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Reducing mortgage term query

  • 23-10-2020 12:08am
    #1
    jayjay2010
    Registered Users Posts: 505 ✭✭✭


    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!


Comments

  • #2
    Thestart
    Registered Users Posts: 130 ✭✭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.


  • #3
    lau1247
    Registered Users Posts: 2,113 ✭✭✭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

    West Dublin, ☀️ 7.83kWp ⚡5.66 kWp South West, ⚡2.18 kWp North East



  • #4
    Geuze
    Registered Users Posts: 13,032 ✭✭✭✭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.


  • #5
    con747
    Registered Users Posts: 5,717 ✭✭✭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/

    Don't expect anything from life, just be grateful to be alive.



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