Sanction in principle for AIB or BOI for mortage - which one to go with?

J

Jeff

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Hi all,
just looking for some advise on mortgages from AIB & BOI. We have a Sanction in Principle from both banks for a mortgage and we're now in a situation that we need to decide on which one to. The rates open to us are

AIB
Std Variable: 4.9%
1 Year Fixed 4.09% (New Customer rate)
2 Year Fixed: 4.75%

BOI
Std Variable: 4.5%
1 Year Fixed: 4.29%
2 Year Fixed: 4.49%

So the questions I have from my side
1) We'll go fix for 1 or 2 years. I'm more concerned about the long term. Right now, both banks have practically the same standard rate but traditionally who has had a better variable rate?
2) 1 Year Fixed or 2 Year Fixed. From reading on the forum here there is some speculation that ECB may drop rates again or at least keep steady for a while. As a result I was thinking that the 1 Year fixed at 4.09% is the best option (sincer lower than std variable rate) and hoping that after a year that the AIB rate will still be around the same of 4.49. Just wondering what people thoughts were on fixing and duration
3) Do banks price match each other's rates and are open to negotiate on rate? For example would AIB match BOI's 2 year rate if I wanted to go 2 years fixed.
4) What's people general impression on expected interest rate flucuations from AIB & BOI over the coming years. Complete crystal ball stuff but just wondering if there is a general belief out there
5) Any other advise about using AIB or BOI

Thanks
Jeff
 
You'll have a better chance of picking the lotto numbers than picking the correct bank based on long term interested rates. We are living in some strange times and the mortgage crisis has a long way to go to properly unwind itself.
 
Personally, the only way I can see mortgage rates dropping is if competition increases either through new entrants or increased lending from current banks. Competition could also be a factor if demand for mortgages falls but that seems unlikely with a lot of those that didn't buy now getting married and having families.

You need to make your own call on whether you would prefer the certainty of a fixed rate. It's crystal ball gazing but must be a higher chance of rates going up than down.

Good luck with it. A very nice position to be in if you are only buying now.
 
PE2013 said:
Personally, the only way I can see mortgage rates dropping is if competition increases either through new entrants or increased lending from current banks.
Click to expand...

As strange as it might seem, the ECB rate going up would actually have a lower effect on the variable rates, or at least should. Banks borrowing rates are not based on the ECB rate so if it rises, the loses on trackers closes.
 
I would go with whichever bank you had the best and most efficient dealings with thus far.
 
I've been handling a family sale - if the purchaser is to be believed (and he mightn't) trying to get actual approval and then the cheque with AIB is impossible - I've no idea what BoI is like at the moment.
 
I work every day in lending for different banks, in terms of service I'd say the following:

BOI give out loan offers like sweets, their offers are a killer to close on because they are willing to put so much conditionality on them.

AIB are harder to get a loan offer from but once you have it you can bank it.

In terms of rate, if rates stay the same going with AIB one year then the higher variable will leave you in about the same position as BOI 2yr fixed. Even if the ECB drop rates the banks are unlikely to do so.

You could also look at other banks PTsb have a lower variable than both of them.
 
Thanks everyone for their feedback. Definitely no hard direction on who is the better option. I'm leaning towards AIB, simply for the fact that the first year payments are less which frees up slightly a bit more cash initially which is needed for renovations/modernisation on the house.

Jeff
 
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