Coming to end of fixed BOI 2 Yr - Help!

[Colm Faherty]

Hi there
I have done some research and tried some formulas but maybe some of the gurus on here can help out.

I bought a house for 270k in 2013 and went on a 2 year fixed 4.49% with a borrowed amount of 205k from BOI. My monthly repayments are €1221.

I am being offered the much improved 3.6% to stay on a fixed 2 year (€1135 monthly repayment) starting in SEP (EDIT: I had previously said Dec) and slightly higher but still good rates for 5/10 year fixed which I'm not really interested in. The document I received also offers the variable rate of 4.5% (€1227 repayment). However this 4.5% rate seems to be in line with BOI's LTV >80%. My LTV (205k/270k) falls into the 61-80% BOI LTV rate which is 4.2% (?)

Anyway, I've read an independent article saying stay away from the 3.6% fixed rates that BOI offer because their variable will soon come down anyway. Personally I think the fixed option at 3.6% looks good. I may also be able to pay off 10k in Dec which of course may make a difference.

Just wondering what option may be the best one to take. Current loan outstanding is around 195k. Apologies if this is a bit convoluted!

 

[Brendan Burgess]

Why restrict yourself to BoI?

Your LTV is 72% (195/270)

If you fix for two years, you won't be able to avail of lower rates in the future.

AIB has a variable rate of 3.55% and is probably more likely to reduce this than BoI is.

Officially, BoI does not offer the LTV rates to existing customers, so if you want to stay variable with them, you are stuck on 4.5%. Unofficially, they will give you the rate if you push them. You should tell them that you are switching to AIB , and see what they say.

Brendan

 

[Colm Faherty]

Thanks for that - I will try pushing them. Btw the house is probably worth 350k + now so a re-valuation would probably be worth my while would you say?
I guess I see switching banks as a big job although I have a couple of weeks.

 

[Brendan Burgess]

Thanks for that - I will try pushing them. Btw the house is probably worth 350k + now so a re-valuation would probably be worth my while would you say?

Your LTV is 56% (195/350)
After you pay off 10k it drops to53% (185/350)

If the valuation was a bit more you could get the AIB rate for <50% LTV of 3.35%

I guess I see switching banks as a big job although I have a couple of weeks.

There is no hurry. Ring BoI and demand a better variable rate which they will give you after the fix expires. You can move whenever you want to. You might even wait until you see if other banks respond to AIB's rate cut and the Minister's meeting with the lenders in September.

Brendan

 

[Colm Faherty]

Yeah I think in summary push them for better rates or switch and definitely don't go with the fixed for now. I guess I was looking at the extra €85 in my pocket in the short term next couple of months if I went with the 3.6% fixed straight away.

I have edited my original post. I come off current fixed deal in Sep, not Dec. So short term I would pay 1135 instead of my current 1221 if I went with 2yr fixed at 3.6%.