Mortgage approval -> Does this sound like a good rate

I have used a mortgage brooker to search for the (best) mortgage. My circumstances are a little unusual. I am looking at purchasing my parents inherited property valued at between 270 - 290k. We are going to try and fix the price at 240k if possible. (waiting to see a solicitor).

The mortgage brooker has come back with Ulster Bank Tracker Mortgage of -> 3.5% apr Cost per thousand €3.84 for LTV of less than 60% (ECB+0.95%). and 3.7% apr Cost per thousand €3.96 for 60%<LTV<92%(ECB+1.15%) on a 200k mortgage over 40 years.

I am wondering has anyone found Bank of Scotland as good or EBS I also heard were competive?

On the rate you should look at the best buys on this site and/or in the newspapers. Don't assume that all brokers search the whole market for you. (NIB has a lower <60% LTV rate for example.)

An additional very significant saving can be made by reducing the term of the mortgage. While knowing nothing about your circumstances, 40 years is one hell of a long time to be nibbling away at a (in contemporary terms) relatively small mortgage. Play around with http://www.jeacle.ie/mortgage/ and see how much interest you could save by knocking a few years off the term.

And of course the easiest savings of all are to be made by running a million miles away from any insurance products offered by any lenders and treating the offerings of any broker with deep suspicion. Trawl the internet for property and contents cover, life cover, income protection etc. Do not leave any of these until the last minute - a lethal combination of naivety, panic and inertia makes selling grossly overpriced, commission laden insurance products to house buyers caught in artificially created deadlines the insurance industry equivalent of relieving children of confectionery.

Well For the 40 year. The only reason would be to keep the minimal payments for the first year or 2. As I live at home I am going to be in for a shock as to how much living actually costs. Also this is to allow for me to do up the house as it could take as much as 20k for the existing house and 50k to rebuild the extension. I would then be in a position to over pay as much as possible.

So the long term is to keep the repayments to a min with a view to paying back as much as I can afford. I think this makes sense?

phester said:

Well For the 40 year. The only reason would be to keep the minimal payments for the first year or 2. As I live at home I am going to be in for a shock as to how much living actually costs. Also this is to allow for me to do up the house as it could take as much as 20k for the existing house and 50k to rebuild the extension. I would then be in a position to over pay as much as possible.

So the long term is to keep the repayments to a min with a view to paying back as much as I can afford. I think this makes sense?

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The good news is that you should qualify for half the stamp duty rate if its bought from a relative (even if it is the estate of a relative). Ask your solicitor for details to be sure.

The longer the mortgage term the higher the mortgage protection life assurance premiums too. Obviously you may clear the mortgage before it runs full term but the individual and cumulative life assuance premiums on a 20 year mortgage repaid in 15 years will still be (significantly?) lower than the premiums on a 40 year mortage repaid in 15 years.

Leaving aside the 40 year discussion for now - (but it does seem a long term loan) - you were also asking about better rates.
It looks like - from the figures you gave that the LTV will be around 70% - so you won't be able to get those rates aimed at 60% LTV or lower.

For 60 to 80 % LTV National Irish Bank have a rate of ECB + 0.99 .

If short term lower payments are attractive - then the ICS (The Mortgage Store have a 2 Year Discount Tracker of ECB + 0.95% - which reverts to ECB + 1.25% after 2 years. Not really a big enough discount to make it worth the higher rate afterwards. They do a 1 year discount also of ecb + 0.85 reverting to ecb +1.25 after the first year.

The life premium point is well made by ClubMan. On the other hand, buying a lot of cover while you're young gives you the flexibility of keeping it or cancelling it when when the mortgage is redeemed - because new cover is likely to be very expensive for you at that stage and you may well want a policy in place up until around your retirement age.

I'm reassured that phester is thinking in terms of increasing repayments at a later stage to shorten the mortgage term - I'm just hoping that he/she will have the financial self-discipline to do so...it's one of those resolutions that a lot of people have made but a lot less have seen through.

if you do decide to stick with the 40 year term the only lenders doing this at the moment is first active and ulster bank

I am exempt from stamp duty as the sale price is below 300k and I am a fist time buyer. I just got the good news from Bank of scotland. They will offer me the switcher mortgage as I am at a low Loan to value for a first time buyer. This meas that I get the 2 year discount rate on thier competive tracker of 3.23% on going. I think. They dont have the facility of giving the cost per thousand at the branch I went to. I would have taught this was the best measure of the loan. They will also give me up to 230k with the repayments coming in at around 802 per month before tax relief at source. I will need to check my firgures when I get the figures in my hand later.

phester said:

They dont have the facility of giving the cost per thousand at the branch I went to. I would have taught this was the best measure of the loan.

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[broken link removed] is a page from BoSI web-site, showing the repayments as cost per €1000, for various amounts, over 20<40 years.