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Credit Union or Bank for buying house?

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  • 18-03-2014 5:30pm
    #1
    diarystuff
    Registered Users Posts: 3 ✭


    Hello!

    I am looking at taking out a small mortgage of €50,000. I can get this from the bank or the credit union said that they could do it as well as I have a lot of savings with them. What I am asking is would it be better to go with the bank or the credit union.

    The bank has lower interest rates so the loan costs less and I can pay it over a longer time.

    The Credit union has higher interest rates, the longest loan time is 10 years but they give a flexibility to pay it off faster if I have more work and to pay lump sums with no penalty. They are also more flexible with payments etc.

    Any opinions?? Thanks!
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    #2
    chris85
    Registered Users Posts: 4,502 ✭✭✭chris85


    diarystuff wrote: »
    Hello!

    I am looking at taking out a small mortgage of €50,000. I can get this from the bank or the credit union said that they could do it as well as I have a lot of savings with them. What I am asking is would it be better to go with the bank or the credit union.

    The bank has lower interest rates so the loan costs less and I can pay it over a longer time.

    The Credit union has higher interest rates, the longest loan time is 10 years but they give a flexibility to pay it off faster if I have more work and to pay lump sums with no penalty. They are also more flexible with payments etc.

    Any opinions?? Thanks!

    A banks mortgage you will generally get as a variable rate mortgage (unless you decide to fix at the start) and part of conditions of a variable mortgage are there would be no penalties for extra payment or early redemption of the loan so you can pay a variable mortgage with the bank back over 10 years if you want to. The mortgage agreement may be for longer but there is no issue with paying back early. Mortgage rates are at least half of loan rates so a no brainer to me on a balance this big.


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    #3
    corkonion
    Registered Users Posts: 523 ✭✭✭corkonion


    Yes, once you are on a variable rate your monthly repayment in reality becomes your minimum payment, I have in the past made two sizable lump sum payments off my mortgage balance and I had the choice to have it reduce my term or my future monthly payments. If you get approval, I would opt for the bank.


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