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05-04-2019, 10:50   #46
th283
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Originally Posted by nok2008 View Post

Cant understand why more people dont look at these options, especially with Loan to value ratio with the massive increase in "valuation". We had nearly a 55% LTV and we were paying the higher >80% interest rate. NO solicitor fees for moving within the same bank..
Does the LTV make a big difference in repayments? I took out a mortgage last year with a 90% LTV, renovated the house and going by comparable houses the LTV should be about 65% now, is it worth my while talking to BOI about it?
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05-04-2019, 10:54   #47
sternn
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Does the LTV make a big difference in repayments? I took out a mortgage last year with a 90% LTV, renovated the house and going by comparable houses the LTV should be about 65% now, is it worth my while talking to BOI about it?
Definitely contact the bank. Most people don't bother ever getting their house revalued for mortgage purposes. Banks generally offer better interest rates as the LTV gets lower.
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05-04-2019, 11:13   #48
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Does the LTV make a big difference in repayments? I took out a mortgage last year with a 90% LTV, renovated the house and going by comparable houses the LTV should be about 65% now, is it worth my while talking to BOI about it?
Yes if your LTV is less than 80% you should drop to a lower interest rate.
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05-04-2019, 11:18   #49
nok2008
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just checked there.
The LTV makes no difference on fixed interest rates for BOI.

However variable as below for BOI;
<60% - 3.9%
61-80 4.2%
>80 - 4.5%

https://personalbanking.bankofirelan...es/rate-table/


I think that the difference is bigger for aib but check the websites if necessary.
THere are some good mortgage broker sites out there that you can run through the difference options very easily as the bank websites are a bit clunky and harder to use and you will easily be able to see what the different repayments are. Only fee for moving internally in the bank miught be a valuation of 150.
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05-04-2019, 12:08   #50
grahamor
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Are BOI likely to offer you a better rate if you are considering breaking out of a fixed rate and switching banks ?
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05-04-2019, 12:09   #51
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Thanks for tip OP

Tried today with KBC but would be over 2 grand to break but she said it changes daily so I should ring back in a week or two

I should have asked when I was on the phone but anyone know if these market rates are publicly available?

It's only a 5 min call but it would be useful to know when it's favourable to ring so less wasting everybody's time
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05-04-2019, 12:58   #52
GaryCocs
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Originally Posted by KD11 View Post
She did say that but had no idea why some people have to pay a few euro and others a few hundred euro. One customer wanted to break 6months into a 3yr term (€300,000) and it actually cost them zero. Like someone else mentioned it can change week by week what figure you get. If i have to pay that amount anyway, I may as well switch banks.
Examples taken from another site.

Some worked Examples:
Example 1 - I fix and I break immediately
I fix my rate with Bank of Ireland today for 2 years at 3.2%.
I decide 1 month later that I want to switch to EBS to get the 2% cash back from them.
The rate BoI borrowed from the market last month, and the rate they can get for lending to the market today is the same, so there might be a marginal breakage cost.
(In this case there might be a marginal breakage cost, as there are dealing costs in settling fixed rate contracts)


Example 2 - The rates at which banks lend to each other fall
I borrow €100,000
I fix my rate with Bank of Ireland today for 2 years at 3.2%. BoI's funding rate in the market is 0%.
After one year, I decide I want to switch to another lender.
The one year inter-bank Market rate is now -0.4% in the market.
Bank of Ireland can relend to the market at -0.4% instead of the 0% they borrowed at so the breakage fee is
€100,000@ 0.4% x 1 year = €400

Example 3 - rates rise
I borrow €100,000
I fix my rate with Bank of Ireland today for 2 years at 3.2%. BoI's funding rate in the market is 0%.
After one year, I decide I want to switch to another lender.
The one year interbank rate is now +0.25%.
Bank of Ireland can relend at +0.25% instead of the 0% they originally borrowed for, so there is no cost to them, so there is no breakage fee to the customer.
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05-04-2019, 13:06   #53
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This isn't a bargain alert, it's consumer advice. This title of this thread should be "review your finances on a regular basis"

The OP got a good deal because it was in the bank's interest to do so. He/she had one year left on a fixed rate. At the end of that year, he might have taken his business elsewhere, but by giving him a nice deal, the bank now has his business for another two years.

If someone else rings up and they have three or four years left on a fixed rate, or wants to move to a different bank, there is a lot less incentive for the bank to do anything for them and they're not going to get as good a quote.

So if you can find a better mortgage, get a reasonable fee to break your fixed rate and factor in legal fees etc - and still come out on top, then it's a bargain.
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05-04-2019, 13:11   #54
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I always thought thought those "2% cashback on drawdown" offers stated you had to stay with the bank for X years or the cashback would have to be repaid.

But from reading this, you can change, get cashback, change, get cashback, ad infinitum?
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05-04-2019, 13:14   #55
lawred2
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I always thought thought those "2% cashback on drawdown" offers stated you had to stay with the bank for X years or the cashback would have to be repaid.

But from reading this, you can change, get cashback, change, get cashback, ad infinitum?
central bank pulled the plug on that practice

as they did with unjustifiable/penal break fees
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05-04-2019, 13:15   #56
amcalester
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Originally Posted by Former Former View Post
The OP got a good deal because it was in the bank's interest to do so. He/she had one year left on a fixed rate. At the end of that year, he might have taken his business elsewhere, but by giving him a nice deal, the bank now has his business for another two years.

If someone else rings up and they have three or four years left on a fixed rate, or wants to move to a different bank, there is a lot less incentive for the bank to do anything for them and they're not going to get as good a quote.

So if you can find a better mortgage, get a reasonable fee to break your fixed rate and factor in legal fees etc - and still come out on top, then it's a bargain.
The bank didn't give the OP a deal, the cost to break would have been the same if he was moving to another bank or staying with his existing.

Banks have no control over how much it costs to break a fixed term mortgage
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05-04-2019, 13:17   #57
amcalester
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Quote:
Originally Posted by Soarer View Post
I always thought thought those "2% cashback on drawdown" offers stated you had to stay with the bank for X years or the cashback would have to be repaid.

But from reading this, you can change, get cashback, change, get cashback, ad infinitum?
Quote:
Originally Posted by lawred2 View Post
central bank pulled the plug on that practice

as they did with unjustifiable/penal break fees
The banks changed the structure of their cash back offerings, instead of 3% upfront and a clawback it's now 2% upfront and 1% after 5 years.
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05-04-2019, 13:21   #58
Soarer
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Originally Posted by lawred2 View Post
central bank pulled the plug on that practice

as they did with unjustifiable/penal break fees
Cheers lawred2.

So you could, in theory, swap every couple of months without penalty?

Also, just for complete pig iron....
January, I move from AIB to BOI, get cashback.
July, I move from BOI to EBS, get cashback.
January, I move from EBS to KBC, get cashback.
July, I move BACK to AIB from KBC....get cashback?
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05-04-2019, 13:25   #59
sternn
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Originally Posted by Former Former View Post
This isn't a bargain alert, it's consumer advice. This title of this thread should be "review your finances on a regular basis"

The OP got a good deal because it was in the bank's interest to do so. He/she had one year left on a fixed rate. At the end of that year, he might have taken his business elsewhere, but by giving him a nice deal, the bank now has his business for another two years.

If someone else rings up and they have three or four years left on a fixed rate, or wants to move to a different bank, there is a lot less incentive for the bank to do anything for them and they're not going to get as good a quote.

So if you can find a better mortgage, get a reasonable fee to break your fixed rate and factor in legal fees etc - and still come out on top, then it's a bargain.
After doing a bit more research, the EU directed the banks to change the way they calculated the breakage for those in a fixed rate loan back in December 2017. The EU directive means banks can only charge a penalty based on what they would earn from keeping the mortgage funds on deposit. Anyone looking at deposit interest rates at the moment will see that they are extremely low. Not all banks have to change the way they calculate a break fee, but BOI are one of those that have done so.

Obviously those who have a longer fixed rate period and bigger mortgage value will pay more. But if the bank uses this method of calculation and the drop in mortgage interest rate is somewhat significant, the savings in interest being paid will outweigh the charges.

Yes, this is not a "bargain" by your definition, but it should be made aware to people as it's a 5 minute phone call, signing a letter that is posted out to you by the bank, that may potentially save someone / a couple a decent amount in interest per month.

I think most people would agree that if you had to pay less money to a bank by following a couple of steps that they were not aware of, then it is a bargain.
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05-04-2019, 14:05   #60
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Currently switching to a lower fixed rate of 2.9% for 5 years after breaking out of 7 year fixed at @3.99%. am currently 2.5 years in to the 7 year rate. It's costing 1500 with Ulster Bank but the savings over 5 years are just over 5000. Will use the additional savings to overpay @ 10% each month to increase the savings.

Will look at this every year from now on.
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