Whats the best switcher mortgage at the moment?

A

ALEXALLI

Registered User
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34
Hi,

We are currently with EBS and will be coming up to the end of a 1 yr fixed rate with them at 31st August. I rang them today and they told me that they will be sending me out a letter stating that I can go again with another 1 yr fixed rate at 4.6% - We were fixed at 3.3%. This means that our Mortgage repayment is going up by €167 per month. However, we also took out a home improvments loan a few months ago and this is costing us €120.00 per month. We will have 2 children in a creche from september and this will cost us €860 per month. So basically heres the way we stand

EBS - New mortage repayment (less tax relief + home insurance, life & payment protection) + €120 (house improvment loan) = €1392.16

Bank of Scotland (pay off the €120 loan) new repayment = €1180.00 (also including house insurance, life & payment protection-

Therefor there is a saving of €212. per month.

Now with 2 children in a creche part time I really could do with this extra €212. per month iykwim.

I have a solicitor who will look after this for us at a very reasonable price as he is a friend..

So, do you think it is worth while to switch bearing in mind that we will now be going onto a variable rate with bank of scotland whereas the other price with ebs will be fixed for 1 year...

any advice would be much appreciated.

Thanks,
 
General advice-don't fix to save money, only fix to know your repayments with certainty.

If you are on a variable rate, there is a very good chance it will rise in the next 12 months.

Equally, any fixed rates on offer will have future anticpated rate changes priced in. Banks don't lend to lose money.

There are many other threads on fixed v. variable rates.
 
ALEXALLI said:
hi

anybody got any advice please???????
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The only advice, apart from the very sound advice given by CCOVICH, is do not go with a 1-yr fixed, particularly with EBS, as they are the most expensive by a long way, as can be seen from the attached screen-cap from Prima Finance comparison web-site.

[broken link removed]
 
Thanks Irishpancake.

I am still toying with the idea of the discounted tracker rate with bos...what do you think about iib..they are offering a 1 year discounted variable rate...do you think its a bad idea to fix for 1 year in general...im just worried that if im not a fixed rate that the rates will go through the roof!!! BOS dont offer a fixed rate at the moment!

Your advice would be greatly appreciated..

Thanks,
 
It seems that your Top Up loan with the EBS might be at a higher rate than the normal home loan rate from the EBS? and that it is over a shorter term than your home loan? this is why your repayments are higher. By going with HBOS you are rolling your top up loan in to the new mortgage over a new 20 year period and will be paying the interest on the top up over the next 20 years.
I am certain that the ECB will increase rates over the next year or so. They are forecast to rise to 4% by June 2007. Still below the 4.6% fixed 1 year rate that the EBS is offering you. What happens to the ECB rate after next June is the real question. Does it continue on rising or stop?
As you are only talking about fixing for 1 year I think I would move to HBOS.
Finally have you checked out other options on home insurance and mortgage protection insurance or did you just accept the EBS insurance packages because you were eager to get the loan from them? I can assure you that there are far cheaper packages out there than what they are offering.? Are you going to make the same mistake with HBOS?
 
Were I offered a 3 year fix at 4.2% or so I would simply take it TBH . I would take a 2 year fix at 4.4% .

By then the little dears should be reaching the end of their full time careers in the creche .
 
Grizzly said:
It seems that your Top Up loan with the EBS might be at a higher rate than the normal home loan rate from the EBS? and that it is over a shorter term than your home loan? this is why your repayments are higher. By going with HBOS you are rolling your top up loan in to the new mortgage over a new 20 year period and will be paying the interest on the top up over the next 20 years.
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I think it's BoSI not HBOS.

However rolling a Home Improvement Loan into the main Mortgage can be justified.

It depends on what your view of the Interest Rate cycle is, but it looks as if we are at the beginning of the upward cycle, apparently.

Banks have factored this into the fixed rates they are offering now, so going fixed means you will be paying a premium for the secutity of knowing your repayments into the short-term future.

It also means that you will not be able to exit from the contract without paying for the privilege, and will not be able to vary/accelerate the repayments either by lump-sum or regular over-payments.

The BoSI option of taking a discounted tracker for a two-year period looks good to me, as it may allow you to ride out the worst effects of the rising rates, without the bad effects of short-term fixed rates.

Also, AFAIK, BoSI offer a pretty good switcher incentive, in that Legal Fees and Valuation are covered, according to [broken link removed].

Note that this is for mortgages of <=75% LTV.
 
CCOVICH said:
HBoS are the parent company of BoSI.
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Thanks for the info CC, i just wasn't sure as there is also RBoS, which is the parent of Ulsterbank.

So many Scottish Banks with similar names :confused:

On the 1-year fixed rates, i would almost always regard them as teaser rates or loss-leaders, utilised by those providers who would not have the best Standard or Tracker rates, and which perform no really useful function in the context of 25-35 year Mortgages common to-day.
 
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