# Best Buy for <50% LTV mortgages i.e. the lowest mortgage rates available



## Brendan Burgess (6 Nov 2017)

Updated 26th July 2018 for KBC cuts which apply from 3rd September 






*Best buy for First Time Buyers or new customers *






In my opinion, Ulster Bank is a clear best buy.

The rates are low 

They have led the field in cutting rates 

They have led the field in committing to offering existing customers the same deals as those on offer to new customers 

If you default to variable rate after after the fixed rate ends, it won't be as high as Bank of Ireland's rate
The main decision is whether to go for the two year fix at 2.3% or the 4 year fix at 2.6%. It's a very close decision and neither will be far wrong.  My gut feeling is that the 2.3% is better as rates may well fall again and it would probably be cheaper to get out of a 2 year deal than a 4 year deal. (If you are borrowing more than €500,000 Ulster Bank has a rate of 2.5% fixed for 5 years.)

*Best buy for switchers *







*Default variable rates after the fixed rate expires*




*Permanent tsb *




permanent tsb is not recommended as it has very high rates for existing customers.  Although Bank of Ireland has very high variable rates for existing customers, the fixed rates are attractive. After you fixed rate period with permanent tsb expires, the only option will be to switch lenders, which most people won’t get around to doing.


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## Brendan Burgess (26 Jul 2018)

I have updated the Key Post for the KBC cuts.

I have also prepared the following new tables.  I got a  bit befuddled preparing them, so I would appreciate if someone checks my arithmetic (and conclusions.)

Thanks


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## Foobar (26 Jul 2018)

Hi @Brendan Burgess I think you should state the term of the loan used for the calculations. Baring in mind that a 35 year term is typically only available for FTBs, so maybe you could use 30 years as the term for both. 

Regarding the Best Buy for switchers on a 300k mortgage, how did you arrive at the interest amount of 27k for BOI/EBS @ 3%? Over 3 years based on a 30-year term, I got 26,165.72 (using Karl's Mortgage Calculator). With a 35 year term, I still got less than 27k over the three years. I am sensing maybe a rounding error?

Anyway, using the same method as I used for the above, KBC @2.55% / 30 year term, the interest over three years came to 22,187.85. Less the 3k cashback, this works out at 19,187.85, much less than BOI/EBS and roughly the same as Ulster.

I could be wrong though.


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## Brendan Burgess (26 Jul 2018)

Hi Foobar 

Interesting point. I took a simplified approach. For example: 

for switchers on a 300k mortgage, how did you arrive at the interest amount of 27k for BOI/EBS @ 3%?

€300k @3% a year = €9,000 per year or €27,000 over three years. 

It's not absolutely correct, as the capital repayments will reduce the amount of interest paid. However, as it applies for all lenders, the comparison is still valid. 

Brendan


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## Brendan Burgess (26 Jul 2018)

Foobar said:


> Anyway, using the same method as I used for the above, KBC @2.55% / 30 year term, the interest over three years came to 22,187.85. Less the 3k cashback, this works out at 19,187.85, much less than BOI/EBS and roughly the same as Ulster.
> 
> I could be wrong though.



Foobar, you could be wrong, but you are not. I was wrong.

I have now replaced BoI/EBS with KBC for a switcher of a €300k mortgage. 

Thanks for that. 

Brendan


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## Foobar (26 Jul 2018)

Brendan Burgess said:


> It's not absolutely correct, as the capital repayments will reduce the amount of interest paid. However, as it applies for all lenders, the comparison is still valid.


That is fair enough. I suppose it is simple and consistent. Thanks for clarifying.


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## Foobar (26 Jul 2018)

Brendan Burgess said:


> Foobar, you could be wrong, but you are not. I was wrong.
> 
> I have now replaced BoI/EBS with KBC for a switcher of a €300k mortgage.
> 
> ...




The new KBC 5 year rate @ 2.6% poses an interesting question between it an UB. If one were looking for a fixed rate of 4+ years, then KBC with the enhanced cashback would trump the UB rate (excluding BOI for this comparison). But what is the cost for a switcher of 300k mortgage taking the 5 year rate from KBC vs taking 2 year rate from Ulster, over the first 2 years?

Total interest paid on 300k over first 2 years, less cashback offers.

KBC @ 2.6%: 15,600 - 3000 = 12,600
UB @ 2.3%: 13,800 - 1500 = 12,300


You would pay just ~ 300 extra with KBC to have the security of 3 more years at 2.6%. A great deal, unless you are adamant that rates will continue to drop.


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## Paul F (19 Mar 2019)

I know I'm resurrecting a slightly old thread but it is worth noting that, for fixed-rate mortgages:

KBC allows you to overpay up to 10% of the outstanding balance just once over the lifetime of the fixed rate. E.g., if you fixed for five years, you could overpay 2% each year for five years. Or you could overpay 10% in the first year but then you couldn't make overpayments for the next four years.

Ulster Bank allows you to overpay up to 10% of the outstanding balance _each year_ (not just once).
This may be a consideration for some people.


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## EmmDee (20 Aug 2019)

Brendan,

BoI have an option of 2.5% 5 year fixed with no cashback - only available for mortgages >€400k.

I'm not sure if there is an overpayment option (I'll be checking) - there is with their other fixed rates. I'll have to look to see at what level the "lower rate vs the cashback option" makes sense






						High Value Mortgage Fixed Interest Rate - Bank of Ireland
					

Are you borrowing €250,000 or more for your homeowner mortgage? If so, you can choose our High Value Mortgage fixed interest rate.




					personalbanking.bankofireland.com


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## Brendan Burgess (20 Aug 2019)

Hi EmmDee
This rate makes no sense. You are always better going for the cash back. 

Brendan


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## EmmDee (20 Aug 2019)

Brendan Burgess said:


> Hi EmmDee
> This rate makes no sense. You are always better going for the cash back.
> 
> Brendan



I presume you are looking at it as : 0.5% reduction x 5 years = 2.5% (vs 3% cashback). And even then the 0.5% is on a reducing capital amount

That's what I was thinking. But will see if the numbers are different in real life. They claim it is because of demand but I'm unconvinced


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## Edward33 (1 Dec 2019)

Brendan Burgess said:


> Updated 26th July 2018 for KBC cuts which apply from 3rd September
> 
> View attachment 2956
> 
> ...


This is not easy to understand. Ptsb is the most attractive in my opinion. They give 2% cashback and 2% monthly. At the end of the 3 year fixed term is it not very easy to refix with PTSB or switch bank as a second option. It is just a bit of paperwork. Or is your comments based on experience of seeing people being too lazy to switch and do the bit of paperwork?


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## Brendan Burgess (1 Dec 2019)

Hi Ed

This thread has now been replaced by these two 

Best buy mortgage for a First Time Buyer 






						Key Post - Best Buy mortgage for a switcher
					

This is the first draft of this post. I welcome comments - especially from people who use it to switch. Do you find it helpful? Do you disagree with the conclusions? Am I leaving out some other factors? Brendan  There is a bewildering array of products so I am going to pick a couple of products...



					www.askaboutmoney.com
				





But to address your question, I do say in the first post 
_
permanent tsb is not recommended as it has very high rates for existing customers. Although Bank of Ireland has very high variable rates for existing customers, the fixed rates are attractive. After you fixed rate period with permanent tsb expires, the only option will be to switch lenders, which most people won’t get around to doing. _

But since then I have posted this 






						Key Post - How overpaying a ptsb mortgage works
					

I was vaguely aware of this but it was brought to my attention this morning by someone who is choosing ptsb because of this facility.  https://www.permanenttsb.ie/globalassets/pdf-documents/mortgages/mortgage-arrears/bmk3625..-flexible-mortgage-options-aug-19..-1.05mb.pdf    In simple terms, if...



					www.askaboutmoney.com


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## Edward33 (1 Dec 2019)

Brendan Burgess said:


> Hi Ed
> 
> This thread has now been replaced by these two
> 
> ...


Thanks Brendan, this makes more sense now. It is not attractive due to the variable rate you will roll onto. 

However In this example if i have a 80% LTV and I am borrowing €470,00 then the cashback is significant at €9,500 circa. I have two options at the end and that is to (a) stay with PTSB and go back onto a new fixed term which I would do 4 months before the end of my first fixed term as I would not be so stupid or lazy to let me take a, 4.5% variable rate with them or (b) change bank with no difficulty at all it is just payslips and statements and a salary cert. So I'm saying either way I will take the cashback and never be on that terrible variable rate with PTSB. Is there any scenario you can think of where I will end up on that variable rate that I could be unnawarw of except for me just being lazy?


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## Brendan Burgess (1 Dec 2019)

Edward33 said:


> . I have two options at the end



It's probably better for you to study the post in the thread to which I linked and you will see your answers there.

Brendan


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