Reducing mortgage term query

jayjay2010

If I reduce my mortgage term with my current bank, will this require a credit application (ie: credit check, affordability, stress test etc) or is this something that can be done fairly simply? Current term 32 years left looking to reduce to 23 years. Fixed period ending at the end of Oct. Thanks!

Thestart

jayjay2010 wrote: »

If I reduce my mortgage term with my current bank, will this require a credit application (ie: credit check, affordability, stress test etc) or is this something that can be done fairly simply? Current term 32 years left looking to reduce to 23 years. Fixed period ending at the end of Oct. Thanks!

Overpay don’t reduce your term, no paperwork required. If in the future you need to extend the term you may not be able to. If you over pay you get the benefit financially anyway but have the option to stop when/if it suits you in the future. You never know what can happen over 23 years.

lau1247

if you are coming out of fixed, make sure you look into your rates and whether to fix again or onto LTV variable. I think most lenders (if not all) put people on SVR (Standard Variable Rate) if you take no action!! It goes without saying that SVR is higher than LTV variable

LTV Variable Interest Rate and SVR
Loan to Value (LTV) Variable Interest Rate: The LTV variable interest rate available depends on the LTV band
(which must be supported by a valuation report). The LTV band is the percentage representing the difference
between the loan amount and the value of the property. For example, if a customer has a mortgage of
€80,000 on a property valued at €100,000, their LTV rate band would be 80%.

Private Dwelling House (PDH) Standard Variable Rate is held by existing owner occupier mortgage customers
only and is known as “PDH SVR”. Customers who availed of this rate at loan draw-down remain on this rate
for the duration of the loan term, unless they request to switch to a PDH fixed interest rate or to our ‘LTV’
variable interest rate. It is also the default reversionary rate for customers rolling off a fixed rate if they chose
not to re-fix or avail of a LTV rate at the end of their fixed rate period.

Reference: Link from AIB for example

Geuze

jayjay2010 wrote: »

If I reduce my mortgage term with my current bank, will this require a credit application (ie: credit check, affordability, stress test etc) or is this something that can be done fairly simply? Current term 32 years left looking to reduce to 23 years. Fixed period ending at the end of Oct. Thanks!

After end of fixed rate period, simply overpay.

No need to officially change the term.

con747

lau1247 wrote: »

if you are coming out of fixed, make sure you look into your rates and whether to fix again or onto LTV variable. I think most lenders (if not all) put people on SVR (Standard Variable Rate) if you take no action!! It goes without saying that SVR is higher than LTV variable



Reference: Link from AIB for example

That is supposed to have changed, they should now let you know your options.
https://www.rte.ie/news/business/2019/0103/1020092-banks-now-required-to-tell-mortgage-holders-how-to-save/