# Is it stupid to NOT switch mortgages..can't decide what to do?



## Fauve (14 Jan 2008)

Hi
Please bear with me, I need help from those in the know.
Our situation is this;
Fixed rate (PTSB) ended in Dec, and now at 4.8%.
We would qualify for the NIB loan to value mtg, at a rate of 4.5%.
Doing the sums and talking to NIB rep, we would make a saving of something like €16 per month on repayments. (factoring in TRS)
To switch it would cost us approx solr fees and valuation fee total; 930 minus refund from NIB 600 = 330.
We could use NIB legal team but in not so many words were discouraged from doing so as they are very very slow, by NIB rep.
I would prefer to use my own solr anyway, long time contact/friend etc.
When we met with NIB rep, I was never less sold a financial product in my life.  It was almost as if she was discouraging us from going ahead.
Very confusing and not at all expected.
We would also have to open an account with NIB, arrange for the salary to go into it.  It is not compulsory but rep told us that as the whole switching thing had kind of backfired on NIB as in they had loads of mortgage switchers but no account take up, they now would look most favourably and move quickly on new account holders as well.
So why are we so slow to change?

Are we stupid to not switch now while the offer still stands.
_Other little things_....
EddieHobbs referenced the NIB ltv mortgage about four times in Jan mag, this got me thinking.
The NIB branch that would be our local one was as quiet as could be when we visited, we thought it was closed or had skeleton lunchtime staff, however lunchtime came and went and there wasn't a rush of anyone anywhere.  Never been in a bank so quiet.
If they did relocate from nearby town, would we be in a quandry down the line if no real life branch?
Finally, NIB rep said we would be tied in for lifetime of the mortgage if we do switch, (17yrs), and in the future if they hike up the interest we would be unable to get out of it.
Another point to note is that we would have to take up a new Life policy on the mortgage, as the one we have is with Irish Life, at what everyone tells me is a good premium.  Even the NIB rep was surprised at what we were paying each month.  We would have to get a new policy if we switched companies, and I am guessing that it would cost more than what we are paying now.
To switch or not to switch ..that is the question????
Thanks for reading.


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## ClubMan (14 Jan 2008)

Fauve said:


> To switch or not to switch ..that is the question????


If the potential savings achievable by switching to a cheaper lender outweigh the possible switching costs (which some lenders will subsidise or subsume) then it makes sense to do so in my opinion. Is _NIB _the cheapest lender for your circumstances (e.g. _LTV _and mortgage amount)?


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## Fauve (14 Jan 2008)

Hi Clubman
Thanks again for your advice, we need to go through this ourselves again with a fine tooth comb to be honest as I don't know if much has changed since before Christmas, re better offers etc.
We were looking more at the short term re payback. The cost of switching would'nt even payback in the first year.  I know mortgages are to be considered in the longer term but when funds are tight even the odd hundred euros here and there makes a big difference.
The tax back cheque would enable us to now do the switch without too much impact, and wondering if we should now jump ship..
Just the prospect of mtg rising above the 4.8% fills me with some fear and I am wondering if we are foolish now to not avail of the 4.5% while it is there.
Having said that I think the Life policy premium would make up for any saving.
Might get a quote for that from NIB.
Sorry have to go, kid calling.
F


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## ClubMan (14 Jan 2008)

Fauve said:


> Just the prospect of mtg rising above the 4.8% fills me with some fear and I am wondering if we are foolish now to not avail of the 4.5% while it is there.


From this and your other thread I take it that you're on a tight budget. If you know for sure that heading towards 5% would start putting you under financial pressure then it may well make sense to opt for the best fixed rate available for your circumstances for whatever period of time you think it will take to improve your financial/cashflow situation - also assuming that you won't need to move in that time since the fixed rate early breakage penalties may be significant. 


> Having said that I think the Life policy premium would make up for any saving.
> Might get a quote for that from NIB.


If you mean mortgage protection life assurance then don't confine yourself to banks for this. In fact you are probably more likely to get a better deal elsewhere (e.g. a discount online broker such as www.123.ie or www.labrokers.ie etc. - there are more so please check them all out!) and you can switch any time. Do a search for previous threads on this issue too.


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## z109 (14 Jan 2008)

Fauve said:


> Another point to note is that we would have to take up a new Life policy on the mortgage, as the one we have is with Irish Life, at what everyone tells me is a good premium.  Even the NIB rep was surprised at what we were paying each month.  We would have to get a new policy if we switched companies, and I am guessing that it would cost more than what we are paying now.


I am not sure if this is the case or rep speak - that you have to get a new policy. If you are increasing the amount you are borrowing then you need to have life insurance to cover the extra, but you should probably only get a top-up policy if your existing cover is  at a good rate.


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## ClubMan (14 Jan 2008)

I also don't believe that you would necessarily have to get a new mortgage protection life assurance policy and if the _NIB _rep was saying this then I would be wary of them engaging in some sort of hard (mis?) selling? In any case even if you did need to take out additional or new cover then you are certainly not confined to the lender for that and you can freely shop around for it if you choose. Even if you stay with your existing lender you can do this.


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## Butter (15 Jan 2008)

I switched to NIB two years ago to avail of a better offer for our mortgage - we fixed at 3.29% for two years.  Unfortunately that is coming to an end next month.  I am glad we moved for several reasons.  We definitely did well financially out of it as the rate was so good.  Our branch is also very quiet and it doesn't wreck my head to go in (unlike the Ulster Bank nearby where I have my current account and it is incredibly busy all the time).  We opened a freebank account with NIB and we were never told that we would have to pay in our salaries.  I don't think that they can put that in as a condition of granting a mortgage.  We just transfer mortgage payments from the Ulster Bank to the NIB a/c every month by standing order.  Also if you are not increasing the amount you are borrowing you probably won't have to change your life assurance provider.  Ring them and ask if it is possible to just reassign the lender noted on the current policy.  This would be much less hassle and shouldn't end up with you having to take out a new policy. 
So in my experience it was worth moving, even with the (relatively) small hassles involved.  Admittedly I have moved mortgages three times in eight years to avail of better offers and it's always been worthwhile.


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## ClubMan (15 Jan 2008)

Marg said:


> dmittedly I have moved mortgages three times in eight years to avail of better offers and it's always been worthwhile.


Fair play to you. A lesson to all those people who are too indolent to bother. Have you ever estimated the savings made by switching?


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## Butter (15 Jan 2008)

This is not exact but I did a rough calcuation and I reckon it is in the region of €8000 in total.  That's infinitely better in my pocket than in the profitability statement of  a bank.  The cost of legal fees has been fairly low as one switch was to Ulster Bank which didn't involve a solicitor and another switch was to NIB who gave me a €1000 cashback for legal fees.  I would imagine I am the kind of customer though that banks hate.  I think in the U.K the term used is a rate tart!


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## ClubMan (15 Jan 2008)

Nice one. Well done. You tart!


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## Butter (15 Jan 2008)

There are worse things to be called!


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## Fauve (15 Jan 2008)

Hi all
Thanks so much for all thoughts on this.
I am very caught for time now, so this is a quick reply.
We are going to go through all this again and make final decision.
We are on a tight budget alright, in the sense that, living on one wage (by choice)we are just getting into a position to be able to save more than we are and if we can save a few Euros by doing this then maybe it is worth it.
Also if PTSB hike the rate in the year ahead, in view of the fact that there will not be an increase in salary incoming this year (despite everything else rising!) it means we could be ending the year tighter than we started it.
This I want to avoid.
Marg thanks so much for that feedback on NIB, I admire your tartiness (smiley ).
I might borrow some for myself.
Can I just ask re NIB, do they take tax relief at source on the monthly payment or how is it done with them. (With our ptsb mtg they take it from the montly payment before direct debit.  Again this makes the amount easier on the eye and monthly pocket).
Re salary, the rep didn't say we had to have it going into the nib ac but this was suggested strongly, "we would like to see the salary going in..." etc.
€1000 cashback sounds lovely, I think they must have changed that since?  She told us it would be roughly €600 refund on solr fees.
Also, are you tied in for the duration of the mortgage?  No more switching allowed for you or did I misunderstand that part (can't rem if I read it or she said it)?
We will not be moving house, and we are not looking for a top up.
If anything we would look to reduce the term but that would really stretch us so unless Lotto smiles on us this weekend, that won't be happening either.

Finally, I will get onto Irish Life re mortgage protection life assurance, I asked about this previously but will be more clear this time, just to be sure.
And can shop around also.

Thanks again for all replies and thoughts on this.  
I shall feedback in due course the outcome of deliberations.
Fauve


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## ClubMan (15 Jan 2008)

Fauve said:


> Can I just ask re NIB, do they take tax relief at source on the monthly payment or how is it done with them. (With our ptsb mtg they take it from the montly payment before direct debit.  Again this makes the amount easier on the eye and monthly pocket).


*All *lenders grant owner occupier mortgage interest tax relief at source once you have claimed it from _Revenue_.


> Re salary, the rep didn't say we had to have it going into the nib ac but this was suggested strongly, "we would like to see the salary going in..." etc.


I didn't think that they could insist (e.g. financial product bundling is supposed to be illegal isn't it?)? But then again there are other examples of having to have an account with an institution in order to avail of some other product...


> €1000 cashback sounds lovely, I think they must have changed that since?  She told us it would be roughly €600 refund on solr fees.


Haggle!!


> Also, are you tied in for the duration of the mortgage?  No more switching allowed for you or did I misunderstand that part (can't rem if I read it or she said it)?


Where lenders give cash back or subsidise/subsume remortgaging legal costs they may have a clause in the loan agreement requiring you to pay some or all of it back if you move from them within some period of time (e.g. 5 years).


> Finally, I will get onto Irish Life re mortgage protection life assurance, I asked about this previously but will be more clear this time, just to be sure.
> And can shop around also.


Definitely shop around for yourself or via a broker rather than expecting the lender to get you a good deal.

Good luck.


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## notsosmart (15 Jan 2008)

On a somewhat similar note - I'm on the AIB Tracker rate mortgage ( don't know rate right now ) but am thinking it's probably worth my while shopping around for a Switch about not. 

Mortage has 22 years left. Took a 25 year mortgage at 230k but don't know exactly how much is left. Property is probably valued at 300k right now. Any advice on who might provide me with the best savings? My repayments are about €1390 per month at present. 

Apologies if this kind of question has been posed already. 

Cheers lads.


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## ClubMan (15 Jan 2008)

What rate are you on? Check the rates table in the Thursday's _Irish Times _property section etc. to see what's on offer. Check the _Financial Best Buys _forum but I'm not sure if the mortgage rates listed there are up to date?


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## Fauve (15 Jan 2008)

Hi Clubman, thanks for those nuggets of wisdom.
I shall try haggling if we proceed, though it was never my forte and the hub is worse!  
Anyway, re trs and please forgive me, this may be my stupidest moment yet on Askaboumoney...but I thought I read in a thread here a while ago that some trs is not taken before the mortgage repayment is debited from personal account.
I know all lenders grant it once it is claimed (we spent the first three yrs of this mortgage not claiming it!). I _thought_ I read somewhere here that some financial institutions don't take it but put it into your ac at yr end or month end or some such thing?
Tax relief at source means tax relief is taken at source (ie financial institution?). Is this correct?

Ok, I have to sleep and dream about mortgages now.
Thanks again all.


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## ClubMan (15 Jan 2008)

Fauve said:


> Anyway, re trs and please forgive me, this may be my stupidest moment yet on Askaboumoney...but I thought I read in a thread here a while ago that some trs is not taken before the mortgage repayment is debited from personal account.
> I know all lenders grant it once it is claimed (we spent the first three yrs of this mortgage not claiming it!). I _thought_ I read somewhere here that some financial institutions don't take it but put it into your ac at yr end or month end or some such thing?


OK - I get you now (and you're not being stupid - maybe I am). I'm not sure if different lenders do it differently. I assumed that all did it monthly and just collected a direct debit net of the relief. But probably best to check with any specific lender - e.g. check the terms & conditions of the loan agreement or ask them.


> Tax relief at source means tax relief is taken at source (ie financial institution?). Is this correct?


Yes - except that the relief is *given *at source.


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## 60watt (15 Jan 2008)

Hi Fauve,
I switched to NIB tracker at 4.5% last year and I am making a savings of approx €28 per month.
I cant advise you what to do but here is my experience of NIB LTV tracker

1. You dont need to have your salary paid into the NIB Easy current account.
    At the moment I transfer money to this account online every month from my PTSB current account (just enough to cover the mortgage).
Also there are no charges on the NIB  Easy current account

2. NIB credit the TRS to my Easy current account on the same day as the mortgage is debited from my Easy current account.

3. I really like the NIB online banking. You can see what date your next payment is due, you see a full statement of all your payments and interest.

4. I strongly disagree with you statement that the NIB legal team are very very slow. I used them and they were very very efficent. Well worth not having to pay my own solicitor. And if you chose to use your own solicitor NIB will contribute €600

5. I remember asking my NIB rep at least twice if I was tied in for any period and he said no . I must double check what it says in the contract.

6. You don't have to change life assurance policy, if you are happy with your existing policy you just have to call your policy provider and ask them to note the interest of NIB on your policy. Having said that I did change my life assurance policy simply because I could get a better deal by shopping around.


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## ClubMan (15 Jan 2008)

60watt said:


> 2. NIB credit the TRS to my Easy current account on the same day as the mortgage is debited from my Easy current account.


Do they charge your mortgage repayment by _DD _gross and then refund the tax relief or just charge the repayment net of relief? What do other lenders do does anybody know? My most recent mortgage repayment predated tax relief at source!


> 4. I strongly disagree with you statement that the NIB legal team are very very slow.


I thought that it was the _NIB _sales person who said this!?


> 5. I remember asking my NIB rep at least twice if I was tied in for any period and he said no . I must double check what it says in the contract.


Get answers to questions like this in writing and also check the terms & conditions of any agreement before signing it!


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## 60watt (15 Jan 2008)

NIB charge the mortgage repayment by _DD _gross and then refund the tax relief. My previous lender BOI did it the exact same way.

Sorry yes it was the NIB sales person that said this, but like I said they were very very efficient for me.


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## ClubMan (15 Jan 2008)

OK - thanks for the clarification on the _TRS _mechanics.


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## Guest121 (16 Jan 2008)

Fauve said:


> Hi
> Please bear with me, I need help from those in the know.
> Our situation is this;
> Fixed rate (PTSB) ended in Dec, and now at 4.8%.
> ...


 
All that hassle for €16 a month???

No thanks...


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## Butter (16 Jan 2008)

NIB refund the TRS into my bank account after the mortgage payment comes out but it means that they take the full amount out of the account first.  Maybe not the best way of doing for you it if you need the money in your hand every month. I've let my TRS refunds build up in that a/c over the last two years which will take some of the sting out of the increase in payments when I come off the fixed rate next month. Fingers crossed that there won't be any more increases in rates.

NIB must have changed their policy on legal fee refunds.  Still it might be worth considering using their solicitor for the transaction rather than paying out separately for your own and claiming the €600 from NIB.  
As I said we don't use the NIB a/c as our main current a/c and there has never been an issue with that.  

There was no tie-in period when I switched but make sure you read the small print on your offer to make sure that they haven't changed that.  Having said that I have heard of up to 5-year tie-ins with some mortgage products but I have never heard of anyone tied in for the entire duration of a 20 or 25 year mortgage


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## ClubMan (16 Jan 2008)

Marg said:


> I've let my TRS refunds build up in that a/c over the last two years which will take some of the sting out of the increase in payments when I come off the fixed rate next month.


Would you not be better off paying the TRS refunds off the capital immediately as part of an accelerated capital repayment strategy? If you do this then agree it with the lender first and don't just lodge additional amounts to the mortgage account unilaterally and without specifying that you want them paid off the capital.


> There was no tie-in period when I switched but make sure you read the small print on your offer to make sure that they haven't changed that.  Having said that I have heard of up to 5-year tie-ins with some mortgage products but I have never heard of anyone tied in for the entire duration of a 20 or 25 year mortgage


5 years is max that I've heard. Other than very long term fixed rates I've never heard of longer lock ins or penalties for moving before some period is up.


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## floydmuppet (16 Jan 2008)

Hi Fauve,
I found myself in the same situation, in that I have been looking at switching my mortgage from ptsb to n.i.b and was interested in your experience .From a previous post on this site, I learned and done the following .Telephone your branch and ask to speak to someone in retentions.tell them your situation in that you are switching to N.I.B and can they match the rate as things are tight etc.I saved 130euro per month.They rang me back with an offer which I refused they rang back about two hours later with a lot better offer.So maybe you could try.I got 4.75%.Not to bad for one call.


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## irishpancake (16 Jan 2008)

bobbysands81 said:


> All that hassle for €16 a month???
> 
> No thanks...



So what's wrong with you having €16 p/mth available to save for 17 years 

At current regular saver rates, say 7.22% AER, with FA: €6449.94 

Even at ECB matching rate regular saver, say 4.3%: €4834.13

see 

Obviously these rates would vary over the years, but I certainly think it is worth the hassle. 

Whatever the OP would hope to do with the savings achievable, it is better to have the choice and money in your hands than the Banks take it from you.

Imagine the effect this has when multiplied by the hundreds of thousands paying over the odds for their mortgages. 

No wonder Irish Banks are laughing all the way to the Bank


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## Butter (17 Jan 2008)

ClubMan said:


> Would you not be better off paying the TRS refunds off the capital immediately as part of an accelerated capital repayment strategy? If you do this then agree it with the lender first and don't just lodge additional amounts to the mortgage account unilaterally and without specifying that you want them paid off the capital.


 
In the longterm I know I would be better off just paying it off the capital.  However we are on a fixed rate which doesn't allow us to pay off extra capital at the moment.  That will end next month though and I'll have to have think about the best option.  
My other consideration at the moment is that we are paying full-time childcare costs for two children which eats big-time into our income. I have left that money there to use to cover the increase in our payments next month when we come off the fixed rate so we don't feel the pain quite so much.  Probably not the best use of €2500 I know - it should be earning a bit more interest than it is.  I kinda like the comfort factor though.


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## ClubMan (17 Jan 2008)

Fair enough. Just a suggestion and everybody's individual needs are different.


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## Carmel (17 Jan 2008)

Hi
Coming to this thread a bit late, but switched to NIB last year, so here are my comments.

1. We used the NIB solicitors, so our only cost in switching was €130, the cost of the valuation. A bit slow, but it got done, took away hassle of dealing with another solicitor as far as I was concerned.

2. I too was told that I would have to get a new life policy. I went with LA brokers and they have an offer where you get a huge (forget the detail) discount on the first year of a policy. So while it involved a bit of admin., I saved money on that years payment. 

3. We are on a tracker of ECB plus 0.5%. I don't know if they are still offering that? If so, they can't put up the rate unless the ECB changes.

4. I was offered ATM cards etc. with the NIB current account, but just told them clearly that if I didn't have to, I wouldn't be paying my salary into it etc.  and would just use it or feeding the mortgage. They accepted that. So I have set up a standing order every month from my BOI current account into the NIB one.  Like the other poster, I have been letting the monthly TRS refund build up in that current account. Haven't decided what to do with it yet.

5. I find the NIB on-line banking easy to use. 

6. I think the NIB staff are obliged to also offer you house insurance and life insurance quotations when you are going through the mortgage application stuff.  I was quite clear with the girl I dealt with that I would only be taking the mortgage and she accepted that. So you can listen to the sales pitch, but just say no thanks.

7. We have put extra lump sum payments into the mortgage, NIB staff facilitate with that, no problems there.

8. I asked the girl we dealt with if there was any clause regarding pay-back of the legal fees if we decided to switch again and she said no. She also told me that we weren't bound to stay with NIB for any length of time.

Overall, if you own bank won't match the NIB rate, I would switch.

C


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## Fauve (17 Jan 2008)

Hi everyone.

Thanks so much for further replies and experiences with this issue.
I think we are more or less decided to go for it, and I need to have a weekend (of kid free time) to go through it all again to make sure we have it all clear, not missing anything.

Bobbysands81, thanks for your thoughts, I suspect we live in different worlds.
As was mentioned, thank you irishpancake, it is money that I could put to work elsewhere, that we really need at the moment.

Marg and Carmel thanks for sharing your experiences, I like the idea of TRS building up, would be nice and handy alright.
Just had a reread of leaflets etc from NIB and they do state that salary does NOT have to be paid into ac, and it can just be used to feed mtg account, no problem.  Also that the mtg is reviewed every three years, so no tie ins as such.  I actually don't know where we got this from in the first place.

Floydmuppet, I did what you did to no avail, still stinging from the nonchalance at other end of the line with PTSB to be honest.  Maybe I was non committal in saying we were switching at the time?  

On the Mtg protection life ins, I am already getting good enough quotes for that, so all is in favour there.

Thanks again everyone for helpful advice on this, it has allowed me to totally rethink our situation.
Fauve


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## din0saur (8 Feb 2008)

Fauve said:


> On the Mtg protection life ins, I am already getting good enough quotes for that, so all is in favour there.



Why you need to change your insurance policy if you are not increasing the mortgage? If you are on a good deal then you should keep that policy in place and simply change the interested party on the policy...


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