I just rechecked on Karl's Mortgage Calculator & a mortgage of €280k (IE a UB overpayment of €15k from €295k) at 1.95% over 24 years would give a €1218 monthly . How did you calculate €1261?
I misunderstood this part of your post from Monday. What I was saying is that a €15k overpayment would reduce your
Ulster Bank monthly repayment to about €1,261. You were saying that the same overpayment followed by switching to Avant's 1.95% rate would reduce your
Avant monthly repayment to about €1,216. Both calculations are correct.
Would you mind sharing the calculation behind the €2650 figure?
This was a comparison over 7 years of Avant's 1.95% rate versus
Avant's 2.1% rate – AIB and cashback doesn't come into the comparison. I simply estimated the difference in interest paid under the two rates. That's 0.15% of €280k over 7 years, or €280k * 0.15/100 * 7 = €2,940, but reduce that a bit because the balance (and the interest paid) will be reducing with time. Hence the €2,650 saving over 7 years if you go for the 1.95% rate instead of Avant's 2.1% rate.
I guess the risk here is that AIB could change their method of breakage calculation at any time in the future?
They could but the changed terms would only apply to customers who take out an AIB mortgage
after that change. The use of the two calculation methods (and choosing the one that is more favourable to you) would be written into your mortgage contract if you switch now or soon, and they couldn't take that away from you. (At least, it appears to me to be part of the mortgage contract. I'd be interested to know if others agree or disagree.)
Related, unless Avant leave the Irish market I imagine most people would expect Avant to remain more competitive on rates alone than AIB if not the most competitive in the market, as they currently are, right?
You can see from my first calculation (from yesterday) that AIB
are competitive with Avant for your particular case over a 5-year time horizon. That's because of the AIB cashback, you are eligible for their green mortgage, you have a low LTV and your balance isn't huge.
Related, unless Avant leave the Irish market I imagine most people would expect Avant to remain more competitive on rates alone than AIB if not the most competitive in the market, as they currently are, right?
In
this post,
@letitroll says that Avant might not be in Ireland for the long term. Of course, nobody knows for sure but it's interesting.
Further it seems in the short term that if rates move that they would more likely go up rather than down. As such the likelihood of having an opportunity to break & move to a lower AIB rate is lessoned, in the short term.
Your observation is correct, but it assumes that interest rates go up. It's possible that the current higher inflation is temporary and will subside, keeping rates low. Again, who knows?
As for ICS, are there any other benefits to ICS over Avant other than the 20% Vs 10% overpayment facility? For example have ICS customers had the same level of difficulty corresponding with the ICS as Avant customers have?
I don't know much about ICS but
this post by
@pguyo says he confirmed with ICS that their 1.95% rate is not available to existing customers. This suggests that they discriminate against existing customers (like PTSB), which could mean that you would have to switch away from them again in a few years to maintain a low rate.