AIB fixed term mortgage interest rate reduction

Blanco100

Hi there,

Got a fixed term mortgage from AIB last year (5 year 2.85%).

Looks like there has been a reduction in rate to 2.55% for this year. Is it possible for existing customers to avail of this reduction does anyone know?

https://www.rte.ie/news/business/2020/0224/1117221-aib-mortgage-rates/

Many thanks in advance

micks_address

Blanco100 wrote: »

Hi there,

Got a fixed term mortgage from AIB last year (5 year 2.85%).

Looks like there has been a reduction in rate to 2.55% for this year. Is it possible for existing customers to avail of this reduction does anyone know?

https://www.rte.ie/news/business/2020/0224/1117221-aib-mortgage-rates/

Many thanks in advance

Can't see why it wouldnt apply to existing customers.. it talks about changing from variable to fixed and savings achievable.. i've already email them to see what the story is... 2.55 for 5 years fixed seems like a sensible rate going forward

dotsman

Blanco100 wrote: »

Hi there,

Got a fixed term mortgage from AIB last year (5 year 2.85%).

Looks like there has been a reduction in rate to 2.55% for this year. Is it possible for existing customers to avail of this reduction does anyone know?

https://www.rte.ie/news/business/2020/0224/1117221-aib-mortgage-rates/

Many thanks in advance

Is it possible for existing customers? Of course!
Is it possible for existing customers on a 5 year fixed rate? Of course not!*

You are already on a 5 year fixed rate. The whole idea of a fixed rate is that both you and the bank agree to go with 2.85% for the next 5 years, regardless of what direction interest rates go over that period. Once the 5 years is up, you are free to fix again at whatever rates are offered at the time, or go with variable.

Seriously, just think about what you are asking - think about it from the other side. What if it had gone the other way and rates went up. Would you be happy to let the bank move you to a higher rate?

*You can always pay the breakage fee to get our of you existing fixed rate, but you would need to sit down and do the sums. If you are lucky, the breakage fee might be small.

micks_address

micks_address wrote: »

Can't see why it wouldnt apply to existing customers.. it talks about changing from variable to fixed and savings achievable.. i've already email them to see what the story is... 2.55 for 5 years fixed seems like a sensible rate going forward

Yeah you can switch from variable if existing customer..if fixed obviously not... I'm looking at the green rate of 2.45 fixed as our ber rating is b3

pwurple

Sorry, you're looking for a variable rate there. You're fixed.

micks_address

at 2.45 would you fix for 3 or 5 years?

crazy_kenny

I’m currently on a variable rate of 2.95% so the new rate of 2.55% looks appealing to me. I think I might take a gamble and fix for 5 years.

Millem

They rang me this morning at 9.30 to try and get me to fix for 5 years at 2.55%.
We have a mortgage with them but I told them I was switching to Ulster bank at 2.2%. They rang me in December and January previously to get me to fix previously at 2.85%.

I am thinking of hanging tight as I presume boi will follow and AIB might have a further cut?

micks_address

Millem wrote: »

They rang me this morning at 9.30 to try and get me to fix for 5 years at 2.55%.
We have a mortgage with them but I told them I was switching to Ulster bank at 2.2%. They rang me in December and January previously to get me to fix previously at 2.85%.

I am thinking of hanging tight as I presume boi will follow and AIB might have a further cut?

how much is it costing you to switch to Ulster Bank?

KilOit

Millem wrote: »

I am thinking of hanging tight as I presume boi will follow and AIB might have a further cut?

Cant see it going to 2.2 imo. I'm in talks with switching to UB at the minute, probably get switch by mid march. Look to be gaining about €400 on the cash back for solicitor anyway. The 2.55% with AIB is pretty good for 3 years, personally wouldnt go that rate for 5 years though

Millem

micks_address wrote: »

how much is it costing you to switch to Ulster Bank?

Breakage fee is approximately €1000 plus legal fees.

gmisk

Is it likely EBS going to follow AIB changes?

micks_address

gmisk wrote: »

Is it likely EBS going to follow AIB changes?

likely they will all follow suit

phelixoflaherty

Feck it.
Just fixed at 2.85 for 3 years on Friday

The Satanist

I'm drawing down in April or May, 5 year fixed at 2.85%. I presume I'll be able to avail of the lower rate?

micks_address

The Satanist wrote: »

I'm drawing down in April or May, 5 year fixed at 2.85%. I presume I'll be able to avail of the lower rate?

Id ask aib

Q&A

phelixoflaherty wrote: »

Feck it.
Just fixed at 2.85 for 3 years on Friday

I'd enquire about breaking and refixing say the lower rate. Can't imagine the break free would be significant.

Trish56

Yes you will drawdown at the new rate automatically.

The Satanist wrote: »

I'm drawing down in April or May, 5 year fixed at 2.85%. I presume I'll be able to avail of the lower rate?

Bob24

I am on variable with AIB and will switch to fixed as the gap in rates is getting significant.

However even with their new rates they are still not competitive with KBC (I believe KBC are dropping to 2.25 for 3 years and 2.4 for 5 years next week).

Does anyone know if there is any chance of getting AIB to match or get close to those rates by telling them that otherwise I will move and KBC even more the covers the legal fees with their switcher bonus? Or is it something they would never do and would I be wasting my time? (I think from their perspective my mortgage is good business as the LTI is very comfortable and the LTV means negative equity is extremely unlikely even if there was a bad crash).

Q&A

Bob24 wrote: »

I am on variable with AIB and will switch to fixed as the gap in rates is getting significant.

However even with their new rates they are still not competitive with KBC (I believe KBC are dropping to 2.25 for 3 years and 2.4 for 5 years next week).

Does anyone know if there is any chance of getting AIB to match or get close to those rates by telling them that otherwise I will move and KBC even more the covers the legal fees with their switcher bonus? Or is it something they would never do and would I be wasting my time? (I think from their perspective my mortgage is good business as the LTI is very comfortable and the LTV means negative equity is extremely unlikely even if there was a bad crash).

Never heard of a bank price matching. Nothing to be gained for them really. Between inertia and the fact mortgage switching numbers are so low it probably makes more for them to call people's bluff. That said they're might be scope for banks to wave break fees and trim a tenth of a % in some cases (think BOI did this for a while)

From your perspective even if they price matched it would still be in your interest to switch. The costs associated with switching should be a lot less than 3k you would gain.

micks_address

Bob24 wrote: »

I am on variable with AIB and will switch to fixed as the gap in rates is getting significant.

However even with their new rates they are still not competitive with KBC (I believe KBC are dropping to 2.25 for 3 years and 2.4 for 5 years next week).

Does anyone know if there is any chance of getting AIB to match or get close to those rates by telling them that otherwise I will move and KBC even more the covers the legal fees with their switcher bonus? Or is it something they would never do and would I be wasting my time? (I think from their perspective my mortgage is good business as the LTI is very comfortable and the LTV means negative equity is extremely unlikely even if there was a bad crash).

Did you switch to 3 or 5 year's?

Bob24

Q&A wrote: »

Never heard of a bank price matching. Nothing to be gained for them really. Between inertia and the fact mortgage switching numbers are so low it probably makes more for them to call people's bluff. That said they're might be scope for banks to wave break fees and trim a tenth of a % in some cases (think BOI did this for a while)

From your perspective even if they price matched it would still be in your interest to switch. The costs associated with switching should be a lot less than 3k you would gain.

Thanks, I haven't heard of it either but I thought I'd just ask.

TBH if they were to match the rate I'd be happy with that and stay with them. But if they don't, they'll be asking to lose my business and that 3000 euros bonus which more than covers the legal cost would seal the decision.

I know what you mean about them counting on inertia, but at the same time they would lose a very secure mortgage which is a riskless cash cow for them (I know my individual business doesn't matter to them taken in isolation, but if their better borrowers start leaving it not only hurts their profits but also increases the risk level of their mortgage portfolio). I guess in the end what matters is how many people are actually switching.

As per your and my expectation they don't seem to care, but I know for a fact that it is different in other countries. For example I know of 2 different people with mortgages in France whereby they got significant rate drops to prevent them from going to another bank (essentially it seems like over there your current bank would look at whatever breakage fee you might have and what the legal cost would be for you to move, and offer a new rate which is slightly higher that the competition but ensures it is not worth your while to switch once everything is taken into account). Oh and btw both those people have fixed rate of around 0.7-0.8% for the whole duration of their mortgage - we still have a good way to match that!

Bob24

micks_address wrote: »

Did you switch to 3 or 5 year's?

Haven't switched yet. If I was to stay with AIB I am looking at the 5 years rate.

But if I end up going to KBC the 2.25% 3 years rate is quite tempting v.s. their 2.4% for 5 years (and even more so v.s. 2.55% for 3/5 years with AIB).

Nowadays what people have in their mind is that rates can only go lower with slightly better competition and the ECB probably going even more into negative territory and increasing QE to keep the euro/economy on life support. Which I agree with in the short term (and this is an argument not to fix for too long). But I am also thinking this stuff might go out of control and trigger significant inflation at some point which would force higher rates (and with than in mind it might make sense to fix for a longer period).

micks_address

Bob24 wrote: »

Haven't switched yet. If I was to stay with AIB I am looking at the 5 years rate.

But if I end up going to KBC the 2.25% 3 years rate is quite tempting v.s. their 2.4% for 5 years (and even more so v.s. 2.55% for 3/5 years with AIB).

Nowadays what people have in their mind is that rates can only go lower with slightly better competition and the ECB probably going even more into negative territory and increasing QE to keep the euro/economy on life support. Which I agree with in the short term (and this is an argument not to fix for too long). But I am also thinking this stuff might go out of control and trigger significant inflation at some point which would force higher rates (and with than in mind it might make sense to fix for a longer period).

Yeah I'm torn between 3 and 5 with exactly your points in mind. How much more than say 2.45 is aib likely to go? It's not that long we fixed at 3..x for 3 years..been on variable last year or two

Grassey

phelixoflaherty wrote:

Feck it. Just fixed at 2.85 for 3 years on Friday

21 day cancellation no?
Id fixed at 2.55 last week, then when they announced the lower rates rang up, sent in a 21 day cancellation and new form to fix at 2.45

Bob24

micks_address wrote: »

Yeah I'm torn between 3 and 5 with exactly your points in mind. How much more than say 2.45 is aib likely to go? It's not that long we fixed at 3..x for 3 years..been on variable last year or two

I am pretty sure they'll never go below 1% (like many continental European banks already do), but I think below 2% is very possible (but not guaranteed) in the next 2/3 years if the ECB goes into "whatever it takes" mode (and can maintain control of the situation).

Having said that, it is not going to happen tomorrow, so I am leaning towards switching to KBC and going for 2.25% over 3 years. That would be a significant saving I am getting right now allowing me to reduce the principale quicker (with the same monthly repayment), so even if rates are heading up again in 3 years time, I will have reduced the loan amount more, which would partially compensate for higher rates. And if competition and the ECB keep pushing rates lowers over the next 3 years then happy days I can go even lower.

Are you thinking of staying with AIB or considering moving to another bank?

micks_address

Bob24 wrote: »

I am pretty sure they'll never go below 1% (like many continental European banks already do), but I think below 2% is very possible (but not guaranteed) in the next 2/3 years if the ECB goes into "whatever it takes" mode (and can maintain control of the situation).

Having said that, it is not going to happen tomorrow, so I am leaning towards switching to KBC and going for 2.25% over 3 years. That would be a significant saving I am getting right now allowing me to reduce the principale quicker (with the same monthly repayment), so even if rates are heading up again in 3 years time, I will have reduced the loan amount more, which would partially compensate for higher rates. And if competition and the ECB keep pushing rates lowers over the next 3 years then happy days I can go even lower.

Are you thinking of staying with AIB or considering moving to another bank?

I'll staying with aib. Looking at the green rate.. just waiting for ber to be sorted. I figure switching in couple of k and lots of documents etc solicitor

pablo57

Blanco100 wrote: »

Hi there,

Got a fixed term mortgage from AIB last year (5 year 2.85%).

Looks like there has been a reduction in rate to 2.55% for this year. Is it possible for existing customers to avail of this reduction does anyone know?

https://www.rte.ie/news/business/2020/0224/1117221-aib-mortgage-rates/

Many thanks in advance

You can avail of it, but will have to pay a break fee. AIB have changed how they calculate these, and they are more reasonable than previously. You should ask you mortgage advisor to ask for the break fee to be calculated and set to you. In the meantime, you should work out how much you think you would save over the remainder of your term if you were to switch. To calculate your interest savings, you can use the following:

the remaining balance on your mortgage x the difference in interest (2.85-2.55=0.3) x the number of months remaining divided by 60 (ie 5 years)

Then you could use the likes of Dr Karl's mortgage calculator to see what the saving would be in terms of the balance. For this you should use compare where your remaining balance would be at the end of your current term using the 2.85 and 2.55 rates.

Add those two figures up and you'll know how much you'll save in terms of reduced interest repayments and being further along in paying off the balance.

banjostring

I’m on a 2.75 variable with AIB which i think is the best variable out there right now. The 2.45 green fixed rate with AIB is attractive but there is the cost of getting a BER (€ 500 ish I’m estimating ?) brings down my saving considerably over the 5 years as my principal is relatively low.
KBCs 2.25 fixed is certainly a great option and potentially a no brainer when you take into account the €3K cash back offer.
My question is will AIB not have to follow suit here and match or undercut KBC to maintain their market share ? Surely they are going to be losing customers at a rapid rate over the next few Months.
Another thing to consider is that An Post are apparently entering the Mortgage market this year and they had advertised to cut the incumbent Banks by 1%....... haven’t heard any update on this in Months so it may be pie in the sky ?
I’m gonna hold fire for another couple of Months to see if there are any developments.
Any thoughts ?

micks_address

banjostring wrote: »

I’m on a 2.75 variable with AIB which i think is the best variable out there right now. The 2.45 green fixed rate with AIB is attractive but there is the cost of getting a BER (€ 500 ish I’m estimating ?) brings down my saving considerably over the 5 years as my principal is relatively low.
KBCs 2.25 fixed is certainly a great option and potentially a no brainer when you take into account the €3K cash back offer.
My question is will AIB not have to follow suit here and match or undercut KBC to maintain their market share ? Surely they are going to be losing customers at a rapid rate over the next few Months.
Another thing to consider is that An Post are apparently entering the Mortgage market this year and they had advertised to cut the incumbent Banks by 1%....... haven’t heard any update on this in Months so it may be pie in the sky ?
I’m gonna hold fire for another couple of Months to see if there are any developments.
Any thoughts ?

Ber should be max 150

TitianGerm

Do you have to send in the BER cert when applying for the green mortgage or with the BER number suffice (the number you enter on the BER website to see your results)?

banjostring

Cheers, €150 seems very reasonable assuming an assessor would have to call out to the House for an hour or two to do the assessment. Must check it out.

pablo57

TitianGerm wrote: »

Do you have to send in the BER cert when applying for the green mortgage or with the BER number suffice (the number you enter on the BER website to see your results)?

The certificate, but you can call SEAI and get it emailed to you on the same day.

TitianGerm

pablo57 wrote: »

The certificate, but you can call SEAI and get it emailed to you on the same day.

Thanks for that. We have a B1 house but never got the BER cert just a cert number when we bought.

pablo57

TitianGerm wrote: »

Thanks for that. We have a B1 house but never got the BER cert just a cert number when we bought.

Yeah, was in the same boat a few weeks back and couldn't believe this was something that could be sorted so efficiently! Called 1890 734 237 and they said they'd had quite a few calling, specifically for the Green Mortgage.

micks_address

pablo57 wrote: »

Yeah, was in the same boat a few weeks back and couldn't believe this was something that could be sorted so efficiently! Called 1890 734 237 and they said they'd had quite a few calling, specifically for the Green Mortgage.

You should be able to retrieve your cert online


https://ndber.seai.ie/pass/ber/search.aspx

pablo57

micks_address wrote: »

You should be able to retrieve your cert online


https://ndber.seai.ie/pass/ber/search.aspx

That won't get you the certificate. It looks like this:

micks_address

pablo57 wrote: »

That won't get you the certificate. It looks like this:

Aib told me they need a published ber on the website. I also have the cert but you might not need it

pablo57

micks_address wrote: »

Aib told me they need a published ber on the website. I also have the cert but you might not need it

When I applied a few weeks ago they insisted on the certificate.