Switching - getting the exact balance right?

W

WaffleNinja

Registered User
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Im switching mortgage at the moment. We've applied for 250k based on the balancing statement given to us by our current mortgage provider, but by the time we switch, there'll be less than 250k due on the mortgage. What happens to that difference between what we're borrowing and the balance remaining on the mortgage?

Sorry if its a stupid question.
 
You get to keep it, but it is 6 of one half a dozen of the other. Your solicitor will pay off your balance with your current mortgage provider and refund you the balance. Have you looked at the other posts on this forum about double and triple switches to get the 2% cash back?
 

Yup. Moving to BOI on a 1 year fixed. Once the cash back comes in i've plans to move to EBS (I have my AIP already) for 2% cash back. Then fingers crossed i'll move to ulster bank for their 2.3% 2 year fixed (all depends how ECB rates go in 2019 though). BOI website implied the 2% cashback ends in June 2019.

"solicitor will pay off your balance with your current mortgage provider and refund you the balance", which I then give to the solicitor as payment.
 
Our solicitor deducted his fee from the difference and refunded us net amount.
 
OK but you don't have to stay with BOI for 1 year, just move once you get your cash back. There will be no penalty or very small if you do. When i switched from BOI i was on a variable rate so it didn't matter. Have you applied to PTSB? If not why not?
 
Yup. Tis the plan. Just switched but boi say my first payment isn't until February. The mortgage person actually called to my office after everything was done and dusted, and gave me a bottle of wine and a wine tools set. Then told me boi are trying to get the cash back out to people before the end of the year, so I might get it before I even pay a single mortgage payment. Happy days if that happens.

Any idea of a practical example of what I'd owe boi if I was to switch after like a month or 2?
 
It'd be the amount drawn down plus (daily interest x number of days from drawdown to switch). Daily interest on a 250k mortgage at 3% over 30 years would be about 20 quid a day, give or take, so if you switched after 2 months (with no payments in that time) you'd need to pay them around 251200 to clear the mortgage.

Also may need to add a break fee if on a fixed rate, though it may be 0 or fairly small, this changes daily depending on the day. As a rough guide, if the rate (look at euro rates here https://www.theice.com/marketdata/reports/180 ) on the day you drew down is higher than the rate on the day you close the mortgage, there shouldn't be a break fee (unless your with AIB..).
 
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Gotcha. Due to get the BOI cashback soon enough (or so they said), and my first payment is in February. I've EBS lined up with AIP, so i'd hope to switch to them by some time in spring. It's the "break fee" I was worried about. Kinda sounds like the sooner I break from BOI the less chance there is of euro rates fluctuating (unless brexit screws me.... maybe I should switch before March 29th)
 

Corrected the above, had that the wrong way around. How long did you fix for? If you break before 6 months you should be fine, after 6 months some banks round down the next year so those rates would apply; for example: 7 months into a 5 year fix the bank may use your drawdown rate (5 year rate) minus your closing rate (4 year rate), which may have more of a difference than breaking at 5 months and both rates being 5 year rates.
 

Just the 1 year fixed.
 
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