Tracker mover mortgage offer from BOI

W

Wanttotradeup

Registered User
Messages
6
My husband and I currently have a mortgage with Bank of Ireland. The mortgage has c.€300,000 and 27 years remaining on it. We are currently on a tracker rate of 1.15%. Our house would be valued at c.€250,000. We have a growing family and would love to trade up. We have a deposit of €75,000 and would be looking to purchase something in the region of €375k. Ideally we would love to hold onto our current property as an investment but the bank won't consider this. We both have permanent jobs earning €90-€100k between us. We have no loans and an excellent credit history. If we were to take up the current offer available from BOI by selling our house and move our tracker to a new house the rate would revert to standard bank rates after five years. I estimate that this would cost us approx €130k over the remainder of the mortgage. As some of the other banks are offering for trackers to move, albeit at an additional 1% margin, for the full term of the mortgage, we are wondering whether BOI will follow suit at any stage, i.e. remove the 5 year clause? Or would they approve this on an individual case? They would still stand to gain based on an additional 1% from us and on the excess, probably €50k at the SVR. We really do want to trade up but would find it extremely difficult giving up our tracker after 5 years. Has anyone any experience of this or similar dealings with BOI
 
in similar boat, all they offered was the +1% for 5 years... If you are successful in negotiating anything better than their standard offer, I'd love to hear about it!!
 
I see no reason why you can't hold on to your current property as an investment property and apply for a mortgage on a new property with another lender. If you purchase a new property for 375k you can borrow 80% = 300k and you have the 75k deposit. Plenty of people are trading up and retaining their existing properties and renting out and there are no problems in getting a mortgage once you qualify. Based on the info you have given you should qualify however it will depend on your gross basic salaries, ages, how many dependents, how much rent you will get and if you have other borrowings.


Wanttotradeup said:
My husband and I currently have a mortgage with Bank of Ireland. The mortgage has c.€300,000 and 27 years remaining on it. We are currently on a tracker rate of 1.15%. Our house would be valued at c.€250,000. We have a growing family and would love to trade up. We have a deposit of €75,000 and would be looking to purchase something in the region of €375k. Ideally we would love to hold onto our current property as an investment but the bank won't consider this. We both have permanent jobs earning €90-€100k between us. We have no loans and an excellent credit history. If we were to take up the current offer available from BOI by selling our house and move our tracker to a new house the rate would revert to standard bank rates after five years. I estimate that this would cost us approx €130k over the remainder of the mortgage. As some of the other banks are offering for trackers to move, albeit at an additional 1% margin, for the full term of the mortgage, we are wondering whether BOI will follow suit at any stage, i.e. remove the 5 year clause? Or would they approve this on an individual case? They would still stand to gain based on an additional 1% from us and on the excess, probably €50k at the SVR. We really do want to trade up but would find it extremely difficult giving up our tracker after 5 years. Has anyone any experience of this or similar dealings with BOI
Click to expand...
 
Hi Spin
Thanks for your response. Holding onto the current property would be the preferred option. BOI advise that we would not qualify. However, I have done calculations that show it's affordable. We would not have an issue renting out the property and would expect to get €1,000 per month. I understand that this is taxable.

My initial conversations with BOI over the phone were that we would only be able to borrow 3.5 times our salary, I.e. the total loan value. With this option we would have combined loans of €600k. So according to their criteria we would need a combined gross salary of €171k to borrow €600k. Our basic gross salary is €100k. We also went to meet the bank manager and when he put the figures into their software package we were way outside the criteria but the disposable expenditure it was calculating appeared excessive. We have two dependants, no other loans and a very good credit history. It would be great if this was possible.

In relation to the potential rental income we would receive. Does anyone know if you can offset the capital allowances on the fixtures and fittings, mostly purchased eight years ago when the house was first bought?
 
Hi Wanttotradeup,
Bank of Ireland must want you to give up the tracker!!! or not they have totally different criteria to the other lenders. They all use calculators and I have input your details into two different lenders calculators and you qualify with both for 300k. I input your ages as 30.
 
I think you need a reality check here:

upload_2015-7-10_9-7-22.png

And you want to borrow another €300k?

This would be extremely risky. Interest rates will rise. House prices may fall, as well as rise. Your family circumstances may change. Your income may be reduced.

You have a great opportunity to port your mortgage to a new family home. Go for it.

It would be nice to have it for the full term of the mortgage, but the value of this is overstated by most people.

The size of the mortgage is higher in the first 5 years, so you have the reduction at the most important time.
Also, variable rates are excessive at the moment and so the gap between variable and trackers will be greatly reduced over the coming years.

If you trade up to a house for €375k your situation will look something like this:

upload_2015-7-10_9-14-29.png


You will spend the €25k net assets you have in selling costs, buying costs, moving costs and redecoration.

That's a mortgage of 3.5 times your income with no equity. You need to pay down this mortgage and build up equity as quickly as possible to give yourself some flexibility.

Brendan
 
Thanks for your response Brendan. I do see where you're coming from and it isn't a decision we would make lightly but we would like to consider all of our options. It would be great to know if it were possible and then we could make an informed decision.

Going back to my original post, do you feel that BOI will relax the 5 year clause anytime soon or even at all? I understand that we have seen the most of the benefit of the tracker in the eight years that we have had it but it still is very valuable to us and not something we feel we can part with lightly.
 
Wanttotradeup said:
do you feel that BOI will relax the 5 year clause anytime soon or even at all?
Click to expand...

I don't know but I don't think so. It has been reported that Ulster Bank will be abolishing their 5 year limit soon.

You should assume that they won't and plan accordingly. If they do abolish it, great.

Brendan
 
You must log in or register to reply here.
Back
Top