Niall-1980
Registered User
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I hear ya thanks Paul
I hear ya thanks PaulThe thing is, Bank of Ireland's rate is 2.9% at the moment. Who knows what it will be in two years' time.
And 2.9% is BOI's two-year fixed rate – their ten-year fixed rate is currently 3.3! And who knows what that will be in two years' time.
@BusyAtMaths In reply to this post and your other thread:
- Current lender BOI
- Outstanding mortgage balance (how much you still owe) 306,347
- Approximate current value of your property €530,000
- The date you started your fixed-rate mortgage (month and year) October 2020 (following a 3 year BOI fixed term 3%)
- How many years you fixed for 2
- Your current mortgage interest rate 2.9%
- Your current monthly repayment (excluding any overpayments) €1425
- Your property's BER (Building Energy Rating) – check it here or estimate it if necessary A3
- Are you due to get extra cashback from your current lender in the future, e.g., "1% after 5 years", or "2% cashback monthly"? If so, how much (monetary amount) and when? Yes, 1% (€3,370) after 5 years (due 45 days after 5 year ends on 12 October 2022). No break fee currently. ( I would not break)
@faketalesI checked with KBC and my current break rate is €0.
- Current lender KBC
- Outstanding mortgage balance (how much you still owe) €258,486.31
- Approximate current value of your property €445,000
- The date you started your fixed-rate mortgage (month and year) October 2021
- How many years you fixed for 5 year
- Your current mortgage interest rate 2.4%
- Your current monthly repayment (excluding any overpayments) €1,175.53
- Your property's BER (Building Energy Rating) – check it here or estimate it if necessary A3
- Are you due to get extra cashback from your current lender in the future, e.g., "1% after 5 years", or "2% cashback monthly"? If so, how much (monetary amount) and when? No
It would be about €632 – see this calculator.Current lender: AIB Green Rate
Outstanding mortgage balance (how much you still owe) €162,000.
Approximate current value of your property €265,000.
The date you started your fixed-rate mortgage (month and year): April 2022
How many years you fixed for: 5 year
Your current mortgage interest rate 2.15%
Your current monthly repayment (excluding any overpayments) €840.
Your property's BER (Building Energy Rating) – A3
Are you due to get extra cashback from your current lender in the future, e.g., "1% after 5 years", or "2% cashback monthly"? If so, how much (monetary amount) and when? No.
Mortgage fixed for: 20 years
If I pay a lumpsump of €40,000. How much would be my monthly mortgage?
Thank you once again.It would be about €632 – see this calculator.
And you would be eligible to refix on AIB's 2.1% green rate, since your loan-to-value (LTV) ratio would be under 50%.
Bear in mind that reducing your balance may not be the best use of your money. Your priorities should usually be:
in approximately that order. Consider posting a thread about your situation in the Money Makeover forum.
- Paying off expensive debt (credit cards, personal loans, car loans, etc.)
- Building up an emergency fund in a savings/current account (3 to 6 months' living expenses)
- Saving money for any expenses you will have over the next few years (kids; childcare; adult children going to college, etc.)
- Maxing out your pension contributions (very large tax relief is given)
- Overpaying your mortgage
No.You mentioned "refix". Does it mean I have start all over again and involve solicitor, arrange documents, etc?
Once you get the break fee quote, transfer the money – if you think that is the best use of your €40k (you may be better by putting it into your pension if you haven't maxed out your tax relief, for example).I was hoping once the break fee is zero, I would transfer the money using the AIB mobile app and the current 5 year fixed mortgage will continue without the need for going through the documents again.
I have explored other options to utilise the lump sump cash. It appears pension and mortgage are the best options for me. However, I am not keen for the pension option (personal choice).No.
Once you get the break fee quote, transfer the money – if you think that is the best use of your €40k (you may be better by putting it into your pension if you haven't maxed out your tax relief, for example).
When that has gone through and you get a confirmation letter, you could consider switching to the 2.1% green rate using the mortgage amendment form.
Make sure you understand the very generous tax break you get by contributing to a pension.I have explored other options to utilise the lump sump cash. It appears pension and mortgage are the best options for me. However, I am not keen for the pension option (personal choice).
Correct.Could I please clarify the steps of refixing my AIB mortgage?
1. Get a break fee quote (hopefully zero).
2. Transfer €40,000 using the AIB bank app. (maybe it has to be done over 4 days, if max limit is €10,000 per day).
You will receive a confirmation letter but you will not be put on the variable rate – you will remain on the 2.15% fixed rate.3. I will receive a confirmation stating the deposit of €40k and that I am on variable rate now.
Correct. There is a slight risk that AIB could put up their rates between the time you send the form and the time they process it. If that worries you, don't send the amendment form.4. I want to stay on AIB's 2.1 fixed rate. So I will complete the mortgage amendment form (option 2: Amend loan rate).
Not sure.And what's the average time frame after depositing and refixing mortgage?
Thanks Paul@faketales
- Switching immediately to Haven's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €4,480 over the next 4 years
- Switching immediately to AIB's 5-year green fixed rate (2.15% with €2,000 cashback) will save you about €3,000 over the next 4 years
- And it is quite likely that you will be able to make unlimited overpayments without penalty for the foreseeable future (see this thread)
- Switching immediately to Avant Money's 4-year fixed rate (1.95% with no cashback) will save you about €2,940 over the next 4 years
- Switching immediately to Avant Money's 7-year fixed rate (2.25% with no cashback) will leave you worse off by about €20 over the next 4 years – but with the longer security of 7 years on a fixed rate
- If Avant won't let you switch to them and you really want to fix for 7 years for some reason, you could consider Bank of Ireland's 7-year green fixed rate (2.25% with no cashback)
- Re-fixing immediately on KBC's 5-year fixed rate (2.4% with no cashback) will leave you worse off by about €150 over the next 4 years, but it will "reset the clock" on the fixed-rate period. And it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).
- Or you could switch to KBC's 3-year fixed rate (2.25% with no cashback)
- Note that if you decide to do stay with KBC, your mortgage will soon move onto Bank of Ireland's books, and they discriminate between new and existing customers, i.e., their best rates are not available to existing customers
- For example, if you were an existing Bank of Ireland customer, the best rate you would be able to switch to today is 3.0%
- So if you switch to this KBC offer now, you will probably not be eligible to switch to one of Bank of Ireland's low rates in the future and you will end up on a higher interest rate. When that happens, you may want to switch again to another lender, which will incur costs (and it might be impossible to switch if your financial situation has deteriorated).
- Switching immediately to Avant Money's 10-year fixed rate (2.4% with no cashback) will leave you worse off by about €1,500 over the next 4 years – but with the longer security of 10 years on a fixed rate
- If Avant won't let you switch to them and you really want to fix for 10 years for some reason, you could consider Haven's 10-year fixed rate (2.85% with €5,000 cashback)
- Switching immediately to Avant Money's "One Mortgage" (a 2.5% fixed rate with no cashback) will leave you worse off by about €2,480 over the next 4 years – and the interest rate will remain fixed for the remainder of your mortgage term (approximately 24 years)
- Switching immediately to KBC's 10-year fixed rate (2.85% with no cashback) will leave you worse off by about €4,620 over the next 4 years – but with the longer security of 10 years on a fixed rate. And it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).
- The same warnings as above regarding higher Bank of Ireland rates in the future apply
- Switching immediately to Finance Ireland's 10- or 15-year fixed rate (2.9% with no cashback) will leave you worse off by about €6,440 over the next 4 years – but with the longer security of 10 or 15 years on a fixed rate
- This product has a benefit in relation to moving home in the future that is explained below
- Switching immediately to Finance Ireland's 20-year fixed rate (3.0% with no cashback) will leave you worse off by about €7,440 over the next 4 years – but with the longer security of 20 years on a fixed rate
- This product has a benefit in relation to moving home in the future that is explained below
These savings estimates use for comparison the scenario of switching to the 2.9% rate with Bank of Ireland (who will probably own your mortgage) when the current fixed rate ends. And that's assuming that Bank of Ireland are even offering a 2.9% rate in October 2026 – it could be higher (or lower). The estimates also account for any fees (solicitors' fees, valuation fee) that you have to pay and any cashback offered by the above lenders.
All of Avant's rates, and Finance Ireland's 10-year and longer fixed rates, allow you to avoid any potential break fee if you move home in the future (as long as you take out a new mortgage with them, and subject to certain conditions). And in the case of Finance Ireland you can "take your mortgage with you" – meaning that you get to keep the same interest rate when you move (provided that at least 3 years have passed since you started the Finance Ireland fixed rate and subject to certain other conditions).
The estimates also assume that your loan-to-value ratio (LTV) really is below 60% in order to be eligible for some of the listed rates. Your LTV estimate is 258.5k/445.0k = 58.1%. If you get a valuation of less than €431k, you will need to make a few more monthly mortgage payments and/or a lump sum overpayment to get the LTV below 60%. But that is not a reason to delay the switch – i.e., you can start the switch immediately.
If you're feeling brave, you could consider the strategy outlined in this thread: switch to Haven's 2.35% 3-year fixed rate and get the €5k cashback. Then quickly switch to Haven's 2.0% green rate. If it works, you will be better off by about €7,480 in four years' time. Nobody knows for sure if Haven will allow you to do this, so you might be stuck on the 2.35% rate, but at least you'd have got the €5k cashback.
Some of the above lenders will only let you switch to them if you have had a mortgage with your current lender for at least 12 months. See this thread for more details.
Bear in mind that interest rates could rise between now and the time that you complete any switch, so if you are thinking of switching you should apply simultaneously to two or more lenders for approval in principle (AIP).
APRC is pretty much irrelevant when it comes to mortgages – your main concern is the interest rate and whether or not the lender discriminates between new and existing customers (and to a lesser extent the cashback).Could you please explain the dramatically different APRC rates listed by the lenders? Are APRC rates the most important to pay attention to when Comparing?
Also, some bankd mention that APRC rates include setup charges e.g. Valuation fee, - I had thought that I pay the Valuation fee etc myself separately ?
Thanks Paul. I'm confused.@BusyAtMaths In reply to this post and your other thread:
- Switching immediately to Permanent TSB's 5-year green fixed rate (2.35% with €6,127 initial cashback and 2% monthly cashback) will save you about €9,900 over the next 4 years
- Note that Permanent TSB discriminate between new and existing customers, i.e., their best rates are not available to existing customers
- For example, if you were an existing Permanent TSB customer, the best rate you would be able to switch to today is 2.8%
- So if you switch to them now, you will not be eligible to switch to one of their low rates in the future and you will end up on a higher interest rate. When that happens, you may want to switch again to another lender, which will incur costs (and it might be impossible to switch if your financial situation has deteriorated).
- Switching immediately to Haven's 4-year green fixed rate (2.0% with €2,000 cashback) will save you about €8,860 over the next 4 years
- Switching immediately to Avant Money's 4-year fixed rate (1.95% with no cashback) will save you about €7,420 over the next 4 years
- Switching immediately to AIB's 5-year green fixed rate (2.15% with €2,000 cashback) will save you about €7,120 over the next 4 years
- And it is quite likely that you will be able to make unlimited overpayments without penalty for the foreseeable future (see this thread)
- Switching immediately to Avant Money's 7-year fixed rate (2.25% with no cashback) will save you about €3,900 over the next 4 years – but with the longer security of 7 years on a fixed rate
- If Avant won't let you switch to them and you really want to fix for 7 years for some reason, you could consider Haven's 7-year fixed rate (2.65% with €5,000 cashback)
- Switching immediately to Avant Money's 10-year fixed rate (2.4% with no cashback) will save you about €2,140 over the next 4 years – but with the longer security of 10 years on a fixed rate
- If Avant won't let you switch to them and you really want to fix for 10 years for some reason, you could consider Haven's 10-year fixed rate (2.85% with €5,000 cashback)
- Switching immediately to Avant Money's "One Mortgage" (a 2.5% fixed rate with no cashback) will save you about €980 over the next 4 years – and the interest rate will remain fixed for the remainder of your mortgage term (approximately 25 years)
- Switching immediately to Bank of Ireland's 5-year fixed rate (3.0% and you would get the 1% (€3,370) cashback) will leave you worse off by about €80 over the next 4 years. But it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).
- Switching immediately to Finance Ireland's 10- or 15-year fixed rate (2.9% with no cashback) will leave you worse off by about €3,740 over the next 4 years – but with the longer security of 10 or 15 years on a fixed rate
- This product has a benefit in relation to moving home in the future that is explained below
- Switching immediately to Bank of Ireland's 10-year fixed rate (3.3% and you would get the 1% (€3,370) cashback) will leave you worse off by about €3,780 over the next 4 years – but with the longer security of 10 years on a fixed rate. And it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).
- Switching immediately to Finance Ireland's 20-year fixed rate (3.0% with no cashback) will leave you worse off by about €4,920 over the next 4 years – but with the longer security of 20 years on a fixed rate
- This product has a benefit in relation to moving home in the future that is explained below
- Switching immediately to Finance Ireland's 25-year fixed rate (3.15% with no cashback) will leave you worse off by about €6,700 over the next 4 years – but with the longer security of 25 years on a fixed rate
- This product has a benefit in relation to moving home in the future that is explained below
These savings estimates use for comparison the scenario of switching to the 3% rate with Bank of Ireland when the current fixed rate ends. And that's assuming that Bank of Ireland are even offering a 3% rate in October 2022 – it could be higher (or lower). You would get the Bank of Ireland €3,370 future cashback in such a scenario, and the savings estimates account for this. The estimates also account for any fees (solicitors' fees, valuation fee) that you have to pay and any cashback offered by the above lenders.
All of Avant's rates, and Finance Ireland's 10-year and longer fixed rates, allow you to avoid any potential break fee if you move home in the future (as long as you take out a new mortgage with them, and subject to certain conditions). And in the case of Finance Ireland you can "take your mortgage with you" – meaning that you get to keep the same interest rate when you move (provided that at least 3 years have passed since you started the Finance Ireland fixed rate and subject to certain other conditions).
The estimates also assume that your loan-to-value ratio (LTV) really is below 60% in order to be eligible for some of the listed rates. Your LTV estimate is 306.4k/530.0k = 57.8%. If you get a valuation of less than €511k, you will need to make a few more monthly mortgage payments and/or a lump sum overpayment to get the LTV below 60%. But that is not a reason to delay the switch – i.e., you can start the switch immediately.
If you're feeling brave, you could consider the strategy outlined in this thread: switch to Haven's 2.35% 3-year fixed rate and get the €5k cashback. Then quickly switch to Haven's 2.0% green rate. If it works, you will be better off by about €11,860 in four years' time. Nobody knows for sure if Haven will allow you to do this, so you might be stuck on the 2.35% rate, but at least you'd have got the €5k cashback.
Bear in mind that interest rates could rise between now and the time that you complete any switch, so if you are thinking of switching you should apply simultaneously to two or more lenders for approval in principle (AIP).
In reality it will be October or later before you complete any switch, so will get the 1% cashback from BOI and the savings will be €3,370 higher than the estimates given above.
By looking at the amount of interest you would have to pay on each rate and factoring in the fees and any cashback.Thanks Paul. I'm confused.
On the other thread, you said "You cannot make accurate estimates of the savings by looking at the monthly repayments."
How did you calculate the savings above?
@Craig_David Please post your mortgage details in the format shown in the first post.I'm currently looking to switch from KBC to BOI.
By looking at the amount of interest you would have to pay on each rate and factoring the fees and any cashback.
Have a look at this thread:
Key Post - How to evaluate if it's worth fixing, switching or breaking out of a fixed rate
Almost every post on this topic is wrong. No matter how often it is pointed out, people look at the wrong figures. They use mortgage calculators when they don't need them. Most of the time, you can do the figures in your head. Do not look at the monthly repayments – they are misleading. Do not...www.askaboutmoney.com
By looking at the amount of interest you would have to pay on each rate and factoring the fees and any cashback.
Have a look at this thread:
Key Post - How to evaluate if it's worth fixing, switching or breaking out of a fixed rate
Almost every post on this topic is wrong. No matter how often it is pointed out, people look at the wrong figures. They use mortgage calculators when they don't need them. Most of the time, you can do the figures in your head. Do not look at the monthly repayments – they are misleading. Do not...www.askaboutmoney.com
Money is money, whether it is money you save from having a lower interest rate or money you get as cashback."Switching immediately to Permanent TSB's 5-year green fixed rate (2.35% with €6,127 initial cashback and 2% monthly cashback) will save you about €9,900 over the next 4 years"
So PTSB might save me €9,900 (compared to continuing my current/BOI path), but ultimately Avant 1.95% would be the best option since IT would result in the least interest being paid over the four years, and thus more capital paid, correct?
That's too simplistic. You seem to be overlooking Haven's 4-year green fixed rate (2.0% with €2,000 cashback) – it will save you about €8,860 over the next 4 years (which is more than Avant would save you).So ob, the only clear winner is Avant 1.95% since its the lowest interest rate.