ok, just to update again,
-if you have a reduced payment (due to customer circumstance) on the above deal, the amount you pay also come off the mortgage with the higher interest rate (which will almost definitely be the newer mortage),
Now i need some advice (apologies if i should have started a new thread for this, but it's related to the above discussion: so here goes),
My situation is that,
-i have 74K approx left on the tracker, for 9 years left on term at ECB + 0.85%.
-i need to borrow an additional 91K to trade up (as already mentioned, have savings to offset the rest of the trade up cost)
-UB 's current “discounted variable” rate for an LTV of <75% is 3.95% (SVR-0.80%)
-initial monthly repayments (barring any rate changes) would equate to
735 on tracker (9 years)
475 on new mortgage (25 years term)
however this discounted variable is not guaranteed to remain discounted for any period of time, i.e. as far as I understand from UB it could be changed back to the SVR at any time (i.e. 4.75% at the moment which is one of the highest on the market)
as mentioned i went to AIB and the scenario with them is,
-clear the mortgage with UB
-take out new mortage with them at LTV < 50%, SVR APR 2.84%, 25 year term, for the entire 165K,
monthly repayments would be
768 approx (25 years),
All things being equal (both institutions pass on the same rate cuts/increases etc.), then UB would work on that little bit cheaper over the life of the mortgage.
But really the better mortgage offer will as always depend on what each institution does with interest rates over time,
-am I right in thinking that AIB (being 97% owned by the government) could be the better option here?, given that they will come under political pressure to pass on ECB rate cuts and keep their rates low during the foreseeable future?
-am I mad to think of giving up the UB tracker (based on the above), who are owned by RBS, so the Irish government will have very little/no impact on trying to protect mortgage owners with UB from rate hikes!
In essence this deal by UB (while welcome) seems to be a way of clawing back some of their losses on tracker mortgages and I am wary of offerings titled “discounted variables”, as I’m sure this discount will disappear at some stage..