UB or PTSB

B

Bearish

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Ok so I have a mortgage with BoI now for 2.5yrs. In 2013 there were very few lenders so I took out an SVR before Dublin prices took off. After 6 months of getting nowhere with the bank on materially lower rates I've gotten offer letters from PTSB and UB. I didn't bother with AIB as the mortgage approval process with other banks took so long I didn't have the heart. It really would put you off switching!

Circa €500k mortgage at LTV in low 70%s.

Choice currently is PTSB 1yr fixed at 3.29% and circa 10k cash or UB 3.35% discounted variable with €1,500 cash.

It's hard to know which to go for as who knows where rates go but effective saving is circa €400pm at current rates versus BoI rates so it's worth the switch either way.

I'd appreciate members thoughts....
 
How long do you need to stick with PTSB without having to pay them back the 10k?

Also, what rate do you go to after the 1yr fixed?
 
Tough one.

Assuming I had no pressing need for the liquid cash, I think I'd be inclined to go for the UB offer simply because it maintains maximum flexibility.

You might well do better with the PTSB offer but you will probably have to repay the €10k if you redeem the mortgage in full within 5 years (and who knows what other offers might be available over the next 5 years) and you obviously can't know in advance what rate you will be offered at the end of the 1-year fixed period.

Either way, I definitely agree that you should switch.
 
If a cheaper offer comes along, and you are stuck with ptsb for 5 years, then you will regret going with them.

Ulster Bank offers its existing customers the rates available to new customers. That is quite a valuable commitment. In other words, if UB reduces their rates for new customers, you will be able to avail of them. If ptsb doesn't, sure you can switch to another lender. But will you still have the €10,000 and will you bother?

Go with the best long term value which is Ulster Bank. Actually, AIB might be a better bet, but you seem to have decided against them.

Brendan
 
Brendan Burgess said:
If a cheaper offer comes along, and you are stuck with ptsb for 5 years, then you will regret going with them.

Ulster Bank offers its existing customers the rates available to new customers. That is quite a valuable commitment. In other words, if UB reduces their rates for new customers, you will be able to avail of them. If ptsb doesn't, sure you can switch to another lender. But will you still have the €10,000 and will you bother?

Go with the best long term value which is Ulster Bank. Actually, AIB might be a better bet, but you seem to have decided against them.

Brendan
Click to expand...

The current variable rate offered by AIB at pauric's LTV is actually higher than UB's variable rate for amounts over €250k and AIB don't offer a cash incentive to switchers.

Strictly speaking, you wouldn't actually be stuck with PTSB for 5 years if you went for that option. If a particularly good competing offer came along within the 5 year period, it might make financial sense to return the €10k to PTSB in order to avail of that competing offer.

There are too many unknowns to say definitively that the UB option will prove to be the better option in the long term. I would value the additional flexibility offered by the UB deal but I could see that the PTSB option would make sense if a borrower had a pressing need for the liquid cash.
 
If you're low LTV you can always add the 10K to the mortgage next time you move, assuming the rival offer is attractive enough to make this worthwhile.

It's difficult to evaluate the interest rate value of the 2% cash back though - do you treat it as "free" borrowing? e.g. PTSB are offering .5% off for the first year, + 2% cash - how do you compare that with a slightly lower interest rate from UB (who are also offering 1500 cashback...)
 
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