Chance to get away from high SVR

Hi folks,
Looking for some peoples opinions on the best course of action for me.

Took out a €250K mortgage with PTSB in 2003 on 3-Yr Fixed and then switched to variable rate. Like everyone else with PTSB, I have had the pleasure of paying up to 6.15% interest.

Recently, I've gotten a lump sum that I'd like to put off the mortgage with the effect of shortening the term by:
- putting the lump sum off the mortgage
- taking the decreased payments option
- and then agreeing to overpay when it is possible

As a frustrated PTSB customer, I would also like to make this an opportunity to break free from the punitive rates by either trying to get a new LTV rate with PTSB or by switching.

My question is really: In peoples opinion, what is the best way to approach this? Should I pay off the lump sum with PTSB thereby reducing my LTV, and then look for a better deal or switch. Is really the only sensible option?

I am guessing the key question here is what is your LTV now and would you be in a position to pay down the mortgage to 59% LTV in order to get a better rate?

Whether you pay beyond the 59% would be a matter of choice - but to get the best deal you will probably need to have that magic LTV below 60%

Once you have that, its worth talking to P-TSB to see what they can do for you, and if they wont put you on the same basis as new customers, start the switching process to the likes of Ulster Bank or KBC. Its like a new mortgage application so you will need to agree durations etc from stratch again. Just remember no overpayments permitted if its a fixed rate

gnf_ireland said:

I am guessing the key question here is what is your LTV now and would you be in a position to pay down the mortgage to 59% LTV in order to get a better rate?

Whether you pay beyond the 59% would be a matter of choice - but to get the best deal you will probably need to have that magic LTV below 60%

Once you have that, its worth talking to P-TSB to see what they can do for you, and if they wont put you on the same basis as new customers, start the switching process to the likes of Ulster Bank or KBC. Its like a new mortgage application so you will need to agree durations etc from stratch again. Just remember no overpayments permitted if its a fixed rate

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Hi gnf,

Current LTV would be approx just under 70% and I could get that down to close to 45% if I needed to.

I know I signed up for a SVR but the past few years with PTSB have been soul destroying. I am in the frame of mind now just to get away from them (not that it will bother them too much).

It's just a chance with a lump sum to see some light at the end of the tunnel. I have never been in a position up until now to influence the LTV directly, so I'm just looking for the best options now.

You can apply for a switcher mortgage with any bank and suggest as part of the package you would reduce your LTV to 59% to avail of the cheapest rates. That way you can see which of them would 'bite' so to speak. Once you have your Approval in Principal, you can then determine what the best course of action is from there. That way you don't need to commit any funds until you have decided what to do

All of this works on the premise you wish to leave P-TSB, and from the sounds of it you do. Just remember that switching mortgages is like applying for a new one, so do get your financial accounts into a 'good' position as they will query all irregular activity

Good luck with the whole process.

Assuming you are paying a relatively high SVR on your mortgage, it makes financial sense to pay down your mortgage regardless of any other factors (subject to having an adequate emergency fund in place). A tax and commission-free rate of return equivalent to a high SVR rate is pretty much unbeatable in the current low return environment.

If you can then re-finance with another lender at a lower rate, then you should definitely do so. KBC looks like an obvious candidate as things stand.

We have a LTV way less than 50%, but absolutely no way would Perm tsb reduce our 4.5% SVR. I am in the process of moving to Ulster Bank primarily because they pass on rate reductions to existing customers. Get out of Perm tsb if you can!

Thanks folks,

Tigerboon, that's good information to have. Presently, there isn't a lot that would sway me to stay with PTSB at this stage.

I'll give it a try with PTSB.

How are you finding the process of switching?

Early days yet, had a meeting with the manager in the local Ulster Bank, she was lovely, brought along a bit of paperwork, have a few more bits to get together then we'll meet again, but she reckons on what we've done so far that all should be fine, bit of a pain collecting bits together, but anything worth it to get away from perm tsb!

It maybe worth noting that PTSB do not offer existing vr customers the option to fix their mortgage.