Bank of Ireland - mortgage prisoner ?

Inneedofadvice1989

I am looking for advice as I’m not sure of the best way forward. 

I have a two part mortgage (previously ported) with Bank of Ireland. 

One part ends at the end of August this year  and the other at the end of May 2026. 

I am looking for the best way to put the parts back together in order to allow us to remortgage to another lender offering better rates. 

Bank of Ireland do not offer a tracker / variable option (that normally come without early repayment charges ) OR a 1 year fixed option even so my only choices appear to be to fix in on another 2 year deal (or longer) and then pay an enormous ERC to break out of this in May (around £5000 I believe) OR allow the part which ends in August to go onto the SVR until next May ( at an increased cost of around £300 per month and pushing the total mortgage over £3000 a month which I’m not sure we can afford for this period of time / over Christmas etc). 

Does anyone have any suggestions on what I can do here ? 

Can Bank of Ireland effectively force me into being a mortgage prisoner as I will not able able to afford the SVR so feel like I am being pushed into fixing in this first part but then will have the same issue in the future as the parts will not match up in order to remortgage anywhere else. 

I have also looked into the mortgage charter and to go into 6 months interest only but I didn’t really understand the process of this and it didn’t look like it would save much money / when did come to remortgage assume a longer term would be required if this was done by the 6 months. 

ACG

A mortgage prisoner is someone who is stuck with their lender, you can switch lenders you just dont want to due to the ERCs - that does not make you a mortgage prisoner. 

Can you do a 3 year fix and then a 2 year fix and get the 2 to match up relatively closely? Then you are only stuck on SVR for a couple of months maybe? 

Hoenir

Inneedofadvice1989 said:

Can Bank of Ireland effectively force me into being a mortgage prisoner as I will not able able to afford the SVR so feel like I am being pushed into fixing in this first part but then will have the same issue in the future as the parts will not match up in order to remortgage anywhere else. 

The fact that you have 2 sub accounts with differing end dates is of your own making. BOI had not part in that decision. 

You've provided no detailed information. As to balances owed. What products you've been offered. 

To incur no ERC's or end up an expensive SVR rate for a period. The best option may well be to maintain the status quo by fixing with new products and reduce the amount owed. Channelling any overpayments into the highest rate of interest or the lowest account balance. Whichever is the most beneficial. 

Inneedofadvice1989

ACG said:

A mortgage prisoner is someone who is stuck with their lender, you can switch lenders you just dont want to due to the ERCs - that does not make you a mortgage prisoner. 

Can you do a 3 year fix and then a 2 year fix and get the 2 to match up relatively closely? Then you are only stuck on SVR for a couple of months maybe? 

Thanks for the explanation. 

So lenders can effectively force you to stay with them in this way then ?

to stay with bank of Ireland when their product rates are a lot higher than other high street lenders would make sense for another 5 years. 

Hoenir

Inneedofadvice1989 said:

ACG said:

A mortgage prisoner is someone who is stuck with their lender, you can switch lenders you just dont want to due to the ERCs - that does not make you a mortgage prisoner. 

Can you do a 3 year fix and then a 2 year fix and get the 2 to match up relatively closely? Then you are only stuck on SVR for a couple of months maybe? 

So lenders can effectively force you to stay with them in this way then ?

 

No, to repeat. You chose to enter a legally binding contract fully aware of the consequences. Presumably as it was the cheapest option at the time. No one forced you to do anything. 

On the flip side lenders themselves would have obtained money to fund fixed rate products. Early redemption incurs them a penalty too and/or potential loss of projected earnings. 

Inneedofadvice1989

Hoenir said:

Inneedofadvice1989 said:

Can Bank of Ireland effectively force me into being a mortgage prisoner as I will not able able to afford the SVR so feel like I am being pushed into fixing in this first part but then will have the same issue in the future as the parts will not match up in order to remortgage anywhere else. 

The fact that you have 2 sub accounts with differing end dates is of your own making. BOI had not part in that decision. 

You've provided no detailed information. As to balances owed. What products you've been offered. 

To incur no ERC's or end up an expensive SVR rate for a period. The best option may well be to maintain the status quo by fixing with new products and reduce the amount owed. Channelling any overpayments into the highest rate of interest or the lowest account balance. Whichever is the most beneficial. 

Thanks for your advice. 

Yes it was of our own making as we wanted to move house without waiting for a further 2 years and again were unable to pay the ERC to break out at this point either.  The balances are too high to enable them to be brought down enough to make much of a difference. 

Balances owed on each are pretty much equal split of - 

£245,000
£245,000

House value - £575,000

The products offered are minimum 2 years at 
4.64 %(£999 product fee)

the remaining half is also on a 5.29% rate until May 2026. 

Current rate 5.59%


SVR 7.44% (+£300) per month 

So I guess it’s down to work out whether it makes more sense in the SVR up until next May OR to lock in again and then pay the ERC next May ?

ACG

Inneedofadvice1989 said:

ACG said:

A mortgage prisoner is someone who is stuck with their lender, you can switch lenders you just dont want to due to the ERCs - that does not make you a mortgage prisoner. 

Can you do a 3 year fix and then a 2 year fix and get the 2 to match up relatively closely? Then you are only stuck on SVR for a couple of months maybe? 

Thanks for the explanation. 

So lenders can effectively force you to stay with them in this way then ?

to stay with bank of Ireland when their product rates are a lot higher than other high street lenders would make sense for another 5 years. 

They are not forcing you to stay with them. I do understand what you are saying and the problem is that it is prohibitive to leave due to the costs. But that is not the same as forcing you. 

I didnt mean stay with them for 5 years. 

I meant (as an example)
Part 1 finishes in say August 2025
Part 2 finishes in say May 2026.

Could you not:
Do a 3 year fix on part 1
Do a 2 year fix on part 2. 

In 3 years time, your 2 deals should come to an end relatively closely and at that point you can sit on SVR for maybe 2-3 months and then move. 

It is one of the downfalls of doing a top up, but there is nothing you can do about it short of paying the ERC. 

Inneedofadvice1989

ACG said:

Inneedofadvice1989 said:

ACG said:

A mortgage prisoner is someone who is stuck with their lender, you can switch lenders you just dont want to due to the ERCs - that does not make you a mortgage prisoner. 

Can you do a 3 year fix and then a 2 year fix and get the 2 to match up relatively closely? Then you are only stuck on SVR for a couple of months maybe? 

Thanks for the explanation. 

So lenders can effectively force you to stay with them in this way then ?

to stay with bank of Ireland when their product rates are a lot higher than other high street lenders would make sense for another 5 years. 

They are not forcing you to stay with them. I do understand what you are saying and the problem is that it is prohibitive to leave due to the costs. But that is not the same as forcing you. 

I didnt mean stay with them for 5 years. 

I meant (as an example)
Part 1 finishes in say August 2025
Part 2 finishes in say May 2026.

Could you not:
Do a 3 year fix on part 1
Do a 2 year fix on part 2. 

In 3 years time, your 2 deals should come to an end relatively closely and at that point you can sit on SVR for maybe 2-3 months and then move. 

It is one of the downfalls of doing a top up, but there is nothing you can do about it short of paying the ERC. 

Ah right. Apologies. This makes sense. 

I need to get the calculator out I think and see what the lesser of all evils is. 

Thanks very much for your advice. Very much appreciated.