Saving/Applying for a mortgage 2020-22 Edition

awec

dwayneshintzy wrote: »

Plan for us is to buy in summer 2021 if we can, but won't be moving back to Ireland until 2024. We'd plan to let it out in the meantime......I thought we'd only qualify for an investor mortgage, meaning 5% interest rate and more like 50% deposit (instead of 35%). Told those guys on MyMortgages but they've told me to get an application in and see (application fee of 500 euro).

You paid 500 euro for some crowd to advise you on a mortgage?! That's mad. Go directly to banks, or go to a broker, both are free.

You will have to get a buy-to-let mortgage, as you won't be using it as your primary residence.

brisan

dwayneshintzy wrote: »

Plan for us is to buy in summer 2021 if we can, but won't be moving back to Ireland until 2024. We'd plan to let it out in the meantime......I thought we'd only qualify for an investor mortgage, meaning 5% interest rate and more like 50% deposit (instead of 35%). Told those guys on MyMortgages but they've told me to get an application in and see (application fee of 500 euro).

Another accidental landlord in the making
Lets hope the tenants leave when you want them to
Be very careful about being an absent landlord
A lot of possible trouble involved.
Tenants will have to withold rent to pay your tax etc.

dwayneshintzy

awec wrote: »

You paid 500 euro for some crowd to advise you on a mortgage?! That's mad. Go directly to banks, or go to a broker, both are free.

You will have to get a buy-to-let mortgage, as you won't be using it as your primary residence.

No, I haven't paid 500 euro. I'm saying they're asking for 500 euro to apply and I've not done so, trying to get more info about what my options are for a mortgage from abroad.


It's difficult going to directly to banks or brokers in Ireland when I'm in a timezone 8 hours ahead and not sure exactly where to start.

guyfawkes5

thewheel2.0 wrote: »

When your initial fixed rate period expires, are the fixed options the bank offers the same as the rates available to new customers? Or is it a case that the rates for people "locked in" to a mortgage are worse?

Trying to figure out why some people go KBC and Ulster Bank, yes their fixed rate is better over two years, however, ICS and AIB have a lower cost of credit over the full mortgage term.

Is 35 year "cost of credit" a red herring cause people prioirtise the rate they can get today and if they see a better one when their fixed period expires they will switch?

Banks may offer the same fixed rates for new and existing customers, but they don't have to. It's common but you should check with the bank first.

The projections you get in your mortgage contract of your full mortgage term are more to present the best information as we know it from this point in time rather than being a red herring. Although you are correct that to get the best value for yourself, you should be switching as much as possible to prioritise better interest rates during the lifetime of the mortgage.

thewheel2.0

guyfawkes5 wrote: »

Banks may offer the same fixed rates for new and existing customers, but they don't have to. It's common but you should check with the bank first.

The projections you get in your mortgage contract of your full mortgage term are more to present the best information as we know it from this point in time rather than being a red herring. Although you are correct that to get the best value for yourself, you should be switching as much as possible to prioritise better interest rates during the lifetime of the mortgage.

Thanks @guyfawkes5, @awec and @Creamy Goodness.

I was looking at AIB Green 5 year fixed at 2.45%, they have the 2nd best 35 year cost of credit in the country with only ICS beating them (due to better variable rate). But maybe I need to look at Ulster Bank, they offer 2 years at 2.3% and will pay €1500 in legal fees.

So now my understanding is if I were to switch after two years, some banks offer to pay legal fees for switching. Or I could fix with Ulster again if they are still compeditive.

Only disadvantage I can see is that the only Ulster Bank branch nearby is in the heart of Limerick city where AIB has various branches in suburbs and a nearby village. A small thing I suppose if theres long term money to be saved.

thewheel2.0

thewheel2.0 wrote: »

Thanks @guyfawkes5, @awec and @Creamy Goodness.

I was looking at AIB Green 5 year fixed at 2.45%, they have the 2nd best 35 year cost of credit in the country with only ICS beating them (due to better variable rate). But maybe I need to look at Ulster Bank, they offer 2 years at 2.3% and will pay €1500 in legal fees.

So now my understanding is if I were to switch after two years, some banks offer to pay legal fees for switching. Or I could fix with Ulster again if they are still compeditive.

Only disadvantage I can see is that the only Ulster Bank branch nearby is in the heart of Limerick city where AIB has various branches in suburbs and a nearby village. A small thing I suppose if theres long term money to be saved.

Is it also fair to say though, that if the pandemic left lasting damage, in two years employment wise we may not be in a position to switch. Therefore trapping us with Ulster Bank and potentially stuck on their high variable rate (if they would not offer compeditive fixed rates).

5 year fixed with AIB on a close enough rate of 2.45% might suit us in that case. Is that a risk I should consider or am I over thinking this?

guyfawkes5

No, everything you're saying makes sense.

It's all about trading off potential gain against risk.

mimimcmc

Do ye know which banks you can get a mortgage with as a FTB without banking with them?

Currently AIP with AIB as we both bank with them.
Have applied to KBC but they said we would have to bank with them which turns me off..

Sparky85

mimimcmc wrote: »

Do ye know which banks you can get a mortgage with as a FTB without banking with them?

Currently AIP with AIB as we both bank with them.
Have applied to KBC but they said we would have to bank with them which turns me off..

Most don’t require it, UB, EBS, ICS, BOI, Haven etc etc
Kbc will give you a preferential rate to move your current account to them but it’s not actually a requirement

tomgaa

guyfawkes5 wrote: »

Banks may offer the same fixed rates for new and existing customers, but they don't have to. It's common but you should check with the bank first.

The projections you get in your mortgage contract of your full mortgage term are more to present the best information as we know it from this point in time rather than being a red herring. Although you are correct that to get the best value for yourself, you should be switching as much as possible to prioritise better interest rates during the lifetime of the mortgage.

Just wondering why there isn't more with KBC with their 2.3% mortgage rates? i got in touch with a broker in Mortgages.ie at it was KBC that they said gave the best deal, even considering that Ulster back were offering 2.2% fixed, but they bump up to 3%APRC after 5 years fixed, which long term works out paying back more than KBC.

Whats everyones thoughts?

Queenio

tomgaa wrote: »

Just wondering why there isn't more with KBC with their 2.3% mortgage rates? i got in touch with a broker in Mortgages.ie at it was KBC that they said gave the best deal, even considering that Ulster back were offering 2.2% fixed, but they bump up to 3%APRC after 5 years fixed, which long term works out paying back more than KBC.

Whats everyones thoughts?

I'm taking the 5 year 2.5% fixed and have every intention of revising my plan after 5 years and switching as needed. Apparently most people never bother to switch mortgage provider or set up. You can split between variable and fixed or fix a portion of the remaining balance too without changing banks. Definitely worth any perceived hassle according to my financial advisor

LoonyLovegood

tomgaa wrote: »

Just wondering why there isn't more with KBC with their 2.3% mortgage rates? i got in touch with a broker in Mortgages.ie at it was KBC that they said gave the best deal, even considering that Ulster back were offering 2.2% fixed, but they bump up to 3%APRC after 5 years fixed, which long term works out paying back more than KBC.

Whats everyones thoughts?

They require a 20% deposit if you're not buying in a city. As a FTB, a 10% one is hard enough to get up, it'd be impossible to get a 20%. I'd rather go with someone that'll give me the 90% mortgage, and then possibly switch in a few years.

guyfawkes5

tomgaa wrote: »

Just wondering why there isn't more with KBC with their 2.3% mortgage rates? i got in touch with a broker in Mortgages.ie at it was KBC that they said gave the best deal, even considering that Ulster back were offering 2.2% fixed, but they bump up to 3%APRC after 5 years fixed, which long term works out paying back more than KBC.

Whats everyones thoughts?

People aren't guaranteed to stay with the same bank after the term ends (and shouldn't).

What's the best deal varies depending on what you value and how long a term you're looking for. Technically BoI or EBS is the best deal over the course of a year, as their fixed rates are worse (2.9%) but if you subtract their cashback (2%) from that, it works out better than 2.3% interest over a year. You just have to make sure to switch at the end of the year.

thewheel2.0

thewheel2.0 wrote: »

Is it also fair to say though, that if the pandemic left lasting damage, in two years employment wise we may not be in a position to switch. Therefore trapping us with Ulster Bank and potentially stuck on their high variable rate (if they would not offer compeditive fixed rates).

5 year fixed with AIB on a close enough rate of 2.45% might suit us in that case. Is that a risk I should consider or am I over thinking this?

Like guyfawkes5 said, it's all about weighing up what's best for you. If there was one true 'best' deal, everyone would be on it.

I'm on AIB's variable rate myself, and plenty of people thought I was mad not to take a fixed rate, or go with a bank with cashback. But the variable rate suits me much better based on my risk appetite, current income and future employment prospects. Everyone's different.

lomb

Relax you guys are overthinking this. If you look at the monthly payments on 2.3 and 2.9 there bugger all in the difference not enough that it will affect you. The only thing that really affects you is the term.
Bois cashback is 3% over 5 years so that works out at 2.4 withoute. The bad part is you need to fix for at least a year as their variable is so high.
The only disadvantage of a 1 year fixed over a variable is you cannot overpay the mortgage. Max with boi is 10% pay. If you wanted to pay a 25 year off in 15 you'd need to save the extra 50% and give it to them at the end of the fixed term and then redux. This means a month at their standard variable. It's easier and cheaper to overpay 10% a month taking the 25 year to a 20 year. Then pay in big chunks every 5 years to reduce the 20 years to 15. This assumes you can afford it and want to.I wouldn't fix for more than a year or two as I think rates may be lower in a few years maybe 1.5-2%

guyfawkes5

To be honest you're a bit confusing to read in some parts there.

The only thing I'll say is that the '3% cashback' banks give the remaining 1% cashback on year 5, which relies on staying with their uncompetitive rates for that long and is never, ever worth it in the extra interest you'll pay. You'll always be better off switching as soon as possible to another bank.

Dean91

Hi myself and parnter are saving for a mortgage to build . but I am thinking of going back to college part time as i just want a better career , is it possible to get a mortgage if I go back to college part time .

We are both on 30k , would are salary be enough for a mortgage?

lomb

guyfawkes5 wrote: »

To be honest you're a bit confusing to read in some parts there.

The only thing I'll say is that the '3% cashback' banks give the remaining 1% cashback on year 5, which relies on staying with their uncompetitive rates for that long and is never, ever worth it in the extra interest you'll pay. You'll always be better off switching as soon as possible to another bank.

Not really. 3% over 5 years is .6% a year so the 2.9- .6 is 2.3% which is actually very competitive. The only downside is that it doesn't enable you to be overpay the loan other than a max of 10% per month. The solution is to take out 1 or 2 year fixed and pay chunks off in between fix periods.
I took out a loan for 25 years which is ridiculous I would want to repay this in a maximum of 20 and a minimum of 15. I took out the 25 to provide flexibility. Overpaying 10% a month reduces the term from 25 to 20 years.

The upside is if you bank with boi it's alot easier and timesaving and also having a mortgage with a mainline bank is safer. Theres less chance of vulture funds, bad resets where the interest rate is jacked up, mortgage deeds going missing etc, also many people like the 2% up front for furniture or legal fees etc.

lomb

Dean91 wrote: »

Hi myself and parnter are saving for a mortgage to build . but I am thinking of going back to college part time as i just want a better career , is it possible to get a mortgage if I go back to college part time .

We are both on 30k , would are salary be enough for a mortgage?

Sure, just don't tell them your going back and drawdown before you do 60kx3.5 = a 220k property with 10% down

bulmersgal

Dean91 wrote: »

Hi myself and parnter are saving for a mortgage to build . but I am thinking of going back to college part time as i just want a better career , is it possible to get a mortgage if I go back to college part time .

We are both on 30k , would are salary be enough for a mortgage?

Are you going back part time in the evening and still working full time. If so I don't see how that would effect you getting a mortgage.

Creamy Goodness

Only real problem I see - and will depend on the location - is 220k won’t build you a house and doubly so if you have to purchase the land too.

Gael23

AIB seem prepared to lend me slightly more than UB but at a higher rate so that’s a decision I have to make I suppose

macnug

Hi, Me and my partner are thinking of moving. My partner is on about 48k a year (with 32k guaranteed) im on about 30k with no guaranteed or contract as I just started a few months ago. We are looking for about 100k, would it be best to save for a year and hope I get a contract or would she get it on the strength of her own wages. We own our house atm and its worth about 150k so that would be our deposit. We have 3 kids, car loan of 300 p/m. Save about 2k per month for the last few months (because of covid though).

I know I should just go to a broker for a definite answer but just want to get an idea first.

Bluefoam

Gael23 wrote: »

AIB seem prepared to lend me slightly more than UB but at a higher rate so that’s a decision I have to make I suppose

Get the property that best suits you... Mortgages can be changed to get the best deal.

Dean91

Creamy Goodness wrote: »

Only real problem I see - and will depend on the location - is 220k won’t build you a house and doubly so if you have to purchase the land too.

Her parents own the land in kildare around 40 acres split between her and her sister. Prob build for 250k
I can get a gift from parents.

guyfawkes5

lomb wrote: »

Not really. 3% over 5 years is .6% a year so the 2.9- .6 is 2.3% which is actually very competitive. The only downside is that it doesn't enable you to be overpay the loan other than a max of 10% per month. The solution is to take out 1 or 2 year fixed and pay chunks off in between fix periods.
I took out a loan for 25 years which is ridiculous I would want to repay this in a maximum of 20 and a minimum of 15. I took out the 25 to provide flexibility. Overpaying 10% a month reduces the term from 25 to 20 years.

The upside is if you bank with boi it's alot easier and timesaving and also having a mortgage with a mainline bank is safer. Theres less chance of vulture funds, bad resets where the interest rate is jacked up, mortgage deeds going missing etc, also many people like the 2% up front for furniture or legal fees etc.

EBS allow 10% of the principal to be overpayed per year on fixed rates, not per month as BoI do.

You should certainly overpay as much as you can, but you should also switch as much as you can too. With regards to cashback, the banks can't claw back what they give you so it makes no sense to stay with their worse longer than the absolute minimum.

lomb

guyfawkes5 wrote: »

EBS allow 10% of the principal to be overpayed per year on fixed rates, not per month as BoI do.

You should certainly overpay as much as you can, but you should also switch as much as you can too. With regards to cashback, the banks can't claw back what they give you so it makes no sense to stay with their worse longer than the absolute minimum.

That's very generous of ebsyou could repay it in less than 8 or 9 years if you want and can.

With regard to switching I'm happy with boi. 2.9 fixed for 2 years with 3% cashback over 5 years . That's grand it's 2.3% per year average and they didn't load me as I was at 90% ltv.
Yes your right after 5 years it's a slightly different story. I'm guessing rates will be lower then though due to competition, time and rates converging with European banks.

guyfawkes5

lomb wrote: »

That's very generous of ebsyou could repay it in less than 8 or 9 years if you want and can.

With regard to switching I'm happy with boi. 2.9 fixed for 2 years with 3% cashback over 5 years . That's grand it's 2.3% per year average and they didn't load me as I was at 90% ltv.
Yes your right after 5 years it's a slightly different story. I'm guessing rates will be lower then though due to competition, time and rates converging with European banks.

I'm saying that if you left BoI or EBS after one year (or six months, or even a day, there's no minimum period you have to stay with them), then the 'worked out' interest after cashback would be far less than 2.3% and you could pick up a lower actual interest rate with someone else. The only thing that depends on is the entrance criteria other banks have for picking you up, as some have minimum periods that you have to have with be with your previous mortgage provider, but this will usually be no longer than a year and sometimes even less.

lomb

guyfawkes5 wrote: »

I'm saying that if you left BoI or EBS after one year (or six months, or even a day, there's no minimum period you have to stay with them), then the 'worked out' interest after cashback would be far less than 2.3% and you could pick up a lower actual interest rate with someone else. The only thing that depends on is the entrance criteria other banks have for picking you up, as some have minimum periods that you have to have with be with your previous mortgage provider, but this will usually be no longer than a year and sometimes even less.

I think 2.3% is probably the lowest there is in Ireland for 90% ltv. I know what your saying though treat first year as a .9% or 2.9-2 = .9% and switch somewhere else at 2.4 or whatever.
Look I'm happy with boi . I value it's a mainline bank that won't send a vulture fund after me or loose the deeds or create a predatory interest reset up to 6% (ARM) like the US banks did that caused the housing crash and economic crash in 2008 . There's also less chance of a quick repossession if I couldn't pay.I put a value on that even if it's not a lot.

guyfawkes5

That's fair enough. A bank being straightforward to deal with definitely has value by itself.