priority may well be to stabilise your finances - and consolidating the two (?) loans into a sustainable repayment while ensuring that you don't rack up further debt could be key to that. Even at the longer term expense of (perhaps slightly?) higher total interest costs on the erstwhile CU loan. Which could be reduced by accelerating repayment of the consolidated loan when possible. To be honest, this thread probably really needs a Money Makeover post - e.g. to ensure efficient organisation of your debts, incomings and outgoings.

Hi Movingforward, from the figures you provided.
In the current scenario with Start and the credit union it looks like you will repay €639,200 over 28.25 years. Whereas with the consolidation you will repay €540,000 over 25 years. Without any overpayment.