I'm looking at options for switching mortgage from Ulster Bank.
Mortgage Balance: €262K
Home Value: €373K
LTV: 70%
Current rate: 2.6% (fixed, ~1 year remaining, haven't inquired about a break fee yet)
We can overpay a couple of grand to get into the <70% LTV bracket, so let's assume a balance of €260K
Options are:
Avant - 2.1% for 3/4/5/7 years
KBS - 2.3% for 2/3 years with €3000 cashback
I can see a tendency here to fix with Avant for as long as possible to avoid rate hikes when UB and KBC leave Ireland. However, KBC's offer seems tempting in the short term.
In year 1, we'd lose a bit of money on fees if we went with Avant, but we'd save money from year 2. We'd save money from the start if we went to KBC.
The risk, of course, is that Avant might hike their rates over the next 2 years. But I'm wondering whether any hike would be significant enough to cancel out the immediate gain of going to KBC first, then to Avant (or whoever's most competitive) at the end of the 2 years.
Since no one can answer that question -- am I missing any other factors that might change the calculation?
Mortgage Balance: €262K
Home Value: €373K
LTV: 70%
Current rate: 2.6% (fixed, ~1 year remaining, haven't inquired about a break fee yet)
We can overpay a couple of grand to get into the <70% LTV bracket, so let's assume a balance of €260K
Options are:
Avant - 2.1% for 3/4/5/7 years
KBS - 2.3% for 2/3 years with €3000 cashback
I can see a tendency here to fix with Avant for as long as possible to avoid rate hikes when UB and KBC leave Ireland. However, KBC's offer seems tempting in the short term.
Bank | Principal | Interest Rate Saving | Cashback | 1st Year Savings (before break fee and legal fees) |
Avant | 260,000 | 2.6-2.1 = 0.5 | 1300 | |
KBC | 260,000 | 2.6-2.3 = 0.3 | 3000 | 3780 |
In year 1, we'd lose a bit of money on fees if we went with Avant, but we'd save money from year 2. We'd save money from the start if we went to KBC.
The risk, of course, is that Avant might hike their rates over the next 2 years. But I'm wondering whether any hike would be significant enough to cancel out the immediate gain of going to KBC first, then to Avant (or whoever's most competitive) at the end of the 2 years.
Since no one can answer that question -- am I missing any other factors that might change the calculation?