Ulster Bank lowest rate, but smallest mortgage?

Eireog007

Registered User
Hey guys

Wife and I are currently in the process of meeting with the various institutions to discuss mortgage approval and we are obviously getting different rates from the different banks etc but what surprised me is after meeting with 4 we have ended up with 4 different salary multiplier exemptions when I thought they would all work from the same numbers.

Anyway my question revolves around whether or not anybody has had any experience with haggling with institutions to up their salary exemption based on having proof of other banks offering a higher exemption based off the same salary etc.

Ulster have been the lowest so far which is disappointing as they are offering the most competitive rates currently.
 
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MrEarl

Frequent Poster
It may not be a coincidence that the lowest lending multiple and lowest rates go together, as the lender is taking a different level of risk.
100% correct and rightly so, tbf .. those presenting the lower risk should have it reflected in a lower lending rate.
 

Eireog007

Registered User
I honestly would have thought that it would be the other way around in that the lower the rate offered would lead to them being more comfortable offering a larger amount of money for the mortgage.

The salary multipliers we have been offered so far are

Ulster: 4x
AIB: 4.5x
BOI: 4.75x
PTSB: 4.89x
KBC: 6.14x
 

Eireog007

Registered User
As far as I’m aware the terms are between 33 and 35 years depending on the institution but those are still huge variations. KBC are basically offering over 50% more of a mortgage than Ulster.
 

RedOnion

Frequent Poster
There's lots of variables, without knowing your circumstances.

1st thing to remember is underwriter doesn't look at multiple of salary. They look at monthly repayment capacity.

Salary multiplier is only used as a crude benchmark by regulators, and some posters here who say the banks are giving you too much money!

When assessing affordability, UB have the highest monthly amount required to sustain living after mortgage payment. They offset that slightly for families, as they're one of the few that allows children's allowance as income.
However, they stress test everything! Even if you take a fixed rate, they look at what your repayment would be at +2% rate increase.

KBC will leave you less to live on each month, and don't stress your repayment if you've 5+ year fixed rate.

You should really look at it the same way yourself. If you are looking at borrowing 6x income, it's leaving you with 2,000 per month to live in after mortgage. Things will get right if interest rates increase, or your family grows.
 

Eireog007

Registered User
Oh I’m not just going to be going with the highest mortgage amount that’s on offer, as you said that’s just one variable in the mix. I just find it interesting the massive differences between the institutions based on the same couple etc.
 

Eireog007

Registered User
Oh and just for further clarity we are a married couple, no debt whatsoever, no dependents, and a combined salary of 90k. So some things like child benefit etc are not a factor for our applications.
 

RedOnion

Frequent Poster
They've both calculated you can afford about 2k per month mortgage, but the assumptions they use are very different.

So, the difference between 550k at 2.6% per month over 35 years Vs 4.6% (stressed rate) over 33 years is 700 per month.

That'd cover a mortgage of 150k comfortably.

Its interesting to see the difference in total terms.
 

Eireog007

Registered User
Yes but Ulster are offering the least amount with the lowest rates which is what I find interesting because you would assume the lower the rates they offer the more of a mortgage lump sum as you could afford to repay more on a monthly basis.
 

RedOnion

Frequent Poster
Yes, but they stress test that at about 4.6%. they don't use their rate to see what you can afford.

What someone was trying to say earlier is they can give low rates by not giving high value mortgages.
Their tighter underwriting criteria should lead eventually to them needing less capital, meaning their mortgage book will be more profitable, even at lower rates.
 
we are a married couple, no debt whatsoever, no dependents, and a combined salary of 90k.
It still seems to me that €540k is way too big a mortgage.

You might well have kids which would increase your expenses and probably lower your earning capacity.

People can lose their jobs. You might be very safe now, but over the next 35 years, there is a reasonable chance that you may have financial problems.

I assume you are two young professionals and they see your earnings rising.

But whatever way you look at it, that is too big a mortgage.

Especially when they will be unable to repossess if you stop paying.

Brendan
 

Eireog007

Registered User
It still seems to me that €540k is way too big a mortgage.

You might well have kids which would increase your expenses and probably lower your earning capacity.

People can lose their jobs. You might be very safe now, but over the next 35 years, there is a reasonable chance that you may have financial problems.

I assume you are two young professionals and they see your earnings rising.

But whatever way you look at it, that is too big a mortgage.

Especially when they will be unable to repossess if you stop paying.

Brendan
Oh absolutely, as tempting as it is to start shopping in a higher bracket with that money it’s just way too high of a % of our salary’s to be putting in one basket and we will be looking to start a family soon which will put a strain on our finances anyway.
 

Coldwarrior

Frequent Poster
I honestly would have thought that it would be the other way around in that the lower the rate offered would lead to them being more comfortable offering a larger amount of money for the mortgage.

The salary multipliers we have been offered so far are

Ulster: 4x
AIB: 4.5x
BOI: 4.75x
PTSB: 4.89x
KBC: 6.14x
6x salary, wow, thought the days of banks giving multiples like that were long gone. Can I ask are you in jobs that have a high likelihood of substantial salary growth? For example if a couple were both junior doctors etc I could probably understand such a multiple but otherwise it seems extreme.
 

Eireog007

Registered User
6x salary, wow, thought the days of banks giving multiples like that were long gone. Can I ask are you in jobs that have a high likelihood of substantial salary growth? For example if a couple were both junior doctors etc I could probably understand such a multiple but otherwise it seems extreme.
I would classify us as in jobs that have solid salary growth potential in that we are both mechanical engineers but I wouldn’t have thought that it would be enough of a factor to go to 6.14 times salary.

Yeah after I had the meeting I rang my father and told him to get all of his money out of Ireland as the banks are clearly losing the run of themselves again.

Each bank I’ve gone to has upped the ante on the last, I’m almost scared to go ask EBS I could end up with a mansion on Kiliney hill lol.
 
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