Move to KBC or Avant from AIB variable of 2.75%

lialwarrior

Registered User
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Hi, looking for opinions please on switching mortgage provider, details below.

I am assuming fees of approximately €1000 for solicitor and €180 for valuation, also assuming we will qualify for Avant - my location is Navan, Co. Meath approximately 30 miles outside of Dublin. I receive free current account fees as part of my mortgage now. I could pay a lump sum of €10K from savings right now, which I guess I should consider doing.
We am not adverse to locking in for 5 year, however, it would be nice to have the option to be able to overpay a percentage of the mortgage e.g. 10% (if my funds allowed it in the future).

Existing Joint Mortgage Details
Current Mortgage = €233K
Years remaining = 19 (May 2041)
Monthly repayment = €1,295.25
House value = €550k
Current rate = AIB (variable LTV<=50%) 2.75%
Current account NO FEE MORTGAGE worth approx. €150 / year

Option 1
I can easily switch to AIB PHD 3Yr LTV Fixed <=50% @ 2.35% - There would be no direct expense to me by doing this e.g. solicitors or valuation fees and will maintian free current account fees.

Option 2
Switch to Avant 3 or 5 Year LTV<60% @ 1.95%
Solicitors fees ~ €1000
Valuation fees ~ €180
Loss of free current account fees ~ €150/yr multiplied by length of contract

Option 3
Switch to KBC 2 / 3year fixed rates @ 2.25% with a KBC Current Account based on an LTV of <=60%
Free current account fees if we mandate salaries to the KBC Current Account.
€3000 cashback
Option to overpay mortgage by up to 10% per year
Solicitors fees ~ €1000
Valuation fees ~ €180


Many thanks in advance.
 
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Option to overpay mortgage by up to 10% per year
KBC is 10% in total over the fixed period, not per annum.


Here's the maths logic:
Your free banking is worth about 0.06%, based on info provided.

There's 0.3% between KBC and Avant. Minus free banking leaves it 0.24%

Let's say 3 year fixed.
Cashback 1,500 / 3 years / 0.24%
Means mortgage has to be over 208,333 before Avant works out cheaper.

Or, stay with AIB. Fix immediately, rather than paying a higher rate while waiting to fix. Pay off as much as you like early, and no break fee unless AIB reduce their 2 year fixed rate below 2.35%
 
Not sure if AIB can do split mortgage when you are already in the middle of one.

I recently switched to AIB. Got the split mortgage option. What I did was work out how much realistically I can overpay in the next 3 years based on my income. I put that for the variable. The remaining goes with fixed mortgage.

So now I'm overpaying on one portion. And getting the benefit of lower fixed rate on the portion that I know I realistically won't be able to make overpayment for the next 3 years. So best of both worlds.

Definitely one to consider.
 
I think it's easier to think in money terms, rather than percentage terms.

5270


First compare AIB to KBC

So if you switch to KBC, you will get €1,850 cash into your hand plus a saving of €250 a year.

The next question is which would you think will be cheaper in the long-term?

KBC has been cheaper than AIB for new customers for some time. But for a long time, they exploited existing customers by refusing to allow them to move to the new customer rate. While AIB has been more expensive, they have been fairer to existing customers. They pass on rate cuts automatically to those on variable rates.

It's hard to know. Overall, I think that KBC is likely to be cheaper in the long-term, so it's probably worth switching.

Next compare KBC to Avant

You will save €500 a year, but you will be €3,000 a year worse off up-front.

So it would take you 6 years to recover the difference.

So KBC is better than Avant as well.
 

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Many thanks for your input, I appreciate it. I think I will get the ball rolling on fixing for 3 year with KBC.
 
Why aren’t you considering Ulster Bank?

Great fixed rates and an ability to overpay 10% per annum...
 
UB are likely to pull out of Ireland. What'll happen to their mortgage book is unknown, but there's a risk you could end up with some vulture fund paying a high rate.
 
After reading through the sticky re: switching quickly and getting cash back, we are now considering this as a viable option.

So with that in mind, should we change from our AIB variable 2.75% to a 3yr fixed 2.35% with AIB - which would provide us an instant saving, while we gather the relevant documents, line up solicitor etc.

After reading earlier posts, I believe we will be able to break out of this fixed AIB mortgage, provided rates remain unchanged - Is this correct? I guess worse case scenario we are locked in for 3 years at 2.35%

The other ingredient in the mix is that my wife works in the hospitality industry and therefore her job has been a mix of 3 to 5 day per week since Covid, she is still in fulltime employment, but at the moment getting an element of social welfare (2 days) per week. Therefore, should we wait until she has 6 weeks worth of payslips showing her normal pay.

Mod's - let me know if you want me to start a new thread for this query.

Thanks.
 
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