60pc mortgage holders can avoid ECB rate increases

boardsdotie

60pc mortgage holders can avoid ECB rate increases
Irish Independent Friday October 6th 2006


SOME mortgage holders may be able to counteract yesterday's interest rate rise by contacting their lender and getting a cut in their rates. Most people qualify for lower interest rates when they borrow less than 60pc of the value of the home, and surging house prices mean most borrowers now owe the bank less than 60pc of the value of the property.

Depending on the lender, many borrowers can request a reduction of between 0.15pc (€30 per month on a €250,000 mortgage) and 0.25pc (€50 a month) from their lender, IFG Mortgages said last night.

Most first and second-time buyers borrow between 80pc and 100pc of the value of the property.

But, with property values rising at more than 15pc a year, it only takes two or three years before the loan to value has dropped to below 80pc or even 60pc.

Alternatively, consumers can counteract the latest rates hike by opting for a free switch to another lender if a lower rate is not available with their existing lender.

Some switcher deals are even more attractive with discount trackers offering up to 0.75pc, which equates to over €150 per month on a €250,000 mortgage.

According to Suzanne McGuinness of IFG: "While most of us struggled to qualify for our original mortgage, with a three- to five-year track-record behind us, most banks are now lining up for our business, so ultimately it has never been easier to strike a better deal with your own lender or to switch to another lender."

Meanwhile, Bank of Ireland has dropped the rate on its five and ten-year fixed mortgages, as rising interest rates have forced banks to be more competitive.

The five-year rate is down from 4.89pc to 4.85pc, and the ten-year rate has dropped from 5.19pc to 4.99pc.

The move comes as competitor AIB has offered first-time buyers a €2,000 inducement to take out a mortgage with it.

Charlie Weston

slave1

Most people qualify for lower interest rates when they borrow less than 60pc of the value of the home

Would appreciate if someone could point to the source of this and the lenders applicable.
With NIB myself, less than 60%

Sponge Bob

NIB tracker IS the cheapest (I think) at about .75 over base on less than 60% LTV

boardsdotie

slave1 wrote:

Would appreciate if someone could point to the source of this and the lenders applicable.
With NIB myself, less than 60%

Source : Irish Independent (in the OP)
Institutions : All

However only applicable to Variable Rate Customers.

I fixed at 4.89 with BOI last month for 5 Yrs.
Fixed Rates are Non-Negotiable.:(

Bulmers

Just wondering what's peoples views on the new mortgage offer from Bank of Scotland, the ECB tracker rate one. Currently with AIB, just out of 3 yr fixed at 4.2 but think i will switch to this, rang AIB to get info on the mortgage for the app form but they said i was mad doing it that it would cost more, when she explained, to be honest didn't understand as was in a rush. I had a 30tr mortgage and with BoS, it's knocked down to 25yrs and paying less, i realise i'm on bonus rate for 2 yrs but i still think it's good.

Also, my LTV is approx 50%.

copacetic

Bulmers wrote:

Just wondering what's peoples views on the new mortgage offer from Bank of Scotland, the ECB tracker rate one. Currently with AIB, just out of 3 yr fixed at 4.2 but think i will switch to this, rang AIB to get info on the mortgage for the app form but they said i was mad doing it that it would cost more, when she explained, to be honest didn't understand as was in a rush. I had a 30tr mortgage and with BoS, it's knocked down to 25yrs and paying less, i realise i'm on bonus rate for 2 yrs but i still think it's good.

Also, my LTV is approx 50%.

indo today says that NIB are about to launch a tracker at about 0.5% over ECB rates, wait and see on this?

Sponge Bob

they will all match this or come to about 0.8% quite easily and its 0.6% over not 0.5% over while most trackers are about 1.0%-1.2% nowadays

Its noty for the FTB sp expect mortgage to be an amount over 250k

AND LTV of 60% or less

AND c. 3 times the main income + 1 x the second to be the criteria and over 25 years max .

Tazz T

Talked to NIB about this today and they said they weren't allowed to give details out until they got the official offer next Wednesday. Sounds good for competition though.

Bulmers

heard about the NIB one on TodayFM this evening, seemingly you need to move your current account over too for this.

Guy from mortgage association was on it and seems like most institutions will follow with something similiar shortly, BoS one seems good though as you get ECB rate + 0.45% for 1st 2yrs, ECB + 1% there after...just bit of a pain though switching, getting all the forms, docs etc again but suppose if saves u money and knocks few yrs off the mortgage, worth it in the end.

copacetic

Sponge Bob wrote:

they will all match this or come to about 0.8% quite easily and its 0.6% over not 0.5% over while most trackers are about 1.0%-1.2% nowadays

Its noty for the FTB sp expect mortgage to be an amount over 250k

AND LTV of 60% or less

AND c. 3 times the main income + 1 x the second to be the criteria and over 25 years max .

bob, where did you here that it's 0.6 not 0.5? and also about the 60%, i've heard it will be 80%??? have you a link for your info?
cheers

seems to me that the people who can avail of this are generally better off than people with newer mortgages (who cant avail) and that those who are struggling are gonna keep struggling

Sponge Bob

No links till next week .

copacetic

Sponge Bob wrote:

they will all match this or come to about 0.8% quite easily and its 0.6% over not 0.5% over while most trackers are about 1.0%-1.2% nowadays

Its noty for the FTB sp expect mortgage to be an amount over 250k

AND LTV of 60% or less

AND c. 3 times the main income + 1 x the second to be the criteria and over 25 years max .

well the info is out now and tha above was wrong, as was indo story. rate varies with 0.5% on amount up to 50% LTV on a sliding scale up to 80% LTV.

LTV is up to 80% not 60% and it's on 40% net income on the calc above.

looks like a good deal for anyone who can get it on the 40% net income..

Ice_Box

http://www.nationalirishbank.ie/PersonalHomeHousingLoanTypesLoanToValue

How does it work?
The pricing structure is available on mortgages up to 80% LTV and works as follows:

* A margin of 0.50% is applied to the first portion of the loan up to 50% LTV
* A margin of 0.60% is applied to the next portion of the loan up to 60% LTV
* A margin of 0.80% is applied to the final portion of the loan up to 80% LTV.

Sponge Bob

40% net income as of today + 2% ECB stress margin .

If on 50 grand a year (alone) you get €36k net or €3k a month cash

source

http://www.todublin.com/taxes/index.php

40% of that €3k is €1200

€200k mortgage on house worth €410 k puts you under 50% LTV say20 year mortgage so you pay €1200 a month on it , rate 4% from

http://www.jeacle.ie/mortgage/

Then they 'stress' you by ADDING 2% onto the mortgage rate . This test puts the payment up by €230 a month so its over 40% of the net income and you no longer qualify at all .

borrowed_tune

NIB have switching package and offer title insurance or 600 euro towards solicitor's fees. Anyone know what the clawback conditions are for this?

Can't get them on the phone - seems they have huge interest already.