Are BOI fixed rates still best value?

T

toby2111

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Just waiting to hear from BOI for mortgage approval. We applied directly with them based on advice on the Best Buy post on this forum. They're giving us an exception of 89.4% as we're STB. Their fixed rates seem the best around plus the cashback would be handy. Should we use a broker also to apply to more bank's?
 
Yes, pretty much the best you'll get at >80% LTV. I'd only look elsewhere if I wanted to fix longer for certainty. The 10 year KBC rate is attractive, but no cashback on new lending.

PTSB has been the only change not reflected in the table in best buys, but they're still not close.
 

Is it only on the 10 year fixed rate that they don't offer the 3K cashback?
 
toby2111 said:
Is there any other bank with better variable rates?
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They all have better variable rates!
As in better than BoI variable. But they're all above 3% for your LTV.
I'd expect AIB to bring down their variable rates for high LTV soon to compete with the fixed offers from others, but no guarantee of that happening.
 
So would best option for me be -
Fix with BOI for 2,3 or maybe 5 years at 3%?
Would there be much of a breakage fee if I wanted to switch in the future?
 
Before you answer that question @toby2111 ask yourself when are you likely to be LTV<80% to genuinely facilitate a switch to another lender. If that’s 3 years, I would fix for 3. If it’s 5 years I would fix for 5
The chances of you switching before before your LTV is below 80% is slim if you are being honest with yourself
 
But how could I predict when my LTV will be <80%? At a rough guess it would be longer than 5 years. But I'm certainly no expert hence why I'm looking for advice.
 
look at an online mortgage calculator and see based on the duration of the mortgage

Assuming a 25 year mortgage and 3% I would expect you to be under 80% in 4 years, if prices remain constant.
BOI allow you overpay by 10% - if you done that I would expect you to be under 80% in 3 years.

If prices change, then it could be quicker or longer.
 
Thanks for that.
If I went for a 5 year fixed with BOI and they then dropped their fixed rates to 2.5% or lower within that 5 year period(unlikely as that may be),would I have to pay a big breakage fee if I wanted to avail of their new fixed rate?
 
toby2111 said:
would I have to pay a big breakage fee if I wanted to avail of their new fixed rate?
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There is a thread on here which goes into the detail of how the break fees are calculated.
The lay man's version of this thread is it depends on the inter bank lending rates, and the lending rate the bank would have secured the 3% rate on, versus the new inter bank lending rate for the new 2.5% rate. The inter bank lending rates are very low currently.

So if the new low rate is a result of a further drop in the inter bank lending rate, then its likely you would have to pay a break fee
If the new low rate is as a result of competitive pressures such as a new entrant entering the market and the inter bank lending rates remaining consistent, then its likely a small or no break fee would apply

However, if you genuinely feel that interest rates are likely to drop, then you should look to stay variable or minimise your fixing period. If you feel interest rates are likely to rise, then you should be extending your fixing period.

I would advise any customer who is fixing with any bank to clearly understand what rate they will roll onto on expiry, and question any ambiguity in the language. For example if you expect to roll onto a LTV rate, is it the LTV on drawdown/fixing date or on expiry of the fixing period.


On a separate note, in 2013 I came out of a fixed rate with BOI and was sent the various options. One of these was a 10 year fixed rate @ 6.19%. This same rate is now available with KBC for 2.95%. You need to be very cautious around how long you are willing to fix for, and its not always a rate thing but also a security element to it.
 
Thanks again.
One final question - are those fixed rates with BOI for new business only? Or can I avail of them again once my fixed rate ends?
 
toby2111 said:
are those fixed rates with BOI for new business only? Or can I avail of them again once my fixed rate ends?
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Bank of Ireland current policy is for all customers to fix their mortgages - and their variable rates are not at all competitive. There is little reason why anyone should be on a variable rate with BOI
So at the moment, fixed rates are available to both new and existing customers - although I am not sure if they are the same rate. The way they differentiate the two at the moment (in general) is the cashback offer to new customers
There is no guarantee that policy/practice will continue, so you need to be clear when signing the fixing and you can ask them to include "new business fixed rates" - whether they do or not is a different story, but you can always ask.

Check their current rates on their website for a comparison
 
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