Strategic choice of mortgage with AIB or BoI

[mazz]

Hi there,

Any views on whether there is an real strategic advantage to taking out a mortgage with one of the two 'pillar' banks (AIB and Bank of Ireland) over the other?

Assuming you had a loan approved in principle from both, current interest rate, T&Cs etc were the same in both. Somewhat hypothetical, but you get the idea.

For example, BoI is in much better shape than AIB currently, may not be as quick to raise interest rates on variable rate mortgages etc. Counter argument would be that both will charge what the market can bear, only be as competitive as they need to be. And so on...

I suspect I'm overthinking this and that the current interest rate etc is the most important, but just to see if anyone has a view on this?

Thanks,

Mazza

 

[WizardDr]

@mazz both have ambitions to be returned to the private sector.

BoI has raised its margins and will do again and it will be party at the expense of variable rate mortgage holders.

AIB wont be far behind.

So it wont be cheap either way but AIB have a better record at the moment.

As both have the same ambitions the issue central to their situation will be Return on Equity - that with the regulatory insanity will see the end of any semblance of cheap fundind and there won't be a return to the way wholsesale funding was organised. It will all be collateral and securrity based. Unless somethimng dramatic is done all I could predict is higher rates regardless.

 

[shigllgetcha]

AIB has further to go to get back to being private owned though so there might be more pain there when it happens. Just my view of the situation at the moment

But I guess AIB could stay state owned for ever too which might mean they have to be more lenient

BOI seem to be shadowing whatever AIB do at the moment, just after they do it so in the short term it seems like it wont make a difference. AIB are cheaper at the moment though

Problem is no one knows whats going to happen. Bit of a gamble either way. We applied to both in the summer but AIB wouldnt offer us what we needed so we went with BOI which was my prefernce in the begining

 

[tonto25]

Based on an article in yesterdays Irish Times (can't post link as don't have enough posts), it would seem that AIB's variable rates are only going to go in one direction in the next couple of years and that is up. AIB CEO expects their rate to go up to 5-6% in the next couple of years.

Maybe it is the same for all the banks but as far as I know, none of the other banks have come out and indicated that their rates are going to increase.

 

[shigllgetcha]

Based on an article in yesterdays Irish Times (can't post link as don't have enough posts), it would seem that AIB's variable rates are only going to go in one direction in the next couple of years and that is up. AIB CEO expects their rate to go up to 5-6% in the next couple of years.

[broken link removed]

AIB also warned that mortgage interest rates could rise to 5-6 per cent over the medium term from a current level of 4 per cent as the bank returns to full health and attempts to attract investors.

I checked IT's top 1000 ages ago to see which lost most in 2011 and it was AIB by a huge margin but I dont know enough to say whether that was because the put alot aside to deal with defaults and bad debts or just because they arent as profitable. Id worry most about who ever was losing most