3 years fixed term will finish in July. How to prepare for best deal?

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sabinalee

Registered User
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Good afternoon,

I'm reading and reading and I'm lost as I don't know really where to start in my case.

Currently me and my husband have 14 years left ( from 17 ) on a 3.20% fixed rate mortgage with BOI with €117,000 remaining on a house worth €165,000 We borrowed €140.000 in July 2017.
WE:
- do not overpay our mortgage.
- do not have much savings ( €5000)
- are 42 and 52 years of age. Only I contribute to pension, not from long ago ( €7000, I'm 42)
- Our income is €75.000 gross,

We took this mortgage as a last call, with savings we had that time and age limit of my husband. Looks like overall we are not in the worst position but not in the best, so I would ask you how at least mortgage could stay secured for another few years?

We are thinking rather to stay on fixed rate, as BOI variable rate we have on loan offer would be 4.45%...Plus I would really like to re-pay at least 10% each month.
What should I write to BOI to get extension with fixed and best possible rate? Are the banks even do that to their customers?

If BOI want offer any friendly rates, what would be next step? Will I pay a lot for re-mortgage?

Well, finishing my 4th day of 12 hour shift soon, but I hope I will get good advice from yous and a nice, safe break with my family.

All the best. Stay safe.
Sabina
 
You don't need to write to BoI, they will write to you a month or so before your term is up setting out the options on offer.

At the moment BoI are pretty uncompetitive so you can switch provider. Compare options here, it looks like the best deal on offer for you is KBC at 2.3% over two years. I am not sure if you can overpay with KBC though.



PS: are you sure you are not overpaying your mortgage at the moment? If the amounts and dates you've provided are right then you should have an outstanding balance of €122k, not €117k. That's a bigger difference than BoI's max 10% overpayment would get you though.
 
Yes, you should apply to switch to KBC. They will pay you €3,000 towards your legal costs and the rates are much lower.

If you want to overpay your mortgage, why not pay the €5,000 savings against your mortgage now and then build up this amount again from what the overpayments would have been?

sabinalee said:
What should I write to BOI to get extension with fixed and best possible rate?
Click to expand...

What do you mean by extension? That usually means extending the term which is not what you want to be doing.

Brendan
 
NoRegretsCoyote said:
PS: are you sure you are not overpaying your mortgage at the moment? If the amounts and dates you've provided are right then you should have an outstanding balance of €122k, not €117k. That's a bigger difference than BoI's max 10% overpayment would get you though.
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I was using some calculator. My mistake as I stated already August 20 date, which will be approximately 117.000 left to pay that time.
I will add up my mortgage account number to online banking so I could see exact I have less and less to pay.

KBC offer 2.3% to their existing customers and on the houses with 60-80 % LTV. I will read if I join them soon, will I be able to use their offer in July 20.

I will read on this forum how to start to apply for re-mortgage as I have no idea.

Should I wait till my BOI 3 years fixed term will about to finish to avoid penalties?

Thank you kindly for all advice.
 
Brendan Burgess said:
If you want to overpay your mortgage, why not pay the €5,000 savings against your mortgage now and then build up this amount again from what the overpayments would have.
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I can do that actually, but I think there will be some penalties if I do it over while I'm on fixed term. I'm not sure how much. Will check.

Brendan, so pay that €5,000 savings with BOI, wait till July when my 3 years with them will expire, and then switch to KBC or to any better rate provider?

Apologies, wrong word I used "extension".
I meant to continue pay our mortgage with BOI if their offer on fixed rate will be competitive enough.

I'm so glad I found you many, many years ago. Being non Irish, with small family here from 15 years I can always count on you.
Even I'm here only when I need advice I appreciate what your doing, you and others, like NorRegretsCoyote. There will be never enough thank you for your fantastic help.

Ps.
I forgot that BOI offered me 3% cashback. There is a remaining 1% so €1400 if I st stay with them exactly that 3 years.
I'm not sure it's worth it ...
 
You can talk to KBC already. July is not so far away and at that stage you can do what you like. Remember you have to switch you current account banking to them which can be a hassle. Bear in mind banks are extremely busy at the moment so maybe wait a few weeks before calling them up.

Personally I would hold on to the €5k savings. It's not a large buffer against a big expense in your life or a loss of income. The 'opportunity cost', what you lose from not using the €5k to pay off the mortgage, is only about €10 a month.
 
sabinalee said:
I can do that actually, but I think there will be some penalties if I do it over while I'm on fixed term. I'm not sure how much. Will check.
Click to expand...

I had meant to wait until July.

But, on reflection, the break fee on €5,000 will be less than what you save, so it's worth doing anyway.

Brendan
 
sabinalee said:
Ps.
I forgot that BOI offered me 3% cashback. There is a remaining 1% so €1400 if I st stay with them exactly that 3 years.
I'm not sure it's worth it ...
Click to expand...
Hi Sabina,
I'm pretty sure the extra 1% is only after 5 years? So you'd need to stay with them another 2?

So you're options are, BOI 2 year fixed @2.9%. get 1% back after 2 years, effectively you'd be paying 2.4%

Or switch and get a better rate.

As others have said, get the ball rolling now on switching. It takes a while to get approval, but once you have it, it'll be valid for 6 months so you can switch when ready.

Keep an open mind in options - if restrictions remain in place it could take a long time to arrange a switch.
 
As an alternative to changing to variable to facilitate overpaying why not reduce your mortgage term by a few years instead and fix at a low rate. This will allow you pay your mortgage off quicker at a competitive rate.
 
BigBoots82 said:
As an alternative to changing to variable to facilitate overpaying why not reduce your mortgage term by a few years instead and fix at a low rate. This will allow you pay your mortgage off quicker at a competitive rate.
Click to expand...

If your circumstances change it's much better to have flexibility of overpayment than rigidity of shorter term.
 
I’m in the middle of switching from BOI to KBC, if you’re thinking of doing it start getting your paperwork together. The 3k for switching to them is only on offer if you draw down the loan before the end of June. You’ll find if you ask the beak fee on current fixed rate with BOI it’s smaller than you think and will be covered by the switch offer.
 
We are in the middle of applying for a switcher with KBC also. Have started sending in the paperwork. They told me the cash back offer will only apply until June. Our fixed term is up the end of April so hoping once we have all the paperwork sent in it wont take long to sort. Altho now with everything who knows.
 
Cathbarr said:
We are in the middle of applying for a switcher with KBC also. Have started sending in the paperwork. They told me the cash back offer will only apply until June. Our fixed term is up the end of April so hoping once we have all the paperwork sent in it wont take long to sort. Altho now with everything who knows.
Click to expand...

I wouldn't worry too much about not getting the switch complete before June, for the last few years they've (all the banks offering cashback) kept extending the last drawdown date to avail of the deal shortly before it expires.
 
Coldwarrior said:
I wouldn't worry too much about not getting the switch complete before June, for the last few years they've (all the banks offering cashback) kept extending the last drawdown date to avail of the deal shortly before it expires.
Click to expand...

Ah hopefully well be all sorted by then anyway. I was hoping to have it all sorted before the end of May. We have sent in all the documents except an employee status form but hoping to have that early next week. I'm assuming we should know by the end of the week or early the following week if we have AIP. Ideally I'd like to get it sorted ASAP as we have been paying 4.85% on fixed mortgage and will move to 3.7% on 1st of May with current back so would like to move to 2.25%.as quick as possible. Fed up losing money to the bank!
 
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