AIB vs haven

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Miley07

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I'm looking to switch mortgage from KBC (rates for existing vs new customers is just annoying me too much). I have an excellent broker but I'm not sure if there is any future penalty I might pay by going with AIB directly or haven through the broker. I understand they are effectively all the one but is one viewed as a riskier bet to be sold off (and have worse rates) than the other? I know there is no way to predict but wondering is there is a general consensus...

Love to hear members thoughts?
 
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from my own experience, because they are broker led, haven can be a pain to deal with - might not be an issue if you're happy with your broker but frustrating if you just want to discuss options (once you are a customer). other than that i've not had any problems with them
 
Thanks - Actually speaking to my broker she tells me i can get the the UB loyalty rates.. 3.2% 3 yr fixed or 3.35% variable so it looks a no brainer to switch to UB.. Q now is much much lower than 3.2% fixed are we likely to see? Seems like variable might be the way to go but 3.2% is pretty good IMO
 
Miley07 said:
Thanks - Actually speaking to my broker she tells me i can get the the UB loyalty rates.. 3.2% 3 yr fixed or 3.35% variable so it looks a no brainer to switch to UB.. Q now is much much lower than 3.2% fixed are we likely to see? Seems like variable might be the way to go but 3.2% is pretty good IMO
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I'd advise that you take the variable rate. If you decide to pay back your mortgage early the banks are not allowed to charge you any penalties. The same is not true of fixed type. I'm getting a 30 year mortgage but paying it back as a 25 year. If things ever get tight I can switch back to the 30 year payments without having to renegotiate with the bank
 
The differential between fixed & variable is not due to banks taking a punt on future mortgage rates. The banks in question will purchase funds in the market at the available rate to match the amount/period of your requirement. The risk involved is that if you break the rate during the period the bank are still tied into the deal so a penalty will be applied to the bank and passed on to the customer for breaking the agreement.
If you are satisfied that you will not be repaying your mortgage in the 3 year period (probably unlikely that you will) then the only thing you need to consider is the probability of a change in variable rates during that period. I.e. by not fixing the rate you are effectively gambling that the UB variable rate will drop during the 3 year period. By fixing you can be sure that your rate/monthly payment will remain the same in that period.
 
44Brendan44 - I think you will find it difficult to actually establish that any ultimate parent banking entity do not purchase funds the way you describe though it is commonly believed. There are many elements to a banks funding and its starts at free funding (eg credit current account balances) almost zero deposit interest and so on - even the mortgage bonds - and they are generally euribor + and not fixed in the main.

And how then do you allocate - and its all a bit mysterious.

The fixed rate penalty is an opportunity cost and is real in the sense this income will disappear if you break out of it.

Its not a con-job per se, but when AIB Mortgage Bank 'hedge' their fixed rates - who is the counter-party?
And why would you pay away if you could allocate free funds to mortgages ?
 
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