Thinking of switching mortgage-Avantmoney

brian2614

Just looking for sum advice if possible please folks

Just finished a fix term with KBC and their new fixed on offer is 2.3%

A mortgage broker I dealt with previously contacted me to say I am in the correct group for Avants new rate of 1.95%(3,5,7 fixed years)

If I move I would save €74 a month and stay on the same term of 21 years left:eek:

If I continue to pay what am paying €640 I would knock €18K in interest off with their new rate(which I know can change in the future)

My wife has just recently sold her place so their is extra money there each month to pay an extra €60 a month bringing it to €700 which would take 21K in interest off the term the broker said.

It will cost €1k in fees to move which we have.

Should we move to them and what term would you think?

I dont know much about Avant tbh or this stuff

Current Value of property €235k-€240k and mortgage is circa €117K

Smee_Again

I'd move and as you don't seem to need the money I'd top up by pension my at least €123 per month (assuming you're a higher rate tax payer).

The net effect on your monthly income will be zero but over time the pension should outperform the interest saved on the mortgage.

Or pay down any other higher interest debt and then top up the mortgage.

brian2614

Smee_Again wrote: »

I'd move and as you don't seem to need the money I'd top up by pension my at least €123 per month (assuming you're a higher rate tax payer).

The net effect on your monthly income will be zero but over time the pension should outperform the interest saved on the mortgage.

Or pay down any other higher interest debt and then top up the mortgage.

Thanks for the reply and advice, If only I didn't need the money!!!

Will definitely take it on board..

Darc19

Your figures are not adding up.

€640 a month on 2.3% and 21 years would suggest about €130,000 balance.

Monthly repayment showing a €74 different is not possible

brian2614

Darc19 wrote: »

Your figures are not adding up.

€640 a month on 2.3% and 21 years would suggest about €130,000 balance.

Monthly repayment showing a €74 different is not possible

Sorry the 2.3% with KBC would mean repayments of €44 off the €640= €596
and Avant at 1.95% would mean €74 off €640= €568

Balance outstanding is €117k

Current variable rate am on at the mo with KBC is 3.05%

Q&A

You've an LTV of less than 60%. KBC offer slightly lower rates than you've posted bit you might need a new valuation.

Not sure what term you're looking at but taking a comparable/conservative time horizon of 3 years you'd save about €1,174 in interest by switching. When you factor in the cost of changing provider they're probably isn't much savings.

Of course with the interest rate differential between the two lenders the longer you fix with Avant the more beneficial the switch would be. The same calculation over five years would a save you €2433 in interest.

brian2614

Q&A wrote: »

You've an LTV of less than 60%. KBC offer slightly lower rates than you've posted bit you might need a new valuation.

Not sure what term you're looking at but taking a comparable/conservative time horizon of 3 years you'd save about €1,174 in interest by switching. When you factor in the cost of changing provider they're probably isn't much savings.

Of course with the interest rate differential between the two lenders the longer you fix with Avant the more beneficial the switch would be. The same calculation over five years would a save you €2433 in interest.

Your right there, the other rate on offer from KBC is 2.25% but I have to pay for another valuation. Not much of a difference there really.

Looking at fixing for either 3 or 5 years..

dinneenp

Don't rule out BOI- cash back offer of 2% initially & 1% if you're still with them after 5 years.
3% fixed for 3 years.

Q&A

dinneenp wrote: »

Don't rule out BOI- cash back offer of 2% initially & 1% if you're still with them after 5 years.
3% fixed for 3 years.

The 3% cashback is enticing. Over the short term it would trump the interest savings. But over a period of five years it wouldn't be enough to offset the higher rate of interest.

dinneenp

Q&A wrote: »

The 3% cashback is enticing. Over the short term it would trump the interest savings. But over a period of five years it wouldn't be enough to offset the higher rate of interest.

May be true but get 2% initially, can get a 2 year fixed rate, then move to another bank who may/should have a similar offer.
Bear in mind that rates may rise in the meantime.....

Darc19

I'd go with Avant as they have the lowest roll-off rates and will most likely stay very competitive on fixed rates.

Bank of Ireland will be taking over KBC loans, so your roll-off rate will be over 4% if it was today.

Over 1.5% higher than Avant.

Q&A

Both options above are good options.

An active strategy to move your mortgage regularly to avail of cashback offers some quick wins that shouldn't be overlooked. But it really depends on the OPs willingness to go through the switching process.

For people who don't want to actively manage their mortgage Avant with their low rate is hard to look beyond.

Nothing wrong with combining both. Go around the banks get the cashback then head for the cheaper rate.

Other things to consider are the smaller the mortgage the smaller the gains from % cashback offers and/or lower interest rates. Whereas the cost of switching is fixed (solicitors fees). There is a point where you're better off staying where you are.

Green Mile

I’m about to apply to Avant mortgages via broker and I’m wondering, do Avant mortgages take the last 3 annual bonuses into consideration when offering their loan amount?
I know some banks do, others partially do and others don’t.
If Avant do take this into consideration, how is it calculated?