Switch mortgage or stay with PTSB after fixed term?

Hi,
I'm looking for some mortgage advice if that's ok. I found my way here from Google. I will start by saying I'm completely clueless about all of this, and to be honest, I've probably always buried my head in the sand a bit when it comes to mortgages.

We're 15 years into a 30 year term with PTSB, and now is the first time we're out of negative equity/fixed rates, so we're able to look around elsewhere. We haven't had the house valued anytime recently, but based on what other houses in the area have sold for in the last year, I'd guess that it's somewhere around 175-180k.

The remaining balance on the mortgage is now 134k. Just got letter yesterday from PTSB, fixed term ends next month and they have offered us the following rates:

2yr fixed 3.1% €909.42
3yr fixed 2.95% €899.74
5yr fixed 3% €902.96
7yr fixed 3% €902.96

Current rate is 3.7% (€949 pm). Just from quickly looking on places like Bonkers, I can see better rates out there, but the estimated repayments, while slightly less than the PTSB payments, don't seem drastically lower. And so that has me wondering how much work and effort is involved in moving lenders, and then overall, is the saving going to be worth it if I have to pay a lot of fees to change over.

The whole thing has then got me wondering about mortgage protection policies also. We only took out the basic policy, the decreasing cost of covering the mortgage. When we took it out it was 77 pm, and I'm embarrassed to admit I never gave it a second thought in all of the times we had to review the mortgage.

But just doing quick online quotes now (with updated remaining term and balance) I'm getting quotes of 15 pm. Does that sound right, or is it going to increase when I take it further and fill in forms (no health issues, nothing has changed since we took out the first policy)?

I'd appreciate any advice that anyone can offer to a clueless fool. And if you could break it down into what I should be doing step by step, all the better (sorry, I really am useless at this).

Thanks in advance.

@bluecat Congratulations on taking the first step to freeing yourself from PTSB It is absolutely worth your while.

Your LTV (loan-to-value ratio) is about 77% (134k/175k). So you are eligible for offers for LTVs less than 80%. You should be able to switch provided:

• You still have a good credit record
• You and your partner are still in full-time permanent employment and are earning about the same as (or more than) when you first got a mortgage
• You meet the usual conditions

For your circumstances you should look at Avant's 2.15% fixed rate (fixed for 3, 4, 5 or 7 years). A lot of people here would suggest that, currently, fixing for longer is better.

You will save about €1,140 per year in interest versus PTSB's 3% rates. There is a one-off cost of about €1,700 (solicitor's fees and valuation fee) to switch, but you can see that the savings from switching will offset that in about 18 months. When looking for a solicitor, shop around to find one with a lower fee (€1,300 all in should be easy enough to find).

Do you know what your BER (building energy rating) is? If it is B3 or higher, you are eligible for AIB's green rate. The interest rate is also 2.15% but you will get €2,000 for switching, so it is probably a better choice than Avant.

You should definitely get a cheaper mortgage protection policy too.

Thank you very much for your reply, I really appreciate it.

I am still in full time permanent employment, my wife is not currently. At the moment she is at home with the kids and we're probably looking at another couple of years before she's back in (hopefully) full time employment.

My current income is probably about the same as our combined income was at the time we took out the mortgage. I'm not sure whether the fact that only one of us is now working will affect our chance of switching. Our credit is good otherwise, and I can't think of any other reason we couldn't apply.

Regarding the BER, I don't know what ours is. Houses in the same estate and the next one that are of similar age, which sold in the past year were all C1 - C3, so I doubt we would qualify for the AIB green one.

Is there any reason not to look into taking a longer fixed term with Avant? Are they likely to stay in Ireland? Or what would happen if we switched to them and they later pulled out?

Thanks again.

@bluecat Yeah, it doesn't seem worth your while to get a BER assessment. It might cost you €150 to €250 and it sounds like your rating is very unlikely to come in at B3.

The next thing is to find a broker that works with Avant. Confirm with them that they won't charge you a fee. If they do, look for another one.

Then talk to your broker about you and your wife's employment/income situation and whether it will prevent you switching to Avant. (I don't think it will.)

A lot of people here would suggest that, currently, fixing for longer is better, so the 7-year rate could be a good choice (if they are right).

Thanks again for your help Paul, I really appreciate it. I'll have a look on their site for a broker and get in touch.

That Mortgage Protection Policy sounds very expensive, unless, perhaps, you were both smokers when you took out the original policy.

Changing policies is way. Get a quote online from a couple of the discount brokers - Low.ie for example. Once you've picked the cheapest one, proceed with it, get the policy document and phone PTSB to arrange substituting it for the existing one (which you'll need to cancel).

That might save you €700 x 15 years, based on the figures that you've mentioned above.

You'll find the process very easy, assuming you don't have any underlying health issues etc.

Once you've done that first part, you'll already be enjoying the feeling of having saved some money, so then move on to refinancing your mortgage, with a cheaper lender.

Don't be too concerned about Avant possibly leaving Ireland in the future, it won't really matter once you've drawn down your new homeloan. You'll be protected by the same regulations, and legislation, regardless of who your lender is.

Don't be reluctant to move lender, you have to look after yourself and your family, and there's nothing to be gained by paying a higher interest rate, or remaining loyal to the same Bank.

Thank you very much MrEarl. I will do that with the mortgage protection this week, and make a start. Waiting for an appt with a broker for Avant, so hope to get the whole process started soon. Thanks again to you both for all your help.