AIB Interest Rates

dollydrops

Our offer was accepted on a property on Friday and today the mortgage advisor in the branch sent off our paperwork to Home Loans head office for them to process them for the letter of offer to be sent to my solicitor.
Heard on the four o'clock news that they are increasing their interest rates from tomorrow.
I have tried to get through to the mortgage advisor but she isn't available.
Anyone any advice on what to do?
Do you reckon we will get the 3 year fixed rate that we were told today or the new rate from tomorrow?
What can we do if they won't offer us the 3 year fixed that we decided on today?

useless

dollydrops wrote: »

Our offer was accepted on a property on Friday and today the mortgage advisor in the branch sent off our paperwork to Home Loans head office for them to process them for the letter of offer to be sent to my solicitor.
Heard on the four o'clock news that they are increasing their interest rates from tomorrow.
I have tried to get through to the mortgage advisor but she isn't available.
Anyone any advice on what to do?
Do you reckon we will get the 3 year fixed rate that we were told today or the new rate from tomorrow?
What can we do if they won't offer us the 3 year fixed that we decided on today?

You will get the new rate. The rate that applies is the rate that is in force on the day you draw down the money, not when the offer is approved.
I haven't seen yet what the new 3 year fixed is going to be, but your options are:

(1) Accept the new fixed rate (assuming AIB will still lend you the original amount you applied for)
(2) Choose a variable rate instead
(3) Do your sums, work out how much you can borrow for the same repayment amount per month at the new interest rate, then go back to the vendor's estate agent, tell them that rates have gone up, you can't borrow what you wanted, and amend your offer downwards.
(4) Looks like AIB dont have the most competitive 3 yr fixed rate in any case:
http://www.moneyguideireland.com/mortgages/3-year-fixed
says here that Irish NAtionwide are a bit cheaper.

Best of luck.

greenman09

I was under the impression that you get the rate u were approved for providing u draw down by a certain date. Meaning the new rate wouldnt apply here

dollydrops

Thanks for the advice useless.

I really hope you are right greenman.

We are mortgage approved since June and we were approved for 369,510.
We only need 283360.
The interest rate we were quoted was 3.65% for 3 years fixed.
Have to get onto the bank this morning as soon as they open.
If they get the letter of offer out today we should still get the 3.65% for 3 years.
We have given them everything so I don't see any delay in them processing the paperwork.

useless

greenman09 wrote: »

I was under the impression that you get the rate u were approved for providing u draw down by a certain date. Meaning the new rate wouldnt apply here

No, you get the rate applicable on the day of drawdown. I had the same problem as the OP back in April when AIB last changed their rates.

carter3

yeah, it is definitely rate at date of drawdown..
a possible damage limitation exercise would be to draw down fully variable at the new rate. you might get another 4 or 5 months at that rate and when they announce the next round of rate increases you can go into your branch with a letter stating you wish to fix (you usually get a days notice before the rates change). Just have your letter ready and signed by all parties on the mortgage so you can pop into the bank straight away

dollydrops

Phew just got confirmation from the bank that we will can get the fixed rate of 3.65% for 3 years.

dlambirl

Happy Days!

My VARIABLE rate with PTSB is 4.19%! :eek:

seabre

If a 'Letter of Offer ' has been issued then the rate on that will stand - if you have not rec that yet the you will be getting the new higher rate unfortunately.

useless

seabre wrote: »

If a 'Letter of Offer ' has been issued then the rate on that will stand - if you have not rec that yet the you will be getting the new higher rate unfortunately.

This isnt necessarily the case. When I got my AIB Letter of Offer, a few months back, one of the clauses in it was that the rate that applied was the one at drawdown, not necessarily the rate specified in the offer letter.

My advice to the OP is to read the offer letter very carefully and if any part of it isnt clear to them, they should get their solicitor (not a bank official) to explain it to them.

useless

Just curious to know how this ended up- OP, did you get the 3.65% rate or the new rate?
Hope it all worked out for you anyway.

Fergananym

Hi there,

I have a loan offer from Irish Nationwide and another one from AIB. INBS's is 3 yrs fixed rate on 35yrs and AIB's is LTV 80% variable on 30yrs. It turns out that borrowing approximately 300k with INBS is going to cost 40k more than with AIB. What is the reason for this, is it that AIB used an APR of 3.53% over the 30 years while INBS calculation is based on a 3.35% for the first three years and a 3.75 for the rest?

Which of these two loan offers would you recommend?

Thank you in advance.

useless

3.75% is bigger than 3.53%
32 is bigger than 30

Thats why the INBS loan is more expensive than the AIB loan.