switching to tracker is it poissble with lower mortgage

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giolla

Registered User
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currently I have a mortgage of 170k over 20 yrs for a property valued at 320k. The mortgage has been paid off for the last 5 yrs so I am assuming the amount outstanding would be a lot less than 170k now.

The rate is 3.6% iwht BOI. My question is would a bank with a cheaper rate and tracker rate allow me to switch with my current mortgage (or does the ammoutn fall too short). E.g. if I were to more to UB could I get the 2.9%?
I'm cunfused about the terms of a tracker mortgage rate.

Also would it be worth my while haggling with BOI to switch to a tracker rate (3.1% I think)?
If I had this rate my repayments would reduce significantly each month.
 
The first thing you should do is get onto BoI as soon as possible as you are paying the highest variable in the market. BoI do offer a tracker rate of 3.1% and there should be no reason for them not to allow you to switch to it without cost. If they do not then Ulster Bank's tracker rate for loans of up to 60% of the value of the house is 2.95% (2.85% if you open a U-First current account at €9 per month). They will pay all the costs involved in switching - the only proviso is that if you redeem the mortgage within 5 years you have to repay the fees; approx €900.

A tracker mortgage is a variable rate mortgage directly linked to the European Central Bank base rate - the margin over the ECB is set at the start of the loan and can not be varied by the lender. So, with Ulster, the tracker is ECB + 0.95%; the ECB base rate is currently 2% hence 2.95%. If the base rate went to 1% you'd pay 1.95% - if it went to 5% you'd pay 5.95%. As with any variable rate mortgage you can make overpayments at any time without penalty and there is no penalty for switching to a fixed rate with the same lender.

Sarah

www.rea.ie
 
Just looking at the BOI website [broken link removed]and it has several different Tracker options ie Homeloan Tracker 95/105/110/130 all with varying intrest rates. What is the difference between these ? Also it looks as if its only for new customer. Is this correct? I ask these questions because I am also with BOI and wouldnt mind a few extra Euro in my pocket at the end of the month instead of the banks :D
 
I also had my mortgage with BOI, paying 3.6% and was thinking of changing to UB at 2.95%. When I told BOI, I was probably going to change they matched the rate offered by UB, despite my not qualifying under their LTV rules.
 
thebishop said:
I also had my mortgage with BOI, paying 3.6% and was thinking of changing to UB at 2.95%. When I told BOI, I was probably going to change they matched the rate offered by UB, despite my not qualifying under their LTV rules.
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Was just onto my local branch of BOI and basically told her that the 3.6% wasnt good enough and that I wanted a lower rate. She said that I could defo get the 3.3% Tracker but that she would try to get the 3.1% tracker. When I mentioned that I could get UB Tracker for 2.85%(with the U First a/c, 2.95% without), she denounced this flatly as a promotional rate and that it would rise after a year.
I was talking to an UB representive earlier and they said nothing to me about this. I didnt want to push the issue with BOI as I wasnt 100% sure. Does anyone know about this or heard it before or was she just plain lying to me:mad: ??
 
or was she just plain lying to me:mad: ??

Im on this tracker rate from UB and it most certainly is not a short term promotional rate. This is the whole point behind a tracker - the bank cant decide to up the rates at a whim or when a promotion ends.

aj
 
hi,

i just spoke with BOI head office in dublin-o1 611-3333 -about lowering my 3.6 variable rate on my investment loan(130k mortgage on 330k house,17years left on 20 year mortage,) to an lower rate and i got no joy what so ever -she said i would have to talk first with my local branch loan adviser,when i mentioned ulster bank rates,2.95% she said that my loan was an investment loan and would not qualify for this rate and anyway she can't do anything until i talk to my loan officer, fair enough.-now at the moment i don't know enough about UB's rates to know if what she said was true,but i will check with UB again and then talk my loan officer with the full intention of switching to ulster bank if the rate is not reduced, i know with the above figures i should get be able to get a better rate.
i do have a question that maybe someone could advise me on-i also have another investment mortgage - 3.3 variable rate.,interest only for first 10 years,, of 285k on property worth 590k on 25 year mortgage . would that qualify for 2.95 rate? :confused:
sudden.
 
I have had no joy with BOI either. BOI mortgages said discuss with local adviser. Local adviser says she needs to speak with BOI mortgages. I get no return calls. I feel I am getting the run around. I think I will just have to go for it and switch ti UB. Tough luck BOI!!!
 
ajapale said:
or was she just plain lying to me:mad: ??

Im on this tracker rate from UB and it most certainly is not a short term promotional rate. This is the whole point behind a tracker - the bank cant decide to up the rates at a whim or when a promotion ends.

aj
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That was what i was thinking all right. Will wait for her to contact me with regard the query now before i do anything but chances are they could very well be losing another mortgage customer.
Was talking to a local business man friend last night who has been dealing with BOI for over 25 years for several mortgages and business bank a/c. He tried to get a new mortgage and the best BOI would do was 3.1% as opposed to UB 2.95%. So he said right"Im off", went to UB with the mortgage and is now thinking of moving a business a/c with substantial amount of money in it from BOI to RaboBank, where he will recieve 3% interest as opposed to 1.95% (I think is what he said :eek: )
 
Just had confirmation from BOI that they will bring me down to a 3.1% Tracker. Again they said that the the UB 2.85% was a promotional rate and that it would rise after a year. "Its just a ploy to make you change" were the exact words :mad:
I was also onto local UB and was assured that the only rise in their rate would be if/when the ECB rate rose. To be honest I would be inclined to believe UB and not BOI. Only thing with the switcher is that you have to stay with UB for a minimum of 5 years as they are paying for the solicitor and valuation fees. I am assuming that the contract you sign with UB states that they will always stay within 0.85% of the ECB rate...After all isnt this what the tracker rates are all about :confused: Could someone clarify this for me please as I think Im going slightly mad...
BOI also told me that it wouldnt be worth changing mortgages from them to Ulster bank as would only be saving about 15/20 EUR a month. Now in fairness, it might only be 15/20 EUR but its goddam better off in my pocket that in BOI, so it it. Aggorance of some people..
has anybody actually changed mortgages from someone else to Ulster bank ??
Is there alot of hassle it it ????
 
I just feel that if people are going to switch, and go through the hassle, they may as well switch to the lowest tracker available.

This is currently the <60% LTV from NIB, which is 2.79% (2.8%apr), and does not require switching current account to UB U-first, which has a monthly cost.

see my previous post on this.
 
I'm just wondering how it all adds up when you switch.

For example (I could be totally wrong on this). When you start paying off a PPR mortgage the first few years most of the monthy repayment is made up of interest and later a higher % of the repayments is made up of the actual sum of the mortgage.

So if you have all ready paid off 5 yrs of a 20 yrs mortgage you have already paid off a lot of the interest calculated on that sum up front.

If you are now to switch to another bank. They pay off your remaining balance. You take up a 15 yr mortgage (to keep things on the same time path).
Now do you have to start paying off the interest up front on the mortgage again with the new bank ... are you loosing out some how here?

if we take an example using karls caluculator
bank1 : mortgage at 3.05% 170k repayment each month = 947
term of loan 20 yrs.
paid off for 5 yrs remaining balance to pay off 146k so 15 yrs left of repayments

Bank2 :rate at 2.85% 146k repayment each month = 997.75
term 15yrs

Seems the switch will cost money?
 
I switched 2 BOI variable mortgages to 2 BOI tracker mortgages earlier this year. To my great surprise (in the past i have received very bad service from BOI and switched everything to an other bank few year ago except mortgages has it was not worth it) , BOI handled the requests and processed them very quickly, no question asked, very straight forward.
The switch does not cost anything if you stay with BOI and you are already on variable rate. Go for it...
 
giolla said:
I'm just wondering how it all adds up when you switch......

if we take an example using karls caluculator
bank1 : mortgage at 3.05% 170k repayment each month = 947
term of loan 20 yrs.
paid off for 5 yrs remaining balance to pay off 146k so 15 yrs left of repayments

Bank2 :rate at 2.85% 146k repayment each month = 997.75
term 15yrs

Seems the switch will cost money?
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Your figures are not correct:

20 yr mortgage €170000 taken out Jan 2001 @ 3.05%

Monthly Repayment €947.08

Total Interest paid after 20 yrs: €57298

If switched after 5th year:

Mortgage outstanding €136665

New 15 yr mortgage €136665 commencing Jan 2006 @ 2.79%

New Monthly Repayment €930.04

New total Interest after 20 yrs: €54233 (5yrs @3.05% +15yrs @2.79%)

A healthy saving of €3000+ in total. (€17 per mth reduction).

Has to be worth it, no brainer :) :)
 
no the calculations are not quite so straight forward.
The first 3 years of the rate were on a fixed rate which was something mad liek 6%
Then the last 3 years were standard variable 3.6%
It is only recently BOI have let us switch to tracker 3.05%.
Do the outstanding balance at the moment is still a whopping 146k

So I still think we are better off staying with BOI on the 3.05% for the remaning 15yrs.
If we switch to UB/NIB it looks like we would pay more each month. if it was 146k over 15 yrs.
But I'm still no so sure my logic is correct.
 
giolla, i was just going on the figures you quoted.

But I'm still no so sure my logic is correct.
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can't be

assuming €146K is correct redemption figure:

BoI €146K for 15yrs @3.05% = €1011p/mth Total Interest €36117

NIB €146K for 15yrs @2.79% = €993p/mth Total Interest €32842

potential savings of €3275

seems to me that having been fleeced by BoI for 3 yrs fixed @ 6% followed by a further 3 yrs being fleeced for 3.6% standard variable, you are determined to allow the same ppl to continue to fleece you for the next 15 (or is it 14 as 3+3 =6) years. go figure!!

Just so as people will not be put off shopping around and switching by your flawed logic and counting, it does pay to shop around and switch, lower interest rates always mean less money to the bank, consequently more to you, particularly when the bank you switch to, or the mortgage broker, pays the cost of switching
 
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