Is it still worth switching?

E

eidole

Registered User
Messages
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Hi,
I recently asked here about switching my mortgage but things have changed since. I have 22 years left with EBS. Balanceis 148,000 approx with LTV of around 50%. Currently on 3.7% variable and had the intention of switching to maybe Avant to get a good rate. I was also planning to put a lump sum of €40,000 in as well, as my savings are not earning anything so this would bring the balance down to €108,000. I contacted a broker and starteď collecting paperwork etc.

The problem is I bought my house under the affordable housing scheme and therefore Cork County Council is going to be involved. I hadn't thought of that originally as I am not selling the house but the broker says Avant won't want to take this mortgage but there are other lenders who would. Cork CC also want a €150 application fee and a valuation done and then they will decide if I can switch or not. Not sure how long it would take to get a decision.

So my question is I can stay with EBS and go on their fixed rate of 2.75% or is it still worth trying to switch to eg Haven which is 2.35% over 3 years with €2000 cashback? The cashback wouldn't fully cover costs. Is it worth the hassle in this case?

Also, has anyone else managed to switch their mortgage with affordable housing from Cork CC?

Thanks
 
I don't know the BER rating but i think it could be C so not enough for a green mortgage unfortunately and I'm not due any cashback from EBS
 
Because you are on a variable-rate mortgage, you do not have to pay a break fee.
  • Switching immediately to KBC's 5-year fixed rate (2.4% with €3,000 cashback) will save you about €6,900 over the next 4 years
    • Of course, if you decide to do this, you will probably want to switch again in 5 years when your fixed rate expires and your mortgage moves onto Bank of Ireland's books, at which point you will be subject to their (probably higher) interest rates

  • Switching immediately to AIB's 5-year fixed rate (2.35% with €2,000 cashback) will save you about €6,120 over the next 4 years

  • Switching immediately to Permanent TSB's 4-year fixed rate (2.05% with 2% monthly cashback) will save you about €5,540 over the next 4 years
    • Note that Permanent TSB discriminate between new and existing customers, i.e., their best rates are not available to existing customers
    • For example, if you were an existing Permanent TSB customer, the best rate you would be able to switch to today is 2.95%
    • So if you switch to them now, you will not be eligible to switch to one of their low rates in the future and you will end up on a higher interest rate. When that happens, you may want to switch again to another lender, which will incur costs (and it might be impossible to switch if your financial situation has deteriorated).

  • Switching immediately to Finance Ireland's 10- or 15-year fixed rate (2.4% with no cashback) will save you about €3,880 over the next 4 years – but with the even-longer security of 10 or 15 years on a fixed rate
    • This product has a benefit in relation to moving home in the future that is explained below

  • Switching immediately to EBS's 5-year fixed rate (2.75% with no cashback) will save you about €3,780 over the next 4 years. And it is very simple and quick to do (no bank statements, salary cert or solicitor, etc., needed).

These savings estimates use for comparison the scenario of staying on the variable rate with EBS and assume that that rate doesn't change between now and April 2026 (which is unlikely). The estimates also account for any fees (solicitors' fees, valuation fee) that you have to pay and any cashback offered by the above lenders.

The estimates also assume that you have already made a €40k lump sum overpayment but kept the term the same (22 years).

Finance Ireland's 10-year and longer fixed rates allow you to avoid any potential break fee if you move home in the future (as long as you take out a new mortgage with them, and subject to certain conditions). If you are at least 3 years into your fixed rate you can "take your mortgage with you" – meaning that you get to keep the same interest rate when you move.

I have no information about how receptive each of the above lenders would be to letting you switch to them – you'll have to talk to the lenders or to a broker.

Make sure you aren't overstretching yourself with the €40k lump sum overpayment. Your priorities should usually be:
  • Paying off expensive debt
  • Building up an emergency fund in a savings/current account (3 to 6 months' living expenses)
  • Saving money for any expenses you will have over the next few years (kids; adult children going to college, etc.)
  • Maxing out your pension contributions (very large tax relief is given)
  • Overpaying your mortgage
in that order.
 
Last edited:
Paul, thanks so much for going to all that trouble! I was going around in circles myself trying to figure it out so thanks for putting it clearly. There is a lot of information there and plenty to consider. It seems like it could be still worth switching based on the above. I'll have to contact the banks and see who will deal with affordable housing and hope the council wouldn't take too long to decide. Also hope i can get something done before interest rates start going up!
 
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