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Extend fixed rate term or sit tight?

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  • 21-12-2009 11:11am
    #1
    poker_pro
    Registered Users Posts: 10 ✭


    My mortgage(285k) is fixed for 2 more years at 4.73%. Should I extend my fixed rate term out to 5 years? The bank are offering me 4.6%. It's a long story but it would cost me €3,400 in early break charges. Basically what i'd be buying is a guarantee for years 3, 4 and 5 as I already have my current fixed rate for the next 2 years. That's approx €100 per month I'd be paying to have fixed repayments in those 3 years. Or would I be better keeping the €3,400 in my pocket and seeing what happens in time?

    What's the forecast for variable rates in the 3-5 year period.

    cheers.


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    #2
    Priapus
    Closed Accounts Posts: 114 ✭✭Priapus


    poker_pro wrote: »
    My mortgage(285k) is fixed for 2 more years at 4.73%. Should I extend my fixed rate term out to 5 years? The bank are offering me 4.6%. It's a long story but it would cost me €3,400 in early break charges. Basically what i'd be buying is a guarantee for years 3, 4 and 5 as I already have my current fixed rate for the next 2 years. That's approx €100 per month I'd be paying to have fixed repayments in those 3 years. Or would I be better keeping the €3,400 in my pocket and seeing what happens in time?

    What's the forecast for variable rates in the 3-5 year period.

    cheers.

    Hey! To be honest the query isn't that clear. So they will charge you €3,400 extend your fixed rate period. This doesn't sound right. Maybe I'm missing something. Mortgage providers like to have mortgagees on fixed rate. I don't get why they are penalising you for extending the current fixed period.

    Personally I'd lock in the fixed rate, as SVR will be increasing over the next few years. But locking into fixed or staying on variable is a decision that requires a lot of inputs.


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