I am glad I switched from Pepper

[Dadof2]

I posted this on another thread back in Sep’22. (Original info copied below)

Had a 1.5% tracker with Pepper and ECB rates had gone up a couple of times so I wanted to fix to keep monthly repayments down.

I ended up fixing in Dec’ 22 for 4yrs @ 2.2% with BOI.
Brendan was recommending I avoid BOI and I was trying to switch to Avant but unfortunately I was too late to avail of better lower rates so went with 2.2% that BOI were offering.

Was a struggle to make a decision to switch at times with constant back and forth on my part but happy now I did.
ECB rate is currently at 3.0% and still going up with another 0.5% increase forecast for Mar’23.
My mortgage repayments have gone up €90pm fixing for 4yrs vs c.€600pm if I stayed on the tracker which would have been 4.5% now (1.5% tracker + ECB 3.0%)
Had to make act to keep costs down now.
I’m sure in 4yrs time I’ll be switching again but it is what it is.
Will aim to make a lump sum payment in 4yrs time to improve the LTV and get the best interest rate I can.

Posting this update to help others make a decision- know I found it quite stressful at the time!! Good luck

Mortgage info as of Sep’22
1) Existing tracker margin: 1.5%
2) Amount outstanding on your mortgage: €340,000
3) Remaining term: 26yrs
4) Lender: Pepper (originally BOSI but never distressed/defaulted)
5) Value of your home: €420,000
6) Might you trade up or overpay your mortgage? Unlikely to trade up but will probably overpay at a later stage
7) Do you face any barriers to switching? No
8) What rates are you considering fixing at? 2.2% fixed for 4yrs with BOI
9) Does your house have a high BER rating which might qualify it for a lower rate? Check it here or estimate it if necessary. No it’s C3

 

[Brendan Burgess]

Hi Dad

Very interesting.

You are certainly much better off with BoI than with Pepper, but long term, Avant or AIB would be better.

But well done on getting out in time and at such low rates.

Since I advised you and others to avoid BoI, they became better value.

How come you were with Pepper? Were you a BoSI customer initially?

Will aim to make a lump sum payment in 4yrs time to improve the LTV and get the best interest rate I can.

Why wait for 4 years?

Some people get the idea that they must save up at very low deposit rates and pay down the capital when the fixed rate is up.
You can overpay your mortgage at any time - the break fee should be very small if any. But in any event, it will be a lot less than the interest you would pay over the next 4 years.

Having said that, if you fixed at 2.2% , it's possible that in the near future you might be able to put money on deposit at rates which might be not too far away from that , even after DIRT.

Brendan

 

[Dadof2]

Hi Dad

Very interesting.

You are certainly much better off with BoI than with Pepper, but long term, Avant or AIB would be better.

But well done on getting out in time and at such low rates.

Since I advised you and others to avoid BoI, they became better value.

How come you were with Pepper? Were you a BoSI customer initially?



Why wait for 4 years?

Some people get the idea that they must save up at very low deposit rates and pay down the capital when the fixed rate is up.
You can overpay your mortgage at any time - the break fee should be very small if any. But in any event, it will be a lot less than the interest you would pay over the next 4 years.

Having said that, if you fixed at 2.2% , it's possible that in the near future you might be able to put money on deposit at rates which might be not too far away from that , even after DIRT.

Brendan

Yes originally a BOSI customer

Short term plan involves building an extension (due to start this summer) so have been saving heavily the last few couple years to avoid borrowing the full amount. Another reason to fix the mortgage as increased mortgage repayments would have eaten into the savings!

Concentrating on the extension now and will start to build up the savings again over the next 4yrs (during the fixed period) to make a lump sum payment off the mortgage.