Switching lenders is there a fixed period I have to commit to?

M

Mumof4

Registered User
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Hi all,

I am about to go to offer with PTSB but I have a question that the broker can’t answer.

We are taking a variable rate option as we are possibly looking to move house next year, our rate with PTSB will be 3.7%(LTV variable) which is the same as my current lender however currently I am with Mars Capital (mortgage is sold) which is why I am looking to move.

If I do chose to move house next year can I move lenders again does anyone know? My broker isn’t sure but thinks on a variable rate mortgage we have to committ to a year at minimum. It’s also important as even if we don’t move house, we likely look to switch lenders.

As I am only 14 months out of a restructured arrangement, I only had the option of applying to two lenders at this time, Haven and PTSB, neither of which have favourable rates. (This seems completely insane given I kept to the 7 year agreement, repaid all arrars etc yet am still penalised)
I am told once you are 24 months clear of your restructured agreement finishing, you can apply to all lenders.

All advice appreciated,
Thanks
 
No, there is no minimum period you have to commit to on any mortgage.

If you have a variable rate mortgage, you can repay it in part or in full any time without a penalty.

Don't tell ptsb that you intend borrowing only for one year. they might refuse you.

So take out an ordinary 20 or 25 year mortgage.

Brendan
 
Mumof4 said:
our rate with PTSB will be 3.7%(LTV variable) which is the same as my current lender however currently I am with Mars Capital (mortgage is sold) which is why I am looking to move.
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I don't understand this. Are you saying that Mars is charging you only 3.7%?

If so, you should stay with them for the time being at least.

Brendan
 
I want to move from Mars for other reasons. I agree we are switching to the same rate but Mars are applying EBS variable rate so this could increase as likely as PTSBs rate. We will also get 2% cash back for moving to PTSB and like their over payment option. It just worries me that our broker thinks we can’t switch until one year into the mortgage, I assumed the same as your response that we can move out of a variable rate mortgage at any time. Once we go to offer I will get full disclosure of their T&Cs I guess!
 
Brendan Burgess said:
No, there is no minimum period you have to commit to on any mortgage.

If you have a variable rate mortgage, you can repay it in part or in full any time without a penalty.
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Lenders generally insist that FTB borrowers have made 12 months of repayments before accepting them as switchers. It doesn't matter if you are on an SVR or not. Perhaps they have a similar policy rule for other borrowers, such as those coming out of restructures?
 
This should be bread & butter stuff for a broker.

As @Brendan Burgess says, there is no PTSB penalty for early redemption of a variable rate mortgage.

BUT, your broker is earning commission from PTSB. When you repay within 3 years, they can claw back a portion of the commission that the broker received. Your broker in turn will most likely have a clause that they can recoup that amount from you. If it's standard Brokers Ireland template terms & conditions it'll be in there.
 
That makes sense and was something I considered.

I understand what we are doing is a little out of the ordinary, as we are switching lenders now but possibly looking to switch again if we move House in a year or two.

Our initial plan was to fix a 5 year green rate however two things are putting me off this, firstly it’s likely we will look to move House in a year or two at most hopefully (and will need to increase the mortgage I’d imagine a little ) so we will not be able to port the mortgage with PTSB and would need to break our 5 year fixed rate. This could incur quite a penalty if rates rise as we expect.

Secondly as I mentioned, our broker told us only two lenders offer to those coming out of a restructure despite all being in order. I would really like flexibility to switch in May of next year (when I’ve done my 24 months after restructure that most banks seem to require).
 
Mumof4 said:
This could incur quite a penalty if rates rise as we expect.
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There will be zero break fee if interest rates rise.

Mumof4 said:
I would really like flexibility to switch in May of next year (when I’ve done my 24 months after restructure that most banks seem to require).
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I'm confused. Are you trying to switch now or next year?
 
Mumof4 said:
As I am only 14 months out of a restructured arrangement, I only had the option of applying to two lenders at this time, Haven and PTSB, neither of which have favourable rates.
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Did your broker make it clear to you that AIB do not accept broker applications, but you can apply yourself?
 
This is from Brokers Ireland

Mortgages
We may receive up to 1% (or whatever maximum is applicable) of the loan for arranging mortgage finance. This commission is paid by the mortgage lender. The actual amount of commission will be disclosed at a later stage in the ESIS (European Standardised Information Sheet) which will be forwarded to you. Information on the variation in levels of commission payable by the different creditors providing credit agreements being offered are available on request.

(Note: Also include fees if you charge fees, e.g. you should outline a fee of X is charged for arranging your finance/application/advice and the overall cost of paying the charge over the term of the loan)
For example: We charge a fee of €X for advising on a mortgage application, this fee is non-refundable. This is not in any way an indication of mortgage/loan approval. Our fee will be notified to the lender who will include this fee into the calculation of the APRC (Annual Percentage Rate Charge).

Please note that lenders may charge specific fees in certain circumstances and if this applies, these fees will be specified in your Loan Offer. You have the right to pay a fee separately and not include it in the loan. Typically, this situation arises in relation to specialist lending.

If we provide mortgage advice and obtain a Loan Offer for you and you subsequently do not proceed with your mortgage application through our firm, we will charge you an arrangement fee of €x for our services.
 
Did you switch yesterday?

On Sunday, your mortgage was with EBS

Key Post - Switch or re-fix my mortgage? Breakage fee calculator and savings estimates for your case (Ireland)

Hi Paul, Not sure if this will be answered but thought i'd try! Really should have had this fixed last year but somehow life got in the way... Looking at fixing it at 3.6% Green rate for 5yrs at AIB. Would it be a good move? Is there any admin cost involved if we decided to do so? Many thanks...
www.askaboutmoney.com

Brendan
 
RedOnion said:
Did your broker make it clear to you that AIB do not accept broker applications, but you can apply yourself?
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We could only apply to PTSB and Haven according to our broker
Technically it is, they sold it to Mars Capital last year but honour the EBS T&Cs, not entirely sure why that’s relevant? My questions don’t relate to my existing mortgage but around switching to PTSB
 
Mumof4 said:
We could only apply to PTSB and Haven according to our broker
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AIB don't accept broker applications, which is the main reason your broker didn't include them.
Haven is a subsidiary of EBS, which is a subsidiary of AIB. If Haven would consider you, in most cases so too would AIB. Completely different interest rate options.
 
Thanks so much Red Onion. EBS sold our loan last year to Mars Capital so as EBS, Haven and AIB are all linked I can’t imagine any of them taking the loan back on. I didn’t know AIB didn’t accept brokers rates so makes sense
 
Brendan Burgess said:
Your thinking, or maybe it's just your writing, seems a bit muddled.

Could you clarify the above.

Brendan
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Currently our rate is 3.7% with Mars. We are switching lender as we do not want to stay with Mars. The loan was originally with EBS therefore we never chose to have a loan with Mars Capital. With PTSB we can opt for the same variable rate and avail of €9k cash back which, less switching fees, will leave us with €7k which we can add to the mortgage repayment as PTSB allow overpayments. Is that a little clearer? My initial question was would I then be tied to PTSB as the broker appeared to think I would be. Red Onion answered this I believe (due to commission clawback)
 
Mumof4 said:
The loan was originally with EBS therefore we never chose to have a loan with Mars Capital.
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If Mars Capital is charging you only 3.7% , then it really doesn't matter whether it's Mars or EBS.

You will incur expenditure in moving.
If you trade up again, you will face a clawback of the cashback via the broker's refund.

Overall, I think that you are better staying where you are. When you trade up your credit record will be cleaner for longer and you will have more choice.

Brendan
 
Thank you for your comments Brendan
 
noelÓm said:
Lenders generally insist that FTB borrowers have made 12 months of repayments before accepting them as switchers.
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Would you have any specifics on which lenders insist on this or those that don't?
 
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