Key Post What has your split mortgage experience been like?

I would like to collect some information or case studies on people with split mortgages. Could you provide the following information. Rough figures will do fine.

Original split

1) Which lender
2) Date of split
3) Amount of split e.g. €200k active /€100k warehouse
4) Were you on a tracker or normal mortgage rate?
5) What age will you be when your mortgage term ends?

Progress since then
6) Current balance e.g. €170k active/€100k warehouse
6A) Current value of the house:
7) Have you kept up the full repayments on the active part?
8) Has your lender reviewed the split - if so have they moved any of the warehouse to the active
9) Have your finances improved e.g. Have you built up savings? Could you afford to pay more?
10) Have you made any overpayments? Did the bank set them off against the active part or the warehoused part?

What are your plans?
11) Are you concerned about the warehoused balance when the mortgage term ends? ( if you are concerned, check out this Key Post)
12) If you are overpaying the active part, do you intend to pay down the warehouse early?
13) Are you concerned about your credit record? Do you have any plans to borrow for a car or to get a top-up mortgage or to trade up?

If you have exited the split mortgage or traded up?

Why did you exit the split?
Tell us about your experience generally e.g. was the existence of a split mortgage a barrier to trading up?

Hi Brendan,
Here are a few answers to your questions.
1.PTSB (but later sold to Pepper)
2.2012
3.200K Active/149k Warehouse
4.Normal mortgage rate
5.65/Partner 72
Progess..
6. 211KActive/89k warehouse
7.Full repayments met on active part.
8.Reviewed yes, asked to put 10k across but refused as interest rate went up around the time (out of fix to there variable rate.. Pepper)
9.Both have 2 secure full time jobs now, could pay perhaps 200 more a month.
10.No
11.Yes, but still have 20 years remaining term to sort it out
12.I did not realise I could overpay active part, I would thought they would just transfer money out of WH if they seen I could afford to overpay.
13.No problems getting loans so far.
14.Would love to leave Pepper and transfer to new Mortgage lender, but based on my husband age we would only get a term of 15 not 20 years. Interest rates are double with Pepper, if we were with a bank with manageable rates we would be able to pay our mortgage in full.
Feel a little trapped.

Thanks

Duff, that is really interesting thanks.

You say:

3.200K Active/149k Warehouse

Progess..
6. 211KActive/89k warehouse

Click to expand...

How did the warehouse reduce by €60k?

Brendan

We had start chipping away at it when with PTSB before sold, requested with Pepper to transfer some over this year, but because they were putting there rates up they refused us.

Hi Duff

That is really helpful, thanks.

Duff123 said:

Interest rates are double with Pepper

Click to expand...

What interest rate are you paying now?

Why are you overpaying the interest-free warehouse, when you could be overpaying the active part?

Brendan

4.36% variable rate with Pepper now.

Sorry bad choice of words. We actually transfered money over to main account from warehouse(we did not physically pay it off), we were trying to get back to full mortgage repayments.

I got an email directly from a BoI customer setting out his experience.

1) He got a split in 2015
2) He got a call in 2018 to ask if his financial circumstances and changed and they hadn't. BoI was happy to continue the current arrangement and reminded him that the warehouse would have to be paid off at maturity.
3) He was worried about the warehouse and wanted to start clearing it now. (I told him to pay lump-sums against the Active Mortgage instead.)
4) He has had no problem in getting credit union loans since.

Brendan

Original split

1) Which lender - EBS
2) Date of split - 2012
3) Amount of split e.g. €200k active /€100k warehouse - aprox €180k active €87k warehouse
4) Were you on a tracker or normal mortgage rate? Normal
5) What age will you be when your mortgage term ends? 64

Progress since then
6) Current balance e.g. €159k active €83k warehouse (reduced after 5yrs as paymwnts up to date)
7) Have you kept up the full repayments on the active part? Yes and pay €100 extra per month
8) Has your lender reviewed the split - if so have they moved any of the warehouse to the active - Once nothing changed
9) Have your finances improved e.g. Have you built up savings? Could you afford to pay more? - Yes and yes
10) Have you made any overpayments? Did the bank set them off against the active part or the warehoused part? I rang the bank last year to start making payments against the Warehoused part but they said it made more sense to pay of the active part so we just pay €100 extra p/m.

What are your plans?
11) Are you concerned about the warehoused balance when the mortgage term ends? No between pension, savings and inheritance we should be ok
12) If you are overpaying the active part, do you intend to pay down the warehouse early? Saving to pay it off
13) Are you concerned about your credit record? Do you have any plans to borrow for a car or to get a top-up mortgage or to trade up? YES! My IBC looked fine but I applied for an An Post loan online (just out of curiosity and was declined straight away). If i exited the split mortgage how long would it take to repair my credit rating, I have no other loans / credit cards and no other credit issues. I would love to trade up in the next 3-5 years but just don't know how realistic that is.

If you have exited the split mortgage or traded up?

Why did you exit the split?
Tell us about your experience generally e.g. was the existence of a split mortgage a barrier to trading up?

MrsSummertime said:

1) Which lender - EBS
2) Date of split - 2012

Click to expand...

Hi Mrs Summertime

You should urgently check the letter you got offering you the split.

AIB had a clause which gave people who overpaid lump sums off the warehouse within 10 years, a 20% additional credit. In other words, if you pay off €1,000, they will reduce the warehouse by €1,200.

If that is in your offer, then you need to consider if it's worth doing. Should you pay €1,000 off the active part and save 3% a year for the remaining term, or get 20% up front. It would depend on how long is left and what your plans are.

Brendan

MrsSummertime said:

13) Are you concerned about your credit record? Do you have any plans to borrow for a car or to get a top-up mortgage or to trade up? YES! My IBC looked fine but I applied for an An Post loan online (just out of curiosity and was declined straight away). If i exited the split mortgage how long would it take to repair my credit rating, I have no other loans / credit cards and no other credit issues. I would love to trade up in the next 3-5 years but just don't know how realistic that is.

Click to expand...

I don't want to take this thread off topic with one particular case. Could you start a new thread with all the details. Value of your home. Salary. Savings and investments, etc.

Update: Mrs Summertime has posted her case study here:


Brendan

Original split

1) Which lender PTSB, since sold to Pepper
2) Date of split 2013
3) Amount of split €175k active, €82k warehouse
4) Were you on a tracker or normal mortgage rate? Normal, currently 3.7%
5) What age will you be when your mortgage term ends? Myself 65, himself 72

Progress since then
6) Current balance e.g. €170k active/€100k warehouse Currently €152k active, €82k warehouse
7) Have you kept up the full repayments on the active part? Yes
8) Has your lender reviewed the split - if so have they moved any of the warehouse to the active Yes, Pepper reviewed 2021 and 2020. No change.
9) Have your finances improved e.g. Have you built up savings? Could you afford to pay more? Yes, yes.
10) Have you made any overpayments? Did the bank set them off against the active part or the warehoused part? No, no.

What are your plans?
11) Are you concerned about the warehoused balance when the mortgage term ends? Yes
12) If you are overpaying the active part, do you intend to pay down the warehouse early? n/a
13) Are you concerned about your credit record? Do you have any plans to borrow for a car or to get a top-up mortgage or to trade up? Recently borrowed from the credit union for house extension with no issue.

If you have exited the split mortgage or traded up?

Why did you exit the split?
Tell us about your experience generally e.g. was the existence of a split mortgage a barrier to trading up? No plans to trade up, like the location and neighbours etc. but needed to extend. Borrowed from the CU and overpaying this loan to clear as quickly as possible.

Rough plan was to clear CU loan, take back warehouse mortgage to pay full and switch to another provider for better rate. Getting the impression from reading here that another bank will be unlikely to take us on so perhaps leave the warehouse and save the balance instead? Or overpay active mortgage if Pepper agree? Grateful for any advice.

That is very helpful. Thanks.

Absolutely clear the Credit Union loan first.

capslock said:

€152k active, €82k warehouse

Click to expand...

€152k @3.7% = €5,600
€82k @0%

Total interest: €5,600
Total mortgage: €234k
Average interest rate: 2.4%

So, you should not be moving the warehouse to the active loan now so that you might get a cheaper loan after 5 years.
€82k @3.7% would be €3,000 a year in extra interest.

After clearing the credit union loan, pay down the active loan. This saves you 3.7%.

Brendan

1) Which lender AIB
2) Date of split 2013
3) Amount of split e.g. €200k active /€100k warehouse €350k/€250k
4) Were you on a tracker or normal mortgage rate? normal
5) What age will you be when your mortgage term ends? 68

Progress since then
6) Current balance e.g. €170k active/€100k warehouse
7) Have you kept up the full repayments on the active part? Yes
8) Has your lender reviewed the split - if so have they moved any of the warehouse to the active - yes/no
9) Have your finances improved e.g. Have you built up savings? Could you afford to pay more? - no
10) Have you made any overpayments? -no
Did the bank set them off against the active part or the warehoused part?

What are your plans?
11) Are you concerned about the warehoused balance when the mortgage term ends? Yes
( if you are concerned, check out this Key Post)
12) If you are overpaying the active part, do you intend to pay down the warehouse early?
13) Are you concerned about your credit record? Yes
Do you have any plans to borrow for a car or to get a top-up mortgage or to trade up? Yes
If you have exited the split mortgage or traded up? No
Why did you exit the split?
Tell us about your experience generally e.g. was the existence of a split mortgage a barrier to trading up?

I would be interested in some more updates on experience with split mortgages.
I have also added in a figure for the current value of the property.

Brendan