Changing land purchase loan providers

PoorFarmer · 15-02-2019 4:21pm #1

Wondering if anybody here has had any success in switching a land purchase business loan to a different provider much like switching a mortgage.

Bought a farm a few year back that is next door to the home farm. Due to me being very unprepared and not having a herd number of anything sorted out the banks were very unwilling to lend money. Only one lender was willing to entertain me but the rate is north of 7%. With GLAS and SFP covering the repayments it's basically paying for itself but I would still like to drop the rate cos the bustards are taking enough off me. I have approached the bank I got the loan from and they are completely unwilling to drop the rate as you can imagine. Thanks to a bit of help from the old man to start me off the loan is only about 40% of the land value.

Has anyone here successfully switched a similar type of loan to negotiate a better rate? What extra costs would be involved in switching if it is possible?

Bass Reeves · 16-02-2019 11:17am

I imagine that the loan is sub 100K. Switching will cost you around 3k at a guess biggest fee will be lenders solicitors which you have no control over. This is the big issue with land registery gone digital there was a stage if you gave the physical deeds to the bank for well secured loans they were happy. 7% is crazy money for a secured loan. All you can do is shop around because of fees for secured look at unsecured loans. Banks often give goodish rates around 5% for unsecured loans to clients with good records when the amount is over 50K. Another option might be local credit unions. Most have an issue in that there deposit/loan ration is crazy. They might do a 5 ish% deal on such a loan with less than 10% share

Who2 · 16-02-2019 2:34pm

Boi were at 5.7% unsecured on anything up to 125k last week if that’s any help. I didn’t really shop anywhere else yet so can’t tell you much about the others. As far as I’m aware 5-6% is about the run of things until you hit the 300k plus mark.

K.G. · 16-02-2019 3:17pm

2016 land loan deal is currently at 3.25 %.and its hard enough to money for that

jimmy G M · 16-02-2019 11:34pm

OP, IMO you should have no bother switching to another Bank at a lower rate assuming your repayment record is good.

You are a much better proposition / lower risk than you were when you bought the land as you now have your herd no, GLAS, payments etc sorted, you have a track record of meeting the loan repayments over the last few years and the loan to value of security is low.

I can't understand how your existing Bank would let you go, as they took a risk with you day 1 which has worked out, so now the are going to let a good customer walk out the door?

Go to another Bank, get an approval in principal and an indicative rate from them, go back to your existing Bank with the offer and look that they at least match the rate.... it will save you hassle and legal fees if you stay with you existing Bank.... or just leave them if you are not feeling the love.

Regarding a rate some others have already given you an indication - you'll prob be looking at 4 - 5 % ?

Johnbkeane · 16-03-2020 12:57am

Hi just wondering did you manage to get the loan switched to another bank with a lower rate? I’m interested in land beside me but I asked bank of Ireland and a secured land loan is 5.67 % which is very high. I know Claremorris credit union are doing 5.5% secured Agri Loan and AIB are the same. I asked the bank of Ireland Agri advisor about the 3.6% or 3.8% but he said it was 6.76 unsecured or 5.76 secured.

jimmy G M wrote: »

OP, IMO you should have no bother switching to another Bank at a lower rate assuming your repayment record is good.

You are a much better proposition / lower risk than you were when you bought the land as you now have your herd no, GLAS, payments etc sorted, you have a track record of meeting the loan repayments over the last few years and the loan to value of security is low.

I can't understand how your existing Bank would let you go, as they took a risk with you day 1 which has worked out, so now the are going to let a good customer walk out the door?

Go to another Bank, get an approval in principal and an indicative rate from them, go back to your existing Bank with the offer and look that they at least match the rate.... it will save you hassle and legal fees if you stay with you existing Bank.... or just leave them if you are not feeling the love.

Regarding a rate some others have already given you an indication - you'll prob be looking at 4 - 5 % ?

148multi · 16-03-2020 7:46pm

Johnbkeane wrote: »

Hi just wondering did you manage to get the loan switched to another bank with a lower rate? I’m interested in land beside me but I asked bank of Ireland and a secured land loan is 5.67 % which is very high. I know Claremorris credit union are doing 5.5% secured Agri Loan and AIB are the same. I asked the bank of Ireland Agri advisor about the 3.6% or 3.8% but he said it was 6.76 unsecured or 5.76 secured.

Don't BOI have a special low interest rate loan for young farmers

PoorFarmer · 28-03-2020 10:51pm

Johnbkeane wrote: »

Hi just wondering did you manage to get the loan switched to another bank with a lower rate? I’m interested in land beside me but I asked bank of Ireland and a secured land loan is 5.67 % which is very high. I know Claremorris credit union are doing 5.5% secured Agri Loan and AIB are the same. I asked the bank of Ireland Agri advisor about the 3.6% or 3.8% but he said it was 6.76 unsecured or 5.76 secured.

Hey, well ended up buying a few more acres late last year so managed to refinance then with same bank but with a vastly reduced rate. Had got a quote from BoI for the whole lot refinanced and AIB matched it. So currently have the whole lot on 4.65% which is a hell of alot better.

jimmy G M · 29-03-2020 10:54am

PoorFarmer wrote: »

Hey, well ended up buying a few more acres late last year so managed to refinance then with same bank but with a vastly reduced rate. Had got a quote from BoI for the whole lot refinanced and AIB matched it. So currently have the whole lot on 4.65% which is a hell of alot better.

Good stuff - Banks are usually not keen to let good existing customers leave so its always worth pushing your existing bank for a better deal, especially of you have a good offer from a rival Bank.

Mooooo · 29-03-2020 11:09am

Those rates are still crazy for secured loans. Banks cost of funds is basically 0 so all that is pure margin. Gouging fcukers

Dazzler88 · 22-04-2020 7:07pm

I am speaking with the banks about a loan for a farm beside myself, I am a qualified young farmer.

Banked with AIB all my life, got quoted a rate for 5.5% on 70% LTV over 10 or 15 years, Ulster Bank has quoted a rate of 4.5% on 70% LTV over 20 years.

Waiting to hear back from BOI, will update you as it progresses.

duffysfarm · 23-04-2020 8:54am

5.5% seems a bit on the high side - will be interesting to see what BOI come back with

Dazzler88 wrote: »

I am speaking with the banks about a loan for a farm beside myself, I am a qualified young farmer.

Banked with AIB all my life, got quoted a rate for 5.5% on 70% LTV over 10 or 15 years, Ulster Bank has quoted a rate of 4.5% on 70% LTV over 20 years.

Waiting to hear back from BOI, will update you as it progresses.

oxjkqg · 23-04-2020 10:07am

On 70% LTV here on 300k, in the process at the minute
AIB all my life and parents lives, 4% was there first offer
BOI came back at 3.55%, AIB ended up at 3.5%.
20 years

mf240 · 23-04-2020 10:11am

The best way to save money is to get it back into the fcukers as fast as ever you can.

cute geoge · 23-04-2020 10:18am

mf240 wrote: »

The best way to save money is to get it back into the fcukers as fast as ever you can.

100% agree but you would not want to be tied to big repayments when things go belly up just like this year .Is there penalty for repaying extra money the good years with a fixed rate loan

K.G. · 23-04-2020 10:45am

Nothing wrong with making payments over 19 or 18 years either as its a great way to have a little breathing space a bad year and you dont miss it most years.people dont seem to understand that a loan is an account that use in reverse and right now its the only account paying 3.5 %plus

Changing land purchase loan providers

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