Q. We have a standard variable rate mortgage – 4.5% and owe € 175,000 over the remaining term of 19 years ( was originally 35 years ) We received a letter stating we could ask for a new valuation on our home by our lender at their expense. This sounds suspicious and I am wondering should we simply ignore it ? Our home is worth c. € 250,000. Thanks for the advice. Terry – Mitchelstown Co Cork

A. Thanks Terry. Your loan to value, that is what you oe on your home compared to the value of it in percentage terms is 70%. This means you have 30% “equity” – if you sold you would have € 75,000 cash ! I think this is the Permanent TSB deal whereby they, in fairness to them, decided to level the playing surface and allow existing mortgage customers to avail of the same low rates as first time buyers. Essentially there is no discrimination between new and existing customers. They also operate a tiered interest rate system based on the higher the loan to value the higher the interest rate. Your current rate of 4.5% is the highest rate chargeable – and painful. If as you state your home is value at € 250,000 then they will offer you the tiered rate band “Greater than 60% and less than or equal to 70%” a very tidy 3.9% – a saving to you of 0.6%. In money terms , it means your mortgage will decrease by € 43.81 EVERY month. Over the next 19 years, that’s a saving of € 9,988.68 – break open the champagne and send a nice thank you card to the guys in the Permo !



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