Paying 3.75% to ptsb on a <40% mortgage and can't switch!

[Brendan Burgess]

I don't know what terms Frank will have if they get going, but if your cash flow allowed you to pay a bit more, you could reduce your rate. (Your extra payments would be reducing the capital quicker.)

So for an extra €430 monthly repayment, you would be reducing the monthly interest by €300.

I would guess that you would qualify as you would have the loan paid off by age 65.

I am not sure what rules will apply to Frank. They might be able to make loans for periods beyond age 65.

Brendan

 

[gnf_ireland]

we re fully on top of our financials in great depth

Good to hear. I would imagine you have a few options available to you in that case, including reducing the amount of the mortgage to fit into the criteria, or being able to determine affordability even if you do retire.

According to the following article from 2015, the following are the maximum ages for mortgages
AIB 65-68
BoI 70
Ulster 70
KBC 65-68
PTSB 70

http://www.irishtimes.com/business/...will-you-just-have-to-pay-up-faster-1.2182533

Might be worth having a look and see what the best options are for them. Of those, Ulster would be the better option currently (in my personal view).

However, if you do feel trapped in P-TSB with no sign of a reduction in rate coming, then you may want to consider a 5 year fixed term with BoI on 3.45, with 2% cashback. I know its not popular on here, but it may be an option in your case if you cannot move to anything more suitable. My quick calculation shows it would save 63 euro a month - so over 5 years thats 3780 + 8000 cashback = 11780, less cost of switching. Either way, its a 10k saving over 5 years which is not to be laughed at in my view !!

The only risk with this would be whether you can switch again in 5 years or not, as if not you may end up paying over the odds with BoI. However if you walk into it with your eyes wide open you should be fine. Lots can happen, both positive and negative, in 5 years

 

[Brendan Burgess]

Lots can happen, both positive and negative, in 5 years

Correct, but whatever happens, they will definitely be 5 years older and it will become increasingly difficult to switch.

I would be very slow to switch to any lender for a short period which might leave me captive to them.

 

[bmount]

Good ideas folks thank you.

We're in an expensive peak time with kids at private secondary schools and so on and then college hopefully (please don't jump out and give out about education please). The focus is on them, certainly not wasting money on SUV cars thats for sure (actually as a complete digression what proportion of people actually own these cars i.e. without Loans ? I think we love our debt in Ireland)

So we want to simply save a couple of 100 a month or more repayments per month as cash is a strain right now, but some of our 4 x small paid-up pensions and relatively modest investments will be in better shape in 5 years time but now now (ok doesn't solve it for 15+ years though).
No Brexit would help those minor investments in our case I think

So overpaying to reduce the term is not where we are at right now in our lives but that might change in 7 or 8 years.

 

[gnf_ireland]

I would be very slow to switch to any lender for a short period which might leave me captive to them.

Agree completely and I did state that in my post. Any decision made needs to take into account all the impacts of it, including the risk of being entrapped in the future.

Based on the comments above from @bmount there is a high level of expense right now in terms of education fees. There is no guarantee that Frank or any other bank would offer a mortgage based on this. No different really to someone with high level childcare/creche fees applying for a mortgage/switch - their income is reduced accordingly.

Sadly for some (myself included), between childcare costs until the children finish primary level and potentially education fees for secondary and third level - it is a major drain on finances. The challenges of the 'middle classes'. Hope the little 'brats' appreciate it at some stage in their lives

*Note* dont shoot me for suggesting a 1.1m euro house defines middle class !

 

[bmount]

Actually yes gnf_ireland, we're considering taking 50% of their salaries when they leave college

 

[gnf_ireland]

@bmount may I suggest a strong strategy about getting them off the payroll and out of the house instead. You might find that they are not too keen to move out after they finish college, as they may not get it so comfortable anywhere else