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Hybrid Mortgage (50/50 Fixed/Variable)

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  • 27-05-2010 4:23pm
    #1
    dizzydiesel
    Closed Accounts Posts: 162 ✭✭


    Hi folks,

    I read somewhere that you can get a hybrid mortgage that breaks the loan into 2 portions. One portion being fixed at fixed rate % and the other portion being variable rate %.

    http://www.bankofireland.ie/personal/borrowing/mortgages/trade_up/index.html

    The beauty of this is to allow you lodge lump sums into the variable portion of the loan without incurring penalties. (This wouldn't be the case if you had a fixed rate loan)

    It also hedges your bets against losing money when interest rates fluctuate.

    Anyway, does anyone know which institutions are providing such mortgages? Or is it only BOI?
    Anyone have one and can comment on how they work?


    Below is actual wording on BOI site:
    "Option to split your rate - avail of the comfort of a fixed rate and the management of a variable rate combined. You can assign your mortgage whichever way you want, for example you could have 50% variable and 50% fixed, or 20% variable and 80% fixed, the choice is yours."

    Cheers,
    dizzydiesel


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    #2
    MatureStudent
    Registered Users Posts: 33 ✭MatureStudent


    I split an existing mortgage with EBS (in 2005) - didn't have to be 50/50, I decided how much in each. they just set up a second account for part of it, so one account fixed and one variable.

    Only problem was with tax relief at source which I was told they would handle - they didn't and I had to reclaim it the following year.

    They worked exactly as you expect, made lump sum payments from the variable one with no penalties and let the fixed one run till the end of the term.


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    #3
    The Rooster
    Registered Users Posts: 4,516 ✭✭✭The Rooster


    I can't imagine any bank that wouldnt do this. All it is is splitting the mortgage in two.

    I have done it twice in the past, with Permanent TSB and with EBS.

    If you can't decide whether to go fixed or variable (like me), its a good middle ground.


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    #4
    dizzydiesel
    Closed Accounts Posts: 162 ✭✭dizzydiesel


    Thanks for the feedback folks.

    I see this type of option being very beneficial.
    I'm going to request this from my own bank.


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    #5
    dotsman
    Registered Users Posts: 3,636 ✭✭✭dotsman


    The Rooster wrote: »
    I can't imagine any bank that wouldnt do this. All it is is splitting the mortgage in two.

    I have done it twice in the past, with Permanent TSB and with EBS.

    If you can't decide whether to go fixed or variable (like me), its a good middle ground.

    Yup, it's fairly standard. Have mine split 3-ways with AIB (long story)!


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    #6
    emeraldgreen
    Closed Accounts Posts: 34 ✭emeraldgreen


    can anyone explain why this type of mortgage would be of benefit? im applying for a mortgage at the minute, wouldnt be great on all the different options you could go for, but i was thinking a fixed rate for as long as possible because ive heard the interest rates will be going up in the next few months.


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    #7
    NewDirection
    Registered Users Posts: 223 ✭✭NewDirection


    One point to note.

    I tried to do this on an existing mortgage with the Bank of Ireland when I came off my fixed rate earlier this year and was told they could not split an existing mortgage.

    So I've upped and moved to a different mortgage provider, and now have a 65-35 split.


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