What is the minimum gain to switch mortgage

Switchornot said:
I believe the only way the banks will start dropping rates is if more people start switching frequently - that will drive competition. I appreciate that the option isn't available to everyone but it seems there is a lot of inertia out there at the moment too.
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Fully agree.

Two switches to reduce your rate by ~25% over 12 months - well played!

KBC currently reserve the right to claw back all or a portion of the €2k contribution if the mortgage is redeemed within 3 years of drawdown. I'm pretty sure the claw back provision was only introduced by KBC when they increased the contribution from €1k to €2k last summer.

Somewhat frustratingly, AIB still have not published details of any T&Cs that might apply to their €2k contribution offer.

In any event, I agree that these contributions are small beans in the greater scheme of things.
 
Sarenco said:
Fully agree.

Two switches to reduce your rate by ~25% over 12 months - well played!

KBC currently reserve the right to claw back all or a portion of the €2k contribution if the mortgage is redeemed within 3 years of drawdown. I'm pretty sure the claw back provision was only introduced by KBC when they increased the contribution from €1k to €2k last summer.

Somewhat frustratingly, AIB still have not published details of any T&Cs that might apply to their €2k contribution offer.

In any event, I agree that these contributions are small beans in the greater scheme of things.
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Sarenco - Thanks for the information regarding the KBC clawback. It was €1k I received at the time so hopefully that puts me outside the remit of a clawback.
 
Switchornot said:
I spoke to KBC yesterday and they confirmed there is no movement expected at present on rates for existing customers.
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Interesting from KBC. I have written to them today formally asking them to review my account and formally requested a reduction in the rate offered.
We will see what happens - but if they confirm they will not do it, then I will more than likely be following down your path, subject to clarification from AIB on a few things such as the clawback on the 2k and will request a redraw facility for overpayments from them also (which I find a very valuable security).
 
Sarenco said:
Somewhat frustratingly, AIB still have not published details of any T&Cs that might apply to their €2k contribution offer.
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Agree, it would be nice to clearly see these T&C's as it will impact the decision making process for a number of people, especially with Frank Money floating around in the background
 
Switchornot said:
Thanks for the information regarding the KBC clawback. It was €1k I received at the time so hopefully that puts me outside the remit of a clawback.
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I have checked my mortgage agreement with KBC on any clawback from the 1k fee contribution I got last year also, and can find absolutely nothing in it. I have asked KBC to confirm this, but to date they have not. If its not in the mortgage contract, it does not count (as they keep telling us!)
 
Switchornot said:
I am leaving KBC because I switched to them under the impression I was getting a variable rate but in reality, am on a fixed rate of 3.55%.
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I would go a step further than that - I would say that KBC treat their SVR customers as upward only variable rate, and the rate you get when you sign up will effectively be the minimum rate you will ever pay them.

Sadly the model seems to be working for them at the moment. However, I do believe a reasonable number of those who switched last year into KBC will switch out again later this year, once clarity exists in the market around where rates are going - including what the FF bill does (if anything) and if new competition enters the market
 
gnf_ireland said:
I would go a step further than that - I would say that KBC treat their SVR customers as upward only variable rate, and the rate you get when you sign up will effectively be the minimum rate you will ever pay them.

Sadly the model seems to be working for them at the moment. However, I do believe a reasonable number of those who switched last year into KBC will switch out again later this year, once clarity exists in the market around where rates are going - including what the FF bill does (if anything) and if new competition enters the market
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The Sunday Business Post carried a story yesterday stating that AIB are planning to reduce their variable rate again by the end of the summer in order to grow market share. Hopefully this is the first sign of proper competition in the mortgage market.

If a couple of the banks start dropping their rates to 3% or below, then the other banks will have to follow in a fight for market share. The volume of switchers will surely increase as the rate differential grows between the banks with lower rates (AIB, Frank) compared with those with higher rates (including those caught with KBC's "variable" rate).
 
@Switchornot
Agree completely. Hopefully the people who were proactive enough to switch to KBC in late 2014 and early 2015, will also be proactive enough to switch away from them when the rate difference grows to >0.5%. It will already be the case for those who switched at 3.65% and soon for those who switched at 3.55% (based on the SBP article).

I agree that for those with LTV <80%, competition is the only real way to resolve this issue. This is why I think the likes of Frank are key, as they will hopefully create downward pressure on the rates which others will have to respond to. However, this can be done in 2 ways - increase the incentives to sign up (2% cashback model) or lower the SVR rates.

It will still not stop the likes of KBC differentiating between new and existing customers - the only thing that will change that is if enough people who can switch away from them do so.

The issue still exists for those who cannot switch, and those will probably need a level of legislation to assist their plight in the short term.
 
Hi folks, I cannot find a 3.1% interest rate listed anywhere for AIB. What LTV category is this rate for and where did you obtain it? I also moved to KBC last year and am initiating my next switch - either to UB or to AIB if AIB can beat UBs 3.2% rate.

**Scratch that - found it. I would fall into the 3.3% bracket based on LTV so UB is more attractive right now.
 
AIB are due to drop their rates as and from July so make sure you are taking the new rates into account
 
Just to update anyone who is interested on how the switch process is progressing: I met AIB 2 weeks ago and took the application forms and information request list from them. The information required is standard - payslips, P60's, bank statements etc. I printed what was available on-line and ordered the rest from my current bank. I had received everything I needed 10 days later so handed back the forms on Monday of this week. On Wednesday of this week (exactly 2 weeks on from my initial meeting with AIB), I received confirmation that I had been approved and that the letter of offer will issue to my solicitor early next week.

So far, I estimate that it has cost me approx. 2 hours of my time to get to this point. My next task is to organize a valuation but that should not be very time consuming. Once that is done, I think the majority of the work on my side is completed. Signing off on various documents should be the extent of my involvement from here to completion.

I will keep you updated in relation the time/work involved in switching as a few people had mentioned that this would put them off.
 
Switchornot said:
Just to update anyone who is interested on how the switch process is progressing: I met AIB 2 weeks ago and took the application forms and information request list from them. The information required is standard - payslips, P60's, bank statements etc. I printed what was available on-line and ordered the rest from my current bank. I had received everything I needed 10 days later so handed back the forms on Monday of this week. On Wednesday of this week (exactly 2 weeks on from my initial meeting with AIB), I received confirmation that I had been approved and that the letter of offer will issue to my solicitor early next week.

So far, I estimate that it has cost me approx. 2 hours of my time to get to this point. My next task is to organize a valuation but that should not be very time consuming. Once that is done, I think the majority of the work on my side is completed. Signing off on various documents should be the extent of my involvement from here to completion.

I will keep you updated in relation the time/work involved in switching as a few people had mentioned that this would put them off.
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Hi Switchornot, I am currently looking at switching, most likely to AIB.
I had seen previously on this website that AIB are introducing a €2000 legal fees incentive along with their new rates in July.
Are they giving this to applicants like yourself who are in the process of switching?

I plan to speak to them next week. I had filled out the online application but got a message back from AIB that switchers need to apply in branch/contact by phone.
Current house value is €275,000. Ulster Bank mortgage balance of €197,000 @ 3.7% with 27 years remaining.
 
Steelman said:
Hi Switchornot, I am currently looking at switching, most likely to AIB.
I had seen previously on this website that AIB are introducing a €2000 legal fees incentive along with their new rates in July.
Are they giving this to applicants like yourself who are in the process of switching?

I plan to speak to them next week. I had filled out the online application but got a message back from AIB that switchers need to apply in branch/contact by phone.
Current house value is €275,000. Ulster Bank mortgage balance of €197,000 @ 3.7% with 27 years remaining.
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Hi Steelman, yes, AIB confirmed I would receive the €2k legal fees incentive provided draw down was after 1st July. That won't be an issue at this stage as I expect it will take 4/5 weeks for the legal work to be completed anyway before the switch can go ahead.

I met them in branch. I believe this is a more efficient option as you can walk through the application form in person and ask any questions you may have before chasing down the documentation required.
 
@Switchornot
Just wondering if you did switch to AIB and how did it go?
KBC is now signalling a rate reduction to existing customers so maybe they are getting the message from customers using their feet...
Thanks!
 
In our situation we started with boi at 4.5% and gradually got them down to 3.5% by threatening to leave. In reality we couldn't switch as my role was made redundant. As soon as I secured a new position we applied to EBS. Mortgage advisor was a gent, paperwork was fine, am on a contract but just had to send my CV. EBS paid for the valuation. Got a rate of 3.2% as ltv a lot lower due to improvements and market increases. Cost was 450 for engineers cert for work on house, 1500 for legal. 4k in cashback plus rate savings. Did all the paperwork/visits during the day at lunch. Would highly recommend it. Considering moving to AIB next year too. Thanks to this wonderful site for all the advice!
 
I switched from BOI to AIB recently, rate went down from 4.1 to 3.1 - towards the end of the switching process BOI reduced my rate to 3.4% but we switched anyway.
 
To all on here who have switched recently, is there anything you think would make the switching process easier

for example:
- ability to get a single professional valuation that could be used by any bank, and would be valid for 12-18 months [I am thinking similar to a valuation of an engagement ring for insurance purposes]
- ability to maintain the same life assurance/mortgage protection insurance cover? I am not sure about this but I was told by Zurich at the time that I could not keep the same cover when I switched for some reason
- agreed SLA's between banks for the supply of certain details (not sure if that really makes any difference in reality)

Anything else that you can think of that would help make the switching process easier?

Is there any scope for the banks to handle the switching between themselves, and their solicitors to handle the update on the charge on the property rather than require a solicitor on the customer side? Not sure I would advise this personally given the nature of a mortgage contract (being the biggest financial commitment most people will make), but wondering others options on this
 
LeannD said:
@Switchornot
Just wondering if you did switch to AIB and how did it go?
KBC is now signalling a rate reduction to existing customers so maybe they are getting the message from customers using their feet...
Thanks!
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Yes, completed switch in June. Process went very smoothly - took 6 weeks in total but no more that 4/5 hours of collecting documentation/meeting with bank etc. Legal fees came in at approx. Eur 900 but still received 2k from AIB so was worthwhile in my view given the limited amount of effort involved. Am hoping we may see another rate drop from AIB soon given KBC's recent announcement.
 
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