# Should I switch to a new mortgage lender?



## windo77 (12 Aug 2007)

I am into my third year of paying a mortgage with PTSB over a 25-year term. The balance is about 138 K. At the moment, I am on a fixed-rate interest and my mortage repayments are currently 752 Euro. The fixed-rate interest period is due to end this month and if I accept PTSB's offer of switching to a tracker interest rate (4.75%), repayments will rise to 843 Euro per month.

I have shopped around and EBS have made me an offer of a tracker mortgage at 4.75% over 29 years (repayments would be 731 Euro per month).

My intitial reaction was "EBS's offer is crazy because I don't want to increase the period over which I am paying back the mortgage." Karl Jeacle's mortgage calculator (http://www.jeacle.ie/mortgage/ie/) confirms that I would pay more in interest.

However, I am now thinking that if I pay off the mortgage in, for example, 10 years (I calculate that I could afford to make overpayments of 1500 Euro per month), maybe I will save money if I go with EBS because in that 10 years, I will have been making lower monthly repayments.

I say *maybe* because I am not sure if I am correct.

Thanks for any help you can give me.

p.s. I realise that Karl Jeacle's website should be able to give me a definitive answer to this question but I am having difficulty in getting the website calculator to take into account the extra payments that I wish to make.

When I tell the calculator that I wish to make an exta payment of 1500 Euro per month starting in September 2007 until the mortgage is payed off, the extra payments value in the Summary box is not updated. So, if can tell me where I am going wrong, I would be extremely grateful.


----------



## pinkyBear (12 Aug 2007)

Hi there,
We are currently switching from EBS, their offer is not great as you adding 4 years on to the life of your mortgage. If I were you I would speak to a good broker. There are better deals out there. NIB are not covered by a broker and their rate is by far the best value 0.5% above ECB rates...


----------



## irishlinks (12 Aug 2007)

Why move to a new lender for the same rate ?? You may have valuation and legal fees to pay too? If you plan to overpay - then why not just do that with your current lender - I am sure they will let you.


----------



## irishlinks (12 Aug 2007)

I just thought some more about your question - and did some calculations.
You have 22 yrs left on the PTSB mortgage. The new EBS mortgage is for 29 years. The payments are 841 and 743 amonth respectively.
On both these mortgages - if you overpayed 1000 a month you would finish the PTSB one in 7.4 years having paid a total of 163988. The EBS one would be paid up in 8 years - after paying a total of 166136. This is 4000 more than the PTSB one. (Calc assumes same rate of course for the term of the mortgage) So ataying with PTSB would be the best of these 3 options - but it surprised me that it was fairly close.
Of course - the best option for you may be to try NIB who have rates as low as 4.5 depending on your LTV. 
I used http://www.channel4.com/money/homebuying/overpaycalc.html to calculate these figures.


----------



## windo77 (12 Aug 2007)

Thanks, these are the kind of calculations I need to do before I make a decision.

I'll talk to NIB.


----------



## Banking2006 (12 Aug 2007)

If your current rate is lower than 4.5% you should stay- if not move to get this best rate!


----------



## windo77 (26 Aug 2007)

Thanks for your replies, folks. And apologies for taking so long to get back to you.

Another factor that I wish to take into account is the ease / difficulty in making overpayments.

Other AAM threads indicate that it is easy with EBS to make overpayments to reduce the term of the mortgage (as I wish to do) but that with PTSB and BoI, it is not so easy.

My own experiuence with PTSB this week was that the customer service reps at the PTSB Mortgage Service Department gave me conflicting information regarding the procedure involved.

Can anyone tell me what their experience is of other mortgage lenders when attempting to make overpayments to reduce the term of the mortgage.

Thanks.


----------

