Are we looking at a Mortgage Rates Price War?


#81

i bclosed on a new house in Dec 16, i have just completed my 3rd mortgage switch,

Originally went with EBS, took 2% cash back, 3.5% variable
5 months later switch to BOI, took 2% cash back, 3% fixed
Recently switched to UB, 2.5% fixed over 5 years, 1.5k cashback to cover legal fees

so it can be done and its pretty easy, obviously more worthwhile the bigger the morgtgage is as the legal fees are a fixed cost.


#82

Wow.
gets finger out


#83

To be fair, it looks like you’ve only completed two switches? The original mortgage on the property wouldn’t be a switch?

It’s my understanding that banks have started to refuse switches where you’ve been with incumbent less than 12 months. There is a level of effort too switch and I’m personally not willing to commit effort in case this policy becomes more widespread. We may look to switch in 11 months time. Just completed our first switch.


#84

sorry two switches, i have drawn down 3 mortgages in 15 months.

obviously banks arent refusing switches as evidenced above, and it takes a few hours, well worth it if you are getting 5 figure cash back sums.


#85

I was looking for the switcher policies but hard to come by. If you had to stay for an extended period the higher interest and the income tax implications of cash back start to make it unattractive.


#86

The time restrictions on switching are new, and it has been said that they should be scrutinised by Central Bank as they discourage switching.


#87

income tax implications?


#88

I guess you could argue it was a refund of the interest you paid?


#89

Yeah, I looked into it before and there are no tax implications I am aware of. IANAL.


#90

With the current interest rates available I was looking at potentially switching but as I am on a fixed rate I am trying to work out the break fee. I have the formula but missing two of the inputs.

Hoping someone can point me in the right direction.

Two parts of equation in particular:
(i) the annual interest rate which was the cost to the bank of funding the outstanding loan amount for the originally intended fixed term period.

(ii) the annual percentage rate available to the bank for a deposit of the outstanding loan amount for the remaining fixed rate period.

It may well be that only the bank will have the relevant details (particularly (i) above).

If so, anyone contacted bank before and do they provide you with the calculations or just a figure?


#91

Normally they just give you a figure

When did you fix originally and who are your bank


#92

I was thinking they would just give a figure but considering the tracker issue along with other issues that dont reflect well on banks capability/integrity what is stopping them from overinflating the fee to break?

Fixed with bank of ireland two years ago at end of April


#93

Get the number from the bank.
Then reverse engineer it.


#94

If you fixed two years ago it shouldn’t be a big number boi can give it to you over the phone immediately in my experience


#95

Yes would be possible to reverse engineer it once i get the figure but I supoose I’m wondering if/how it would be possible to validate their inputs above.

I am sure it would be fine but I suppose im wondering what is stopping the bank overstating the amount in order to influence the decision customers are making.


#96

independent.ie/business/per … 96261.html

Probably.


#97

This mortgage rates war really seems to have stalled last 6 months.

Some fixed rates dropping slightly but last chunky variable rate drop was AIB last November or so


#98

Think it was a phoney war to sucker people into fixing before the ECB rate increase (which is god knows when)


#99

Just a quick update for others on a fixed rate, the cost of me breaking out of my fixed rate with BOI ws €92.I shortened my term by a number of years with the same monthly repayments (and that exludes the 2% cash back).

Well worth switching even if on a fixed rate.


#100

Hi Turkish,

BoI have quoted me a break fee of €775 and I have one year to run on my fixed rate. Which fixed rate are you on with them? Even with this penalty it is still worth my while moving for 2% cash back I think.