BoI split mortgage warehoused rate - anybody get lower than 2.5%?
- Thread starter ClubMan
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Brendan Burgess
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Hi ClubMan
I don't think that they do warehouse anything at less than 2.5%.
In fact, I would say that you are lucky to get that rate. Most split mortgages from BoI charge the full rate.
Brendan
I don't think that they do warehouse anything at less than 2.5%.
In fact, I would say that you are lucky to get that rate. Most split mortgages from BoI charge the full rate.
Brendan
I guess not.
The offer is 60% at the applicable variable rate (4.25%*) and 40% warehoused at 2.5% fixed for 3 years.
My view is that it would be even better to get the annuity portion at the <= 80% LTV fixed rate of 3.6% (ideally for 1 year but only 2/3 on offer to existing customers).
I guess less than 2.5% on the warehoused portion isn't likely.
* Confusingly 4.25% is neither the normal SVR nor an LTV variable rate.
The offer is 60% at the applicable variable rate (4.25%*) and 40% warehoused at 2.5% fixed for 3 years.
My view is that it would be even better to get the annuity portion at the <= 80% LTV fixed rate of 3.6% (ideally for 1 year but only 2/3 on offer to existing customers).
I guess less than 2.5% on the warehoused portion isn't likely.
* Confusingly 4.25% is neither the normal SVR nor an LTV variable rate.
Brendan Burgess
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Hi Clubman
You can fix the 60% bit at the BoI 3.75% rate for two years.
As money is presumably tight, you should probably go for that.
This brings your average rate down to 3.25% fixed for two years.
While I think the campaign will reduce rates further, on balance, as money is tight, you probably should opt for that.
You could consider waiting for two or three months to see if BoI responds to further pressure from the Minister for Finance.
Brendan
You can fix the 60% bit at the BoI 3.75% rate for two years.
As money is presumably tight, you should probably go for that.
This brings your average rate down to 3.25% fixed for two years.
While I think the campaign will reduce rates further, on balance, as money is tight, you probably should opt for that.
You could consider waiting for two or three months to see if BoI responds to further pressure from the Minister for Finance.
Brendan
Thanks Brendan.
Can you clarify how you arrive at an average effective rate of 3.25% please? I don't get it.
I'm pretty sure that the LTV of <= 80% is achievable and thus open up the option of the 3.6% fixed rate. But I guess the possible cost of a valuation (c. €150-€250?) would need to be factored in and offset against the savings accruing from a further 0.15% cut in the main part fixed rate to see if it was worth it?
Can you clarify how you arrive at an average effective rate of 3.25% please? I don't get it.
I'm pretty sure that the LTV of <= 80% is achievable and thus open up the option of the 3.6% fixed rate. But I guess the possible cost of a valuation (c. €150-€250?) would need to be factored in and offset against the savings accruing from a further 0.15% cut in the main part fixed rate to see if it was worth it?
Brendan Burgess
Founder
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I had assumed that the property was in negative equity? I don't think that BoI gives split mortgages where there is equity in the property.
Are you calculating the 80% based on the main part of the mortgage being less than 80% of the value of the property. I doubt if BoI would see it like that. But they might.
Negative equity was never an issue in discussions with BoI.
I'm pretty sure that the total loan outstanding is <= 80% of the value.
There are some arrears and c. 80% of the normal repayment is being met which means that arrears increase each month.
BoI have several times asserted that the loan is unsustainable and have proposed voluntary surrender/sale or repossession.
Due to their unclear, confusing and inconsistent communications and over complicated letters I cannot tell if MARP still applies or not - maybe that's moot?
I don't believe that it's unsustainable but it does need restructuring to get a longer term solution.
They proposed the 60:40 split but at the rates mentioned earlier.
Something along these lines looks viable but I'm trying to get the best deal possible to get out of this cycle of repossession threats etc.
I'm trying to balance getting such a deal with being pragmatic, not stringing them along and having the best case to present in the worst case scenario (i.e. court/repossession scenario).
I'm pretty sure that the total loan outstanding is <= 80% of the value.
There are some arrears and c. 80% of the normal repayment is being met which means that arrears increase each month.
BoI have several times asserted that the loan is unsustainable and have proposed voluntary surrender/sale or repossession.
Due to their unclear, confusing and inconsistent communications and over complicated letters I cannot tell if MARP still applies or not - maybe that's moot?
I don't believe that it's unsustainable but it does need restructuring to get a longer term solution.
They proposed the 60:40 split but at the rates mentioned earlier.
Something along these lines looks viable but I'm trying to get the best deal possible to get out of this cycle of repossession threats etc.
I'm trying to balance getting such a deal with being pragmatic, not stringing them along and having the best case to present in the worst case scenario (i.e. court/repossession scenario).
Brendan Burgess
Founder
- Messages
- 53,298
Wow! From Bank of Ireland's point of view, if the mortgage is only 80% of the value of the house,they should put it on interest only indefinitely. They will get a good return on their loan. There is little risk.
I am amazed that they are offering you a split mortgage. I think you should ask for the 3.6% fixed rate as part of the split. They will probably go for it as they are obviously trying to facilitate you.
brendan
I am amazed that they are offering you a split mortgage. I think you should ask for the 3.6% fixed rate as part of the split. They will probably go for it as they are obviously trying to facilitate you.
brendan
Thanks Brendan.
They are offering the 60:40 split even though the property is probably not in NE and could possibly be < 80% LTV.
The possibility that the property might be < 80% LTV was mentioned (would require a valuation etc.) and that did not change their attitude - the split is still on offer.
The split is initially at applicable variable rate (4.25%) on the annuity portion and 2.5% (fixed for 3 years) on the warehoused portion.
Once split the borrower can apply to fix the annuity portion.
At the moment the options are 3.8% (3yr > 80% LTV), 3.75% (2yr > 80% LTV) and - depending on valuation - 3.6% (2/3yr < 80% LTV).
The latter saves only about €10 over the 3.75% option so probably not worth it when the valuation fee is taken into account.
Right now the best deal seems to be to take the split with the warehoused portion at 2.5% fixed for 3 years, fix the annuity portion at 3.75% for 2 years.
Probably best to take the split now and wait until c. September to see what happens to rates and then maybe fix at the best rate available.
The would not budge further on rates or fixed rate terms - e.g. lower rates, fix for just one year at 3.75% even though they offer that to new customers, fix for less than 3 years on warehoused portion.
They are offering the 60:40 split even though the property is probably not in NE and could possibly be < 80% LTV.
The possibility that the property might be < 80% LTV was mentioned (would require a valuation etc.) and that did not change their attitude - the split is still on offer.
The split is initially at applicable variable rate (4.25%) on the annuity portion and 2.5% (fixed for 3 years) on the warehoused portion.
Once split the borrower can apply to fix the annuity portion.
At the moment the options are 3.8% (3yr > 80% LTV), 3.75% (2yr > 80% LTV) and - depending on valuation - 3.6% (2/3yr < 80% LTV).
The latter saves only about €10 over the 3.75% option so probably not worth it when the valuation fee is taken into account.
Right now the best deal seems to be to take the split with the warehoused portion at 2.5% fixed for 3 years, fix the annuity portion at 3.75% for 2 years.
Probably best to take the split now and wait until c. September to see what happens to rates and then maybe fix at the best rate available.
The would not budge further on rates or fixed rate terms - e.g. lower rates, fix for just one year at 3.75% even though they offer that to new customers, fix for less than 3 years on warehoused portion.
Hi there,
My sister has been "offered" a split mortgage and has asked me to post for advice. I personally do not fully understand it. Here is her situation; She is in arrears of 30k and BOI asked her to pay 1295 per month for a year then they would suggest an alternative. Incidentally, 1495 is the full mortgage repayments. She has actually being paying 1400 each month throughout the yearly period. She was hoping that at the end of the year they would capitailise the arrears (30k etc) and extend the mortgage term to equate for this. However, she was offered a split mortgage 60/40, with 4.25% rate on the 60 and 2.5% on the 40. Does this seem unfair?? Incidentally, she is willing and able to pay the full mortgage repayment but does not have 30k to clear the arrears.
Therefore, she is looking for as much advice as she can, ie; explanation of split, what happens if she refuses and can she ask them to just extend the term to equate for arrears and not have a split mortgage??
I eagerly await your response
Kindest regards
My sister has been "offered" a split mortgage and has asked me to post for advice. I personally do not fully understand it. Here is her situation; She is in arrears of 30k and BOI asked her to pay 1295 per month for a year then they would suggest an alternative. Incidentally, 1495 is the full mortgage repayments. She has actually being paying 1400 each month throughout the yearly period. She was hoping that at the end of the year they would capitailise the arrears (30k etc) and extend the mortgage term to equate for this. However, she was offered a split mortgage 60/40, with 4.25% rate on the 60 and 2.5% on the 40. Does this seem unfair?? Incidentally, she is willing and able to pay the full mortgage repayment but does not have 30k to clear the arrears.
Therefore, she is looking for as much advice as she can, ie; explanation of split, what happens if she refuses and can she ask them to just extend the term to equate for arrears and not have a split mortgage??
I eagerly await your response
Kindest regards