Switching to lower interest rate on <60% LTV

Hello Everybody,

I am approaching the situtation where the outstanding loan on our house is going to be less that 60% of its value. No doubt the bank will not call me directly to offer the lower rate that seems to be available when you are in this situation! I am wondering if anybody has any experience of asking for this and how it went.

In particular I am wondering if it would be counted as a re-mortgage by the lender which would cost something to put the paperwork through one. Or is it the case that I have signed up to pay at a particular rate and therefore tough luck.

I am pondering moving to another lender to shave a few quid off the monthly payments and realise I would have to pay a switching fee in that case but have the spectre of a possible penalty from REA for redeeming the mortgage before 5 years has passed since getting it.

Javmaster.

Hi Javmaster. Who is your mortgage with? If it's with a lender who offers lower rates for loan under 60% it should just be a case of asking for it and (possibly) having your house officially valued. Otherwise you could remortgage with, say, Ulster Bank who charge 2.95% for loans of sub 60% and pay all the remortgage cots for loans under €254,000. Oh and BTW the commission clawback period with REA is 3 years, not 5!

Sarah

www.rea.ie

Check out NIB's tracker - 2.79%

Hi Sarah,

At the moment the mortgage is with Bank of Scotland.

You're absolutely right - it is 36 months not 5 years for the clawback thingy - that's not so bad at all, thanks for making me re-read the docs!

Thanks for the pointer rainyday - that is a very good rate alright - we'll certainly give them a look if switching.

JavMasterJ

Well, I'm on a <60% LTV at the moment with Ulster Bank and I had a chat with them this week about releasing equity which would put me up to app. 80% LTV. The advisor said I'd have to keep an eye on it and as soon as I feel the LTV is back below 60% to get it valued and they'd just switch me back down to the lower rate. Simple.