Key Post Tips for switching your mortgage

qwerty5

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252
OK a moderator created this thread from a comment I made on another thread. So I might as well make it something relevant.

I'm switching at the moment. It's a pain but it's not rocket science so I'll put down what my bank asked me for and what you probably need to be thinking about if you're thinking about switching. I'm half way through a switch so this may not be complete as my bank may think of new interesting questions to ask me.

1: Get a solicitor. This is easy. Ring around your local guys and ask them their fees for covering a switch. I got quoted €800. I haven't completed my process yet so I'll update this when I actually pay this. Your bank will ask for your solicitors name and address. Edit: At the end of this process I got an invoice for €948

2: They'll want bank statements. I was asked for the last 6 months for myself and my wife. So make sure your accounts are tidy enough for at least 6 months.
One bank I applied for searched all of their accounts for my name and queried me about an account that my name was attached to for a company account. I had assumed this wasn't relevant at all. It was to him. So if in doubt, ask your advisor.

3: They'll want credit card statements. Having some debt on your credit card is not hugely bad unless it's at the limit and never paid off. In my situation we're 10 years into our repayments and our situations have improved so I think we're more attractive for an underwriter. The advisor said that having a debt on a credit card just means they'll take off something like 2 times (don't quote me on that, it was so small that I didn't care) the debt from the max amount you could borrow. As we should be well below the max amount we can borrow plus I only had a couple of hundred debt on my card I didn't care too much about it.

4: They'll want salary certs for all applicants. Your employer will sign this no hassle. If you're in probation forget about applying anywhere. Just wait until the probation period is over.

5: They'll need statements for your mortgage. I was asked for the last two years original statements. This is easy to get. Just ring your old mortgage company.

6: They'll need copies of passport & driving license.

7: Utility bills showing a name of each applicant. This was a bit of hassle as all the bills are in my name at home. It's not too hard to fix though. I just contacted a provider and added my wifes name to a bill. It's not something that happens immediately though so if you're applying and youre in the situation I was in ring your Gas or Electricity or Internet provider today so your next bill will be the one you use.

8: Property valuation. They'll want somebody they know to value your house. This cost me €95 and the guy came out and did it in 20 minutes. Note: for your initial application (before approval) you don't need a valuation but you should have a ball park figure of what your property is worth. Use the property register to find properties in your area that may have sold recently.

9: Deed of assignment of life policy. You have to tell your life insurance that your switching to a new bank. I just rang my insurance company this morning about this. They said they just need a letter from the bank and that this is no problem.

10: Notice to your house insurance that the new bank has an interest in your house. This is a form that the bank provided me.

11: Direct debit mandate. For repayments.

12: Once the mortgage has gone through keep a track of your deeds. I rang my new bank a couple of months after the mortgage was completed. They didn't have the deeds. I rang the old bank who said they sent them on. I rang the solicitor and they told me that they're "pending before the land registry which will take six months". This wasn't information that was given to me. Had to go chasing.

13: You may need a NPPR cert. If you owned the property between 2009 - 2013 you'll have to apply to your local council for this. It's free but it's a pain in the hole too. You have to send in letters / bills from 2009 - 2013 to prove you lived in your house.

14: My solicitor asked for a valid BER cert. I don't know why but they wouldn't budge so if you have one, keep it handy. You shouldn't really be asked for this though. Ask your solicitor at the start of the process so if they say you'll need it you will know if you need to go to somebody else.

15: My solicitor asked for proof that Irish Water was paid up to date. They were, but this was another thing I had no clue why there were asking for it.
 
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qwerty5

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252
There have been a few posts with people wondering if it's worth their while switching their mortgage. I spent an hour last night messing around with Excel to check how much I can save with the current vendors.

Basic info. I'm with KBC now. For these numbers I'm taking it as 23 years left. Approx €250K on the mortgage. I'm taking 5 years at the period I'm looking at for these numbers. After that the rates could be different so might be worth switching again. In the numbers below I'm assuming €1000 switching fee. I was quoted €800 by my solicitor and €95 for my first valuation.

KBC Current Mortgage
4.05% interest. €48228.82 interest over 5 years.

If I switch to a KBC fixed rate for 3 years and assume I can fix again for 3.9%
€46442.57 interest. A saving of €29.77 a month. I'm not going to fix with KBC but maybe somebody would like this if they didn't want the hassle of switching (or saving a lot more money).

If I switch to BOI and fix for 3 years at 3.6% then go to 4.1% for the remaining 2.
€45195.34 interest.
But take off the €1000 switching fee and add the €5000 BOI that works out at a saving of €117.22 per month. BOI will take back the €5000 bonus if you switch again in less than 5 years.

Or if I switch to AIB and assume 3.55% for the next 5 years.
€42,274.65 in interest.
Taking into account the €1000 switching fee that saves me €82.75 a month. Not as good as BOI but I'm not locked in for 5 years if I want to switch again.

For Ulster Bank it's 3.2% for the first 3 years and then 3.5% for the next 2.
$39,501.89 interest over the 5 years.
Taking into account switching fee of €1000 and a bonus that UB give of €1500 for switching that'll save €153.78 a month.

Finally I had a look at the "new entrant" that's being mooted. Guessing (hoping) that they might go for 3% that means the interest over 5 years is €35725.05
and a saving of €241 a month.

So in answer to any question of is it worth switching from KBC if I'm on the 4.05% rate then the answer is, you can switch to any of the main guys and you'll save money.

The next question is should I switch now or should I wait for this new entrant. I don't know. The optimistic say they may be doing business in a couple of months. Knowing my luck I could be sitting here next year still waiting for them while KBC are happily taking my money.

If my calculations are wildly incorrect let me know.
 

Brendan Burgess

Founder
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38,646
Qwerty

Thanks a lot for that.

Anyone thinking of switching at some stage in the future but who might not be ready for it now, should do the following immediately.

1) Check your ICB record - just in case there is an error on it. Fix it now ahead of applying for a mortgage.
2) If it's a joint mortgage, make sure that there are utility bills in both names. Switch an account to joint names if needed.
3) Ask your existing lender to reduce the rate you are charging. Bank of Ireland will do this if they think you might leave.
4) Don't fix your mortgage rate or you won't be able to switch until the fixed period is up.
5) Read Liam Ferguson's excellent post: Preparing for a mortgage application Here are some key extracts relevant to switchers:
  • Don't change job until you have switched
  • Don't go overdrawn on your current account
  • Keep your credit card in good order
  • Don't make transfers to a betting account
  • Consider taking a break for making AVCs to boost your immediate finances
 

sahd

Frequent Poster
Messages
766
If my calculations are wildly incorrect let me know.
Was PTSB missed out for any particular reason?

Also.... do you need to take into account the different outstanding capital amounts ? This could be important if you might switch again. The capital outstanding after 5 years at 4.2% would be about €4000 more than that remaining after 5 years at 3.2% . (I know this complicates things more) .
 

qwerty5

Frequent Poster
Messages
252
Was PTSB missed out for any particular reason?
Nope. Just got fed up. Hadn't really considered PTSB. Their fixed rates aren't attractive and their variable is good in year one and then not great after that.

Also.... do you need to take into account the different outstanding capital amounts ? This could be important if you might switch again. The capital outstanding after 5 years at 4.2% would be about €4000 more than that remaining after 5 years at 3.2% . (I know this complicates things more) .
I've done something wrong so. I've used the same capital for all of the comparisons.

Edit:
I've just had a look at
https://www.drcalculator.com/mortgage/ie/
and threw the numbers in there and then put them on my spreadsheet.

Yep. It seems you pay off more capital if the interest rate goes down. Assuming 251,401.77 is my balance now, after paying off KBC for 5 years at 4.05% I'll have paid off €37266.95 the outstanding amount. If I fixed at 3.9% Id have paid off €37798.43. Does that seem right to you?
If it does, I'll go back to the drawing board for the other ones.
 
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sahd

Frequent Poster
Messages
766
I've done something wrong so. I've used the same capital for all of the comparisons.

Edit:
I've just had a look at
https://www.drcalculator.com/mortgage/ie/
and threw the numbers in there and then put them on my spreadsheet.

Yep. It seems you pay off more capital if the interest rate goes down. Assuming 251,401.77 is my balance now, after paying off KBC for 5 years at 4.05% I'll have paid off €37266.95 the outstanding amount. If I fixed at 3.9% Id have paid off €37798.43. Does that seem right to you?
If it does, I'll go back to the drawing board for the other ones.
Those figures seem right.

It is maybe something to think about if there is a possibility of switching again in a few years.
It might make those cashback offers look less attractive?
 

Dauhee

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Messages
117
I use this simple calculation - daily interest = mortgage remain * interest rate (i.e. 0.035) / 365

So 250k mortgage at interest rate of 3.5% = 23.97 a daily interest.

By reducing interest rate to 3.1%, interest drops to 21.23 daily (yearly saving of 1k, or effective 2k of salary)
 

Eureka101

Registered User
Messages
28
hi querty5

i am in the process of switching and require a solicitor,

I see your quote of €948 which compared to my quote of €1888 is very competitve!

Are you or anyone on here able to recommend a solicitor to me?

I am in Dublin.

Much appreciated! :)
 

Gordon Gekko

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To get around not having anything in your wife's name, it's a good idea to call Revenue and ask for a Tax Credit Certificate for her.
 

Foobar

Registered User
Messages
32
@qwerty5 This is great, thanks for sharing. Just curious on how you found a solicitor? Did you just keep it local or did you search online. I'm getting quotes for 2000 for buying a house. Seems like a lot?
 

fme

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Messages
59
Based on our protracted switch from BOI to Ulster Bank over the last 4 months, one more thing i would recommend to do if thinking of switching is to start one or two regular savings accounts - even for small amounts < 100 per month is very useful. this is for their stress test. We struggled a bit to provide this, even going as far as showing the kids e20 per month credit union accounts!
One other useful point not often mentioned about switching is that because it can take several months, you can end up with a small lump sum based on the 3 or 4 months mortgage payments made during the process. This has come in very handy...
 

renter45

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Messages
106
Im getting quotes of €150 incl vat for a valuation for switching purposes. I've queried with BOI why they want it, given they have 3% fixed rate regardless of LTV, and access to property price register, reply was "we just need it"
 

arbitron

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Messages
163
Im getting quotes of €150 incl vat for a valuation for switching purposes. I've queried with BOI why they want it, given they have 3% fixed rate regardless of LTV, and access to property price register, reply was "we just need it"
They have to confirm that you're not in negative equity.
 

misemoi

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Messages
136
We just switched to AIB. They were fine with me being on probation as we had low lti and ltv. Switched to EBS while I was on a temp contract too with no issues. AIB told me they have to arrange the valuation because of CB rules, but we pay for it at 150. The valuation report had the reinstatement cost of our home 20k higher than our insurance, so we needed to get that upgraded, luckily at no extra cost. Also ensure your life assurrance balance and duration is sufficient for your new mortgage and term.
 

mojoask

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Messages
83
How does one get around the chicken & egg situation that Bank A won't relinquish it's interest in the mortgage protection policy until the balance is cleared, and Bank B won't allow draw down until the mortgage protection policy is assigned to them?
 

Coldwarrior

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Messages
170
How does one get around the chicken & egg situation that Bank A won't relinquish it's interest in the mortgage protection policy until the balance is cleared, and Bank B won't allow draw down until the mortgage protection policy is assigned to them?
Your solicitor can give an undertaking to transfer the policy over to the new bank once the old mortgage has been cleared. That or get a new policy, life insurance has apparently gotten cheaper over the last few years.
 

mojoask

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Messages
83
Do all banks accept a solicitor's undertaking? Seems crazy to have to take out a new policy for a situation like the above.
 
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