Which is the best lender to take out a mortgage with? - Discussion

Brendan Burgess

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Hi sh

Interesting point and I have incorporated it in the table.

You can't rely on switching to another lender after one year. You should be able to, but lending criteria change. People change jobs,etc., so you might not be able to move.

After you allow for the 0.5% discount, it's only marginally cheaper than AIB or Ulster Bank, so I think that they remain the Best Buys.

Brendan
 
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From 1 October 2015, EBS LTV variable rates will be 5bps lower than AIB's equivalent rates.

http://www.askaboutmoney.com/threads/aib-cuts-all-rates-by-0-25-svr-now-3-65.195210/

I would suggest that it would be more accurate to say that AIB's current policy is to apply the same rates for existing borrowers to the rates offered to new borrowers with equivalent LTVs. There can obviously be no assurance that this policy will be continued indefinitely.
 

When AIB's policy changes, I will change the post. Likewise when Bank of Ireland or KBC changes their policy, I will change the post.

Brendan
 
Brendan Burgess said:
When AIB's policy changes, I will change the post. Likewise when Bank of Ireland or KBC changes their policy, I will change the post.

Brendan
Click to expand...

Fair enough - I suppose it's clear that these are AIB's current pricing policies/practices and not contractual mortgage terms.

I would be interested to know if anybody can see a good reason for choosing AIB over EBS (given the fact that EBS offer a 5bps discount to AIB's LTV rates)?

As an aside, it's great to see some competition back in the mortgage market again.
 
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The difference is not significant enough- .05% -to mention give them three separate columns at the top of the table.

Brendan
 
Brendan Burgess said:
Best buy under 60% - Ulster Bank
Although 0.1% above KBC's rate,they pass on rate cuts to existing customers.
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Do we have confirmation that UB pass on reductions to existing customers - their recent reductions were structured as "lifetime" discounts from the SVR, but they haven't actually reduced the SVR. Are those discounts available to existing customers - not clear from their website. If they increase the discount to win more business, I'd imagine that anyone that takes out a mortgage with them now will be stuck on whatever discount they signed up to.

All the banks seem to be engaged in a dance of deception - special offers, discounts, managed rates etc without actually reducing their Standard rate.
 
Brendan Burgess said:
Hi Sh

Ulster Bank does not discriminate between new and existing customers.
Click to expand...

Hi Brendan, In relation to your post above, I took out a mortgage with Ulster Bank in early Sept 2015, with an LTV of c.75% and got their Discounted Variable Product (SVR - 0.4%) at 3.9%. My first payment is due in the next couple of days so I contacted them last week to determine that I would automatically get the new rate (SVR - 0.6%) announced in mid September, a week after I received my funds. I received the following email from my branch:

"I have just checked with our mortgage team in Uk an they have confirmed that our system will not automatically change to the 3.70% which is what you do qualify for currently we have to request a change and a rate sheet to be issued to you.
I have ordered the rate sheet so when you get this in the post you will have to select the 3.70% SVR rate and sign and then return it back to them and then the rate will be changed.
Your mortgage payment on the xxx is going to go out though on the 3.90% rate they advised.
The rate sheet should be with you in about 10 working days".

It seems odd that I would have to apply for a rate change when I remain on the same product and as the response says I 'qualify' for it. With my previous lender any rate changes were automatically applied. Also, UB did not notify me, in September when the rate changed, that in order to get the lower rate I would have to sign this 'rate sheet'.

Am I missing something here or should the new rate not automatically apply as I remain on the same Discounted Variable product?
 
Hi Phil

That sounds like a systems problem. UB has a creaking computer system, so they just can't do it automatically. Just sign the rate sheet.

Brendan
 
Sorry guys, please forgive my ignorance here but I simply do not get why AIB is better than KBC? Does this mean that they will pass on further ECB cuts? Is this not meaningless if the ECB rate is already at 0.05%??

Best buy under 50% - AIB
Although 0.1% above KBC's rate,they pass on rate cuts to existing customers.
 
Hi Deano

Good question.

It's not really about the ECB rate.

Although the ECB rate has not reduced for some time, Irish lenders have cut rates for new business.

However, they are under no obligation to cut rates for existing business. So if you are a customer of KBC with an LTV of less than 50% you are paying 4.15%.

AIB did cut the rates for existing business as well as for new business.

I expect new business rates to fall further in the coming months.

I expect that AIB will pass on similar cuts to existing customers. I don't expect KBC to do so.

Brendan
 
OK Brendan, thank you. This would be for new business so I guess for me that KBC would be better.
 
As soon as you get your mortgage with KBC you are an existing customer. you are not eligible for any further cuts to the rate you get when you sign. KBC won't pass on any better rates. in X months time if AIB reduce their rates by 0.2% you will be better off. Stay away from KBC...
 
Hi folks, I'm caught up between the UB and BOI rates. My situation is LTV of 80% and a mortgage of 392,000. I'm trying to calculate the cheapest one to go with, I will base both over 5 years. I will also assume (incorrectly I'm sure but need to base it on some assumption) that the VR will stay the same or at least they will rise/fall together. UB seem to be more favourable here as they pass on rates to existing customer, BOI I believe don't?

Option 1: Go with a variable rate, 3.35% with UB and 1,500 back in legal fees. 4.2% with BOI and 2% cashback. I've calculated the repayments to be as follows:

UB, 5 years at €1,586.22/month so over 60 months this is €95,172.96 - €1500 legal fees = €93,672.96
BOI, 5 years at €1,783.01/month so over 60 months this is €106,980.83 - €7,840.00 2% cashback = €99,140.83

Clearly UB are the winners here.

Option 2: Go with a 5 year fixed rate. 3.6% with UB and 1,500 back in legal fees. 3.8% with BOI and 2% cashback. I've calculated the repayments to be as follows:
UB, 5 years at €1,642.89/month so over 60 months this is €98,573.58 - €1500 legal fees = €97,073.58
BOI, 5 years at €1,688.97/month so over 60 months this is €101,337.97 - €7,840.00 2% cashback = €93,497.97

Now we flip to BOI winning and BOI winning overall compared to option 1 if UB don't revise their rates downwards during the 5 years.

Option 3: This is where I am unsure, I could go with a UB 3year rate of 3.2% and BOI rate of 3.6% but then what do I assume I will pay for the remaining 2 years while I would have to wait for the BOI clawback to finish.

Is anyone able to verify that my calculations are correct?
The 3.35% VR with UB seems to be the best on the market currently, does anyone know if they have a rate cut in the future will this special rate also get a cut? It's their high value customer rate when you borrow more than 250k and stay within 3.5 times your annual salary.

Is there any other banks I should be looking at? UB seem to be the best across the board at the moment as far as I can see.
 
I don't think that anyone who has a choice should fix their rate. I have posted about it in the follow up post here:



So it seems to me that UB at 3.35% is the best choice for you.

Brendan
 
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