What happens if fixed rates rise before I have switched?

[Beatrice81]

Hi- new to the forum so I’m not sure if I’m writing this in the right place. Currently in the process of switching mortgages and obviously trying to do so as quickly as possible in order to secure a good fixed rate. However; the process is obviously quite lengthy and I’m wondering if anyone can explain to me at what stage of the process will we be guaranteed the rate that we are currently looking at. We have undergone the initial application which has been approved and our house valuation has taken place. I’ve been informed today that our loan agreement should be issued very soon but is there still a long legal process which could delay everything? I really want to avoid our new rate going up by 0.25% in the next month or two but obviously it’s out of our hands now. Any help anyone could give would be greatly appreciated
Thank you
Beatrice81

 

[Paul F]

@Beatrice81 Who is your current lender and who are you switching to?

There is generally no way to "lock in" a particular interest rate while you are in the process of switching. The rate you get is the rate that the new lender is offering at the time of drawdown.

Edit (12 August 2022): When Avant announced their rate increases to take effect from 15 August 2022, the only people who could avoid the increase were those who received a letter of offer before that date. And they had to draw down by 9 September 2022.

 

[Beatrice81]

We are kbc and switching to tsb. We are on a 2.3% interest rate at present and after doing a lot of research; the only bank offering a more competitive fixed rate was TSB (avant etc wasn’t an option as our loan to value is still quite high!)
We have started the process but I’m worried that the current fixed rates that TSB are offering may change considerably in the coming months and we end up on the same rate but having spent all the money and time on legal costs!
We’ve just been quoted approx €1670 for solicitors fees! Does this seem very expensive?
Beatrice81

 

[Paul F]

We are kbc and switching to tsb.

While PTSB might look like good value, when your fixed rate with them ends you will only be eligible for their high interest rates – because they discriminate between new and existing customers.

We are on a 2.3% interest rate at present and after doing a lot of research; the only bank offering a more competitive fixed rate was TSB (avant etc wasn’t an option as our loan to value is still quite high!)

Consider posting your mortgage details in the switcher thread (in the format shown in the first post). I'll estimate the savings you would make from switching to different lenders.

We’ve just been quoted approx €1670 for solicitors fees! Does this seem very expensive?

Yes – €1,300 including VAT and outlays should be achievable. Some people have got even lower quotes.

 

[javiercarrillo]

I was also curious when I read my offer letter. We understand it is "legally binding" (right?) yet they say that the rates might change when we drawn down the mortgage. What happens if we signed the letter for x% and then, at draw down they want double that? Are we obliged to follow through?

 

[Paul F]

@Cavangal (who has her mortgage with Permanent TSB) posted the following in another thread:

I received options from PTSB by post and decided to fix for 7 years at 3%.The rates are valid for 30 days.

Obviously this only applies to PTSB customers who are thinking about re-fixing, but requesting a rate options letter from them will give you 30 days where their rates are guaranteed not to change (for you).