Is switcher worth it if we have to reduce term?

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Bolter

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Hi my mortgage is with boi . I am considering switching to Ebs. Current mortgage outstanding 264k. Rate is 3.5% variable with boi.
Property worth approximately 600k so rate would be 3.3 % (I think) if I switch but would need to reduce term as current term ends when my husband is 71.
I contacted boi who offered me a fixed rate of 3% for 3 years.
While Ebs looks more attractive, is it still worth it if I have to reduce term by five or six years?
Obviously this increases repayments. (We could afford it but i want to buy back years in my civil service pension and can't do both!)

Separately, what's the position with Ebs eg if I wish to overpay mortgage (is it same as boi)
Appreciate any views. I was previously refused a switch to kbc (about a year and half ago) because of other loans but they are paid off now.
 
What about Ulster Bank?

They'll allow a mortgage run to age 70, you can get a variable rate of 3.1%, and they'll give you €1,500 which should cover your legals.
 
My original plan was to switch to Ebs then after a year switch again. The only problem is the reduction of the term.
The 3% fixed rate now being offered to us for 3 years looks attractive.
 
I don't think you should fix for three years. Hopefully, the campaign to bring down mortgage rates will succeed.

Any borrower with a variable mortgage rate is entitled to repay it in part or in whole early, without penalty.

Not sure you should switch to EBS. If they don't pass on cuts in future, you will be pretty much stuck with them.

You should look for long term value. AIB looks like the best bet. Low rates and a policy of passing on rate cuts.

Increasing the repayments doesn't usually matter. But if it's worth your while to buy back years, then maybe you can't afford to switch.

Brendan
 
Will we not have the same problem with Aib namely reduced term and increased repayments?
I'm finding it difficult to compare offers.
Could I not move to Ebs first then Aib after a year? The other option is Ulsterbank now.
Is it a big loss to have term reduced by five or six years
 
Brendan Burgess said:
Not sure you should switch to EBS. If they don't pass on cuts in future, you will be pretty much stuck with them.



Brendan
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Not meaning to start an argument Brendan but this advice is contradictory to your advice in the mortgage rates best buys thread.
Dated 2/2/17 you wrote
"EBS is now clearly the Best Buy

If you are taking out a new mortgage or considering switching, you should apply directly to EBS. It's important that you go directly to EBS as this deal is not available through mortgage brokers.

Their rates are slightly higher than AIB's, but they give 2% cash back without any conditions. In other words, if some other lender cuts their rates after a few months, but EBS doesn't, you can switch to the other lender and you do not have to give the cash back"

To answer the ops original question. I would advise switching to ebs for the cashback and switching back to aib after 12 months
 
Brendan Burgess said:
I don't think you should fix for three years. Hopefully, the campaign to bring down mortgage rates will succeed.
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I think its worth caveatting this statement with the assumption the OP can switch. If they cannot switch, then it would make sense to fix as BOI are on the record stating they do not intend to be competitive with variable rates and want everyone to fix. The only concern here would be what rate you roll back onto after the fixing term

You can also overpay by 10% on a fixed rate with BOI, so this would improve your term issue potentially and give you some breathing space to buy back the pension years in the short term
 
gnf_ireland said:
You can also overpay by 10% on a fixed rate with BOI, so this would improve your term issue potentially and give you some breathing space to buy back the pension years in the short term
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For fixed rates the maximum monthly overpayment is 10% of the monthly mortgage repayment, or €65, whichever is greater.

Not much breathing space if you asked me! :)
 
Galego said:
For fixed rates the maximum monthly overpayment is 10% of the monthly mortgage repayment, or €65, whichever is greater.
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I read this in my brothers mortgage agreement about a year ago and I am 99% sure the 65 euro part did not apply then. I know he is overpaying so will check how much he is doing so by

but yes, if it is capped at 65 euro then it is not as attractive as if it was 10% only. Will have to check that one out !
 
gnf_ireland said:
I read this in my brothers mortgage agreement about a year ago and I am 99% sure the 65 euro part did not apply then. I know he is overpaying so will check how much he is doing so by

but yes, if it is capped at 65 euro then it is not as attractive as if it was 10% only. Will have to check that one out !
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Let us know if the cap doesn't apply to him although I think it does to all aib fixed mortgages.
 
Galego said:
For fixed rates the maximum monthly overpayment is 10% of the monthly mortgage repayment, or €65, whichever is greater.
Click to expand...

Galego said:
Let us know if the cap doesn't apply to him although I think it does to all BOI fixed mortgages.
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Apologies @Galego I misread this last night. He is overpaying by 10%, which is more than 65 euro. I had read the statement was it was capped at 65 euro not 10% if greater.

So yes, he overpays by 10% and this cap applies.

That said, I wonder how many people really overpay by more than 10%, and if they do, then fixing is not the best option for them. They would be much better to have a variable rate or split mortgage to allow them more flexibiliy etc.
 
gnf_ireland said:
Apologies @Galego I misread this last night. He is overpaying by 10%, which is more than 65 euro. I had read the statement was it was capped at 65 euro not 10% if greater.

So yes, he overpays by 10% and this cap applies.

That said, I wonder how many people really overpay by more than 10%, and if they do, then fixing is not the best option for them. They would be much better to have a variable rate or split mortgage to allow them more flexibiliy etc.
Click to expand...

When I phoned BOI few months ago I was told it is capped at 65eur a month.

Anyone else knows about this BOI clause? Brendan?
 
leanbh said:
While Ebs looks more attractive, is it still worth it if I have to reduce term by five or six years?
Obviously this increases repayments. (We could afford it but i want to buy back years in my civil service pension and can't do both!).
Click to expand...

Of course reducing the term will be worth it because you will be saving on how much interest you would have paid. Did you not get an amortisation table so you could work this out. Or use a mortgage calculator.

In addition, is havign a mortgage until your OH is 70 a good idea? It's fine if you will still be working and can afford the mortgage.

You should also calculate the costs of buying back your pension and how much you gain with this, to see which is better, reducing mortgage term or putting money into pension.
 
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