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Is there any point in fix rate for 1 year?

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  • 05-03-2013 10:27pm
    #1
    Gadeia
    Registered Users Posts: 18 ✭


    We are in the last few steps of buying a house and its time to decide if we want to fix the rate or not.

    After talking to the bank today it seems that the rate to fix it for 1year is lower than the variable. I have been trying to get information from everywhere while we were going through this whole process but this has really surprised me.

    For us it would be good to get it fix for a year as it would be handy to know how much we are paying every month while we decorate and improve the house and get use to all the bills and so many other changes but I cant stop thinking that there's a surprise waiting at the end of that year and it wont be a good one. Its there anything else that I should know about this?

    Thanks a lot.


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    #2
    AlmightyCushion
    Moderators, Education Moderators, Technology & Internet Moderators Posts: 35,078 Mod ✭✭✭✭AlmightyCushion


    If the fixed rate is lower than the variable rate then definitely fix it. Variable rates are increasing, even though the ECB rate is decreasing and it will save you money. Just keep an eye on the variable rates and make sure that you can afford them once your fixed rate is finished.


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    #3
    NIMAN
    Registered Users Posts: 33,594 ✭✭✭✭NIMAN


    Is there a fee involved to fix?


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    #4
    killers1
    Registered Users Posts: 1,443 ✭✭✭killers1


    Gadeia wrote: »
    We are in the last few steps of buying a house and its time to decide if we want to fix the rate or not.

    After talking to the bank today it seems that the rate to fix it for 1year is lower than the variable. I have been trying to get information from everywhere while we were going through this whole process but this has really surprised me.

    For us it would be good to get it fix for a year as it would be handy to know how much we are paying every month while we decorate and improve the house and get use to all the bills and so many other changes but I cant stop thinking that there's a surprise waiting at the end of that year and it wont be a good one. Its there anything else that I should know about this?

    Thanks a lot.

    At the moment the AIB 1 yr fixed rate is lower than the variable for LTV's >80% - 4.15% fixed V 4.24% variable. There is no surprise waiting for you at the end of the year. Basically you'll get a letter in 12 months giving you the option of taking another fixed rate or moving to the variable & you'll make your decision based on the rates at that time. It's unusual ofr a fixed rate to be cheaper than the variable but happens occasionally. In AIB's case it's because the variable rate has increased by 1% in the past year but the fixed rates have remain unchanged (for now).


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