HiHi all,
We are almost 5 years into a 35 year mortgage and are with KBC. We were on a 3 year fixed but are now automatically onto their standard variable rate and currently our rate is 4.05%. It decreased from 4.5% only a few months ago as all of our other bank accounts are with KBC etc. The remaining amount on the mortgage is approx. €354,000 and monthly repayments on the 4.05% rate is €1,690 per month which does not include any of the TRS mortgage interest relief. We bought the house 5 years ago for €425,000 and it is currently valued at approx €660,000.
Can anyone please lend advise if it is worthwhile pursuing a cheaper mortgage rate with another provider and if it would be worthwhile when you take into account switching fees, legal fees etc.
Any advice would be welcome as we are not experts at all in this area.
Thank you,
D
From reports in today's paper it looks as if there will be a new provider shortly offering rates below 3%. So you would save 1% a year on €354k or €3,500 a year. The most it should cost you to switch is €1,500 so, you will have recovered the costs in less than 6 months.
I am not sure about the TRS which you may loose but I believe it due to end at the end of this year anyway.
Aidan
In view of the above it might be best for those people who have a good mortgage paying capacity/a good payment record and a good LTV to hold off and see what the new entrant/s have to offer later in the year.
This is a model for a switcher. Switching costs are around €1,000, but many banks will cover more than that amount with cash incentives. Much more importantly, you could get a much lower interest rate, and save a fortune over the long-term. For example, you could get a rate of 3.35%, which would cost you around €1,561 per month over 30 years. That's €1,548 per year in savings (net of income tax, don't forget), or €46,440 over the remaining term. Better still, you could reduce the term and your monthly repayments. You could take 3 years off your mortgage and still only be paying around €1,662 per month. Doing that would save you an additional €23,282 in interest payments.Hi all,
We are almost 5 years into a 35 year mortgage and are with KBC. We were on a 3 year fixed but are now automatically onto their standard variable rate and currently our rate is 4.05%. It decreased from 4.5% only a few months ago as all of our other bank accounts are with KBC etc. The remaining amount on the mortgage is approx. €354,000 and monthly repayments on the 4.05% rate is €1,690 per month which does not include any of the TRS mortgage interest relief. We bought the house 5 years ago for €425,000 and it is currently valued at approx €660,000.
Can anyone please lend advise if it is worthwhile pursuing a cheaper mortgage rate with another provider and if it would be worthwhile when you take into account switching fees, legal fees etc.
Any advice would be welcome as we are not experts at all in this area.
Thank you,
D
There is a bit of a problem with this. If everyone does this and waits to see what will happen, then nothing will happen.
If everyone who can switch, actually switches,the banks will respond.
I would agree but that will not happen (absolute inertia). Some time ago you put a lot of work into promoting a meeting about mortgage rates etc and it was very poorly attended. (Not your fault). I cannot understand why mortgage holders will not take matters into their own hands.
For Donnie, the original poster, the gap is so big that he should switch as soon as possible.
I understand but I just would not like to see Donnie being locked into something for say 5 years at say 3.35% only in 6 months time to see that he might get a rate of 2.9%. A bit of dammed if you do and dammed if you don't.
In any event, it takes around 3 months to get the paperwork and legal stuff together. Everyone should start now. Let's say that Donnie decides to switch to AIB. If the new lender, Frank, as reported in today's paper, gets off the ground with a <3% mortgage rate before AIB signs the paperwork, then he can switch to Frank instead.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?