switching banks

[seánieboy]

hi there

i have a mortgage of €70,000 with the first active bank. i have a 3 year fixed rate mortgage finishing on the end of april 2010. i therefore am nearly 2 years into it. seeing as first active will be winding up and i will be paying my mortgage into ulster bank do you think i should change banks as ulster bank seem very non competitive with the likes of aib and boi mortgages this minute.

i am paying my mortgage at the rate of 4.85% and paying €456 per month over 20 years. i have checked about changing my mortgage over to AIB yesterday and theywere offering me a rate of 2.75% at the rate of €389 over the same period.

i have checked with first active what it would be to break my 3 year fixed and they have told me €1700. the AIB have also offered me €1200 to change banks and i also would have to get a solicitor which would cost about €600 and a valuation of maybe just over €100 from this particular money

do you think it would be justified to change to the AIB on these figures or wait until april of 2010 to change from this bank or maybe to stay with them full stop. by the way the €1200 that the AIB are offering only lasts for a period thats only determined by them

 

[irishlinks]

By just doing the sums it should be easy enough to work out the best option financially.
Saving 67 a month till April 2010 = 804
Cost to leave FA = 1700
Cost to join AIB - nil (I am sure they pay up to 1200 towards switching costs - I don't think they just give you 1200)
Total cost = 896
Even if AIB give you 1200 you will still be out of pocket by at least 400 euro.

The variable rate from AIB quoted looks like it already includes the latest ECB cut - but even if they drop it another 0.5% in May - you would then be repaying 370 a month - so still not really worth switching based on these figures.
I would hang on till the fixed rate expires then move if the rates are better elsewhere.