I do like the approach, but what do these terms actually mean?
But those weightings seem totally subjective.Here's a bit more about the ranking system, I do think it helps think about things in a more rounded way, although not perfect and each customer is different. We have been using as a framework for new advisors to get away from just thinking about introductory rate.
Rate (30%): We base this on APRC (I'm not a fan of using intro rate as has been discussed elsewhere.) Getting the best interest rate over the whole term of the mortgage is critically important, some providers push cash back or a low introductory rate to trick customers into signing up to higher long term rates that will cost thousands more in interest and you may not be able to switch/fix again later in the term (see next point).
Security (30%): The longer you fix for the longer you cap your repayments for. This means removing the risk you will lose your home if interest rates spiral out of control. You should fix for as long a period as you can if you want to make sure you can afford your payments longer term.
Even if these cost a little more in the short term we recommend these products for most customers for the certainty it provides.
My take is we are likely to be in an era of high interest rates for the foreseeable, whether I'm right or not it is prudent for homeowners to assume this is the case to avoid putting their home at risk. There is real value to fixing long term for most, hence the high weighting.
Approval (20%): Different lenders have different credit rules, we take a view on each lenders policy and process, also having access to a broker is crucial in ensuring that you are likely to get your mortgage approved.
Speed (20%): Lender approval times vary wildly from 1 month to 6 months. With interest rates rising having a lender that is likely to approve you quickly can be critical to securing the best rate. We weighting this more highly as a factor as a result.
Hope that clarifies the approach a little.
Rating Weighting: Rate 30%, Security 30%, Approval 20%, Speed 20%
Rate (30%): We base this on APRC (I'm not a fan of using intro rate as has been discussed elsewhere.) Getting the best interest rate over the whole term of the mortgage is critically important, some providers push cash back or a low introductory rate to trick customers into signing up to higher long term rates that will cost thousands more in interest and you may not be able to switch/fix again later in the term (see next point).
Security (30%): The longer you fix for the longer you cap your repayments for. This means removing the risk you will lose your home if interest rates spiral out of control. You should fix for as long a period as you can if you want to make sure you can afford your payments longer term.
Even if these cost a little more in the short term we recommend these products for most customers for the certainty it provides.
But do brokers actually have access to all the lenders?Anyone thinking about a new mortgage, fixing or switching should therefore talk to a broker (pick one who has all the lenders and will give a free consultation)
Whether a person uses a broker or not, it is very important that they or the broker apply to several lenders at the same time, get approval in principle from as many of them as possible, and do as many of the subsequent steps as possible before you have to tell your solicitor which lender to try to get full approval (a letter of offer) from.Anyone thinking about a new mortgage, fixing or switching should therefore talk to a broker (pick one who has all the lenders and will give a free consultation) to get the best advice for their own circumstances. If switching they should also ask the broker about the deal they would get by fixing with their current lender.
But do brokers actually have access to all the lenders?
For example, are you an intermediary for AIB & EBS, or just Haven?
But what about somebody who is taking out a mortgage now but who thinks they will (or might) move in the next few years? A long fixed period could leave them with a very high break fee when they move home. Borrowers need to be made aware of this downside to fixing for a long period, and so "Security" (the word needs to be changed, at the very least) may be misleading in a rating system.Security (30%): The longer you fix for the longer you cap your repayments for. This means removing the risk you will lose your home if interest rates spiral out of control. You should fix for as long a period as you can if you want to make sure you can afford your payments longer term.
Even if these cost a little more in the short term we recommend these products for most customers for the certainty it provides.
My take is we are likely to be in an era of high interest rates for the foreseeable, whether I'm right or not it is prudent for homeowners to assume this is the case to avoid putting their home at risk. There is real value to fixing long term for most, hence the high weighting.
Thanks Brendan, Yes something like that makes sense, maybe "Rate Fix" or "Rate Stability" would work. Will review this one.You need to change the word "security" which is misleading. Something like "term length" would be more appropriate.
Thanks RedOnion worth clarifying this point, no broker can package for AIB or EBS. For EBS that's not much of a loss, as they aren't generally very competitive. Haven are generally similar to AIB, being part of the AIB group, bar at lower LTV's. So AIB are the one non broker lender worth a look if you are on the lower LTV end.But do brokers actually have access to all the lenders?
For example, are you an intermediary for AIB & EBS, or just Haven?
I'd beg to differ. Since November, Havens pricing is closer to EBS than AIB. EBS rates are generally 10bps higher, but customer receives cashback. So EBS is better than Haven in my books.For EBS that's not much of a loss, as they aren't generally very competitive. Haven are generally similar to AIB, being part of the AIB group, bar at lower LTV's.
Hi RedOnion, understand your point entirely this is the difference between intro rate and long term raising its head again. If you consider only introductory rates you are on the money, but I'm very much against getting into bed with lenders with high follow on rates like EBS due to the risk factors when you come off those rates.Since November, Havens pricing is closer to EBS than AIB. EBS rates are generally 10bps higher, but customer receives cashback. So EBS is better than Haven in my books.
| 3 Year Fixed Mortgage Rates | up to 50% LTV | up to 60% LTV | up to 70% LTV | up to 80% LTV | up to 90% LTV |
| Avant Money Mortgage | 3.25% | 3.25% | 3.30% | 3.35% | 3.40% |
| ICS Mortgages | 4.75% | 4.75% | 4.95% | 4.95% | 5.05% |
| Finance Ireland Mortgage | 5.45% | 5.45% | 5.50% | 5.50% | 5.85% |
| Haven Mortgages | 3.35% | 3.35% | 3.35% | 3.35% | 3.35% |
| AIB Mortgage | 2.85% | 2.95% | 2.95% | 2.95% | 3.05% |
| EBS Mortgage | 3.75% | 3.75% | 3.75% | 3.75% | 3.75% |
| Permanent TSB Mortgage | 3.15% | 3.15% | 3.25% | 3.25% | 3.85% |
| Bank of Ireland Mortgage | 3.25% | 3.25% | 3.25% | 3.25% | 3.25% |
There's something wrong with your AIB rates there. Looks like you used old rates?If you look at the APRC comparison for the 3 year rate
Not if you look at their 4 Year or 5 year rates. Guess what? They match, or beat, Avant for higher LTVs.Factoring this in makes EBS one of the worst lenders in the market for value.
AIB, Haven and EBS have had identical rate increases (0.5%) in both October and November, so the differences between their rates haven't changed at all for a few years.Since November, Havens pricing is closer to EBS than AIB. EBS rates are generally 10bps higher, but customer receives cashback. So EBS is better than Haven in my books.
For what it's worth, Haven's 7- and 10-year fixed rates are significantly better than AIB's (at all LTVs, but especially at higher LTVs). And they will give you €5,000 cashback (on all of their fixed rates except their green rate) if you borrow €250k or more.For anyone <80% LTV, AIBs direct rates come out ahead of Haven.
EBS don't have "intro rates" – they offer the same rates to both new and existing customers. They do however give large amounts of cashback to new customers, which partly explains why their rates are high.Hi RedOnion, understand your point entirely this is the difference between intro rate and long term raising its head again. If you consider only introductory rates you are on the money, but I'm very much against getting into bed with lenders with high follow on rates like EBS due to the risk factors when you come off those rates.
Thanks Paul, I just had the latest rates to hand and couldn't remember the history.AIB, Haven and EBS have had identical rate increases (0.5%) in both October and November, so the differences between their rates haven't changed at all for a few years.
Thanks for spotting this, you're right the rest of the rates where ok, but the AIB ones were old ones table updated apologies, AIB are now a bit worse as a result (I was making the broker option with Haven look worse than it should haveThere's something wrong with your AIB rates there. Looks like you used old rates?
| 3 Year Fixed Mortgage Rate APRC | up to 50% LTV | up to 60% LTV | up to 70% LTV | up to 80% LTV | up to 90% LTV |
| Avant Money Mortgage | 3.11% | 3.11% | 3.12% | 3.39% | 3.41% |
| ICS Mortgages | 4.90% | 4.90% | 4.92% | 5.15% | 5.18% |
| Finance Ireland Mortgage | 5.11% | 5.26% | 5.27% | 5.27% | 5.54% |
| Haven Mortgages | 3.30% | 3.30% | 3.30% | 3.30% | 3.30% |
| AIB Mortgage | 3.00% | 3.00% | 3.00% | 3.17% | 3.35% |
| EBS Mortgage | 3.80% | 3.80% | 3.80% | 3.80% | 3.80% |
| Permanent TSB Mortgage | 3.63% | 3.63% | 3.77% | 3.77% | 4.00% |
| Bank of Ireland Mortgage | 3.80% | 3.80% | 4.00% | 4.00% | 4.20% |
No reason, here is the same table for the 4 year rates which still show similar outcomes. EBS still look very poor value, due to their super high variable rates which I'm not a fan of at all.Why are you cherry picking 3 years? Why not pick a term AIB are actually competing with?
| 4 Year Fixed APRC Comparison | up to 50% LTV | up to 60% LTV | up to 70% LTV | up to 80% LTV | up to 90% LTV |
| Avant Money | 3.19% | 3.19% | 3.21% | 3.45% | 3.48% |
| Haven Mortgages* | 3.2% | 3.2% | 3.2% | 3.2% | 3.2% |
| AIB | 3.17% | 3.34% | 3.34% | 3.34% | 3.50% |
| Permanent TSB | 3.49% | 3.49% | 3.49% | 3.49% | 3.75% |
| EBS | 3.6% | 3.6% | 3.6% | 3.6% | 3.6% |
| Bank of Ireland** | 3.1% | 3.3% | 3.5% | 3.5% | 3.8% |
It's a blunt instrument all right, but the best one we have to sum up the long term cost of credit for the customer. The weakness in it is obviously that the variable follow on rates are just that, variable. So in theory a lender can change them willy nilly, however in practice variable rates pricing strategy stays pretty stable over time. So we can actually forecast pretty confidently that a lender with high variables will stay high relative to the rest of the market and a lender with low will stay low.In my personal opinion, APRC is completely meaningless in the current environment.
Agree Brendan, I think this would be something that might be useful to have on the forum as a starting point for people in addition to the best buys. No matter how scientific we try to be it will be subjective and individual cases will vary, the AskAboutMoney version will obviously therefore differ from the way we see it @moneysherpa, but I think it would be helpful.But maybe that table without the total score would be a good idea e.g.
There is no scientific/objective basis to the original weightings as far as I can see and as I have mentioned already. As such, they seem pretty useless to me.No matter how scientific we try to be it will be subjective and individual cases will vary
Real data doesn't back that up. For lenders who offer proper fixed rates to their existing customers, the customers refix.Most consumers don't switch or re fix at the end of their fixed term, they roll off onto the variable.
So we'll ignore the fact that existing customers can refix at new business rates?EBS still look very poor value, due to their super high variable rates which I'm not a fan of at all.
So your top 4 goes to a lender with absolutely no track record, where we can't actually forecast anything?So we can actually forecast pretty confidently
In my personal opinion, APRC is completely meaningless in the current environment. We have no idea what actual rates will be available to customers at the end of their fixed rate period.
It's a blunt instrument all right, but the best one we have to sum up the long term cost of credit for the customer. The weakness in it is obviously that the variable follow on rates are just that, variable. So in theory a lender can change them willy nilly, however in practice variable rates pricing strategy stays pretty stable over time. So we can actually forecast pretty confidently that a lender with high variables will stay high relative to the rest of the market and a lender with low will stay low.
So your top 4 goes to a lender with absolutely no track record, where we can't actually forecast anything?
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