Should I Switch mortgage

Hi.

I built a house about 18 months ago and took out a mortgage of €220,000 over 30 years to do that. I am a Ulster Bank U first account holder and so have a current variable interest rate of 5.1%. My monthly repayments (with tax relief inc) are about €1100. I estimate that my house is now worth between €370,000 and €400,000, making my mortage less than 60% of the value. I also have a lump sum of around €20,000 from my SSIA that I was thinking of sticking into the mortgage, further reducing the value of the mortgage versus the house value. I am not overstretching myself with my repayments but I would like to get as good a deal as possible of course.

I have a couple of questions on my circumstances,

- Is it worth a switch to a different lender and if so does anyone have any recommendations?
- Should I consider fixing the mortgage rate for a couple of years as it looks like interest rates will continue up (todays papers are talking about a fuel crisis that would almost certainly force interest rates higher)

Any help appreciated.

Re: Should I Switch mortage

You should really speak to a broker, we are currently in the process of switching ourselves and there are deals out there...

Neilc78 said:

- Is it worth a switch to a different lender and if so does anyone have any recommendations?

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If the potential savings on a lower rate outweight the costs (if any - some lenders will subsidise or subsume them) of moving then yes. You can use Karl Jeacle's mortgage calculator to estimate the potential cost savings of switching to a lower rate.

- Should I consider fixing the mortgage rate for a couple of years as it looks like interest rates will continue up (todays papers are talking about a fuel crisis that would almost certainly force interest rates higher)

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Lots of existing threads on the fixed versus variable/tracker rate question. In my opinion only fix if you really need to (i.e. are hard pressed with your repayments or would be if rates increased by a couple of percent).

I have been doing some checking and I reckon I can get a LTV tracker mortgage apr of 4.61% with NIB. Has anyone any experience of this offer, am I missing something in the small print?

I switched to NIB earlier this year and got the .5% above ECB rate. I had no hassle with the switch (though others on here did, depends on Branch I think) I paid a small amount off the mortgage (which would have reduced the term by 1.5 yrs) and then with the change in rate I shaved off another 3.5 yrs thus bringing my term from 25 to 20 yrs. I'm paying the same amount in repayments as I was on my previous mortgage.

Is that an APR or a nominal rate? Is it a special offer that reverts to a higher margin after a year or whatever? ECB + 0.61% sounds very low.

It appears to be a apr % and there is no mention of being valid for any period so I am presuming that it is over the life of the mortgage (of course I'll have to check this out)

You can have a look at it on this webpage

[broken link removed]

On the left column select "Calculate LTV Mortgage". On the calculator if you enter my details of

House Value = 380k
Mortgage value = 220k
Loan Period = 30yrs

It bangs out an APR of 4.61%.

I think I'll get them to send me out a brouchure and I'll report back on what I find.

5.1% isnt a bad rate in these days. rates with ptsb on tracker for your amount is 5.35% etc.

When switching, make sure to check all the fine print. Some banks if they are paying your legal fees will lock you into a 5 year contract, if you close within those five years or switch to another bank, they will take back the legal fees. Halifax offer a good 3 year fixed at 4.85%

pspdude said:

5.1% isnt a bad rate in these days.

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ECB + 1.1% is surely not the most competitive rate around though?

Re: Should I Switch mortage

pinkyBear said:

You should really speak to a broker, we are currently in the process of switching ourselves and there are deals out there...

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You probably won't get a mention about NIB from a broker - they don't work with brokers.

For an LTV under 50% NIB is still the best rate in Ireland - AIB come a close second. NIB will pay towards your legal fees .

Hi,
We switched to NIB and because of our LTV ratio got a tracker rate of ECB plus 0.51%.

It took a while to get all the documentation together, but in the end I think the savings are worth it. We went with the NIB's solicitors so the only outlay was the cost of the valuation.

We were lucky enough to get our house valued last October. I don't think we would get the same valuation now. But it meant that we the LTV was low which reduced the rate they offered us.

Ruth

Did they allow you to get your own valuer or did they insist you use a particular valuer?

nib let you use your own valuer but they have to be IAVI accredited.
their rate of ecb+0.5 does not have a time limit on the agreement. 4.61 is the apr and as mentioned before nib product is not sold through brokers.

looking at fixed rates and comparing it with nib offer you need two more ecb hikes of 0.25 for the nib offer to be rougly equal to some of the fixed rates around. i am not sure whether the ecb will go above two more hikes though

but my advice is always stress test your payment with at least 1 per cent increase in your mortage rate and if you think that you can not afford it then you can think about fixing. don't forget most of the tmes banks take possible interest rate incerases into account in their fixed rates so in a way you are trying to beat the bank in forecasting possible rate increases

I have a U first tracker mortgage too it was originally 92% but now the LTV is around 65% when I contacted Ulster bank. They said that if I got my house valued and it had an LTV of <80% i would get another .25% off my mortgage. I did so and now my mortgage is 4.75%.

Have you rang the bank to discuss different options as alot cheaper then switching and less hassle.

Hi all.

Well just finished talking with Ulster Bank and they are going to try and match NIB. They started off by trying to tell me that NIB 4.6% rate was only for an initial 6 month term, which was a bit cheeky as well as untrue. I'll let you know how I get on next week.