Variable rate

Donadea Leo

gmisk wrote: »

I am currently making a decision with regards going fixed or variable with ebs.
http://www.ebs.ie/interest-rates-and-calculators/home-loan-rates.html

Any advice much appreciated!

Im tempted to fix tbh as even if the variable rate is cut (which sounds like it is likely)
3.5 (if going 1 year fixed), 3.8 (if going for 3 years) seems reasonable/
The only thing putting me off is the standard variable rate after this time period of 4.33%

Variable at the minute for me would be 4.2% (as in that 80/90% lending bracket).
Help!

ok i m no expert but surely that 4.33 % is just a guestimate based on current variable rates as if interest rates are reduced your variable rate post fixed rate will also reduce. Correct me if i m wrong wise mortgage people

zagmund

Well, yeah, otherwise it would be called a fixed rate.

z

gmisk

Donadea Leo wrote: »

ok i m no expert but surely that 4.33 % is just a guestimate based on current variable rates as if interest rates are reduced your variable rate post fixed rate will also reduce. Correct me if i m wrong wise mortgage people

I think....the current variable rate is 4.22% (this is likely to be cut by 0.25% I think)
The standard variable is 4.33%...I didnt think this would be cut? (well thats what was indicated in phone to me by EBS)
The way EBS explained it was there is a standard variable and a tiered variable.....I am lost tbh.....

loyatemu

Noonan said yesterday he'd be calling all the banks in this month to "discuss" the issue. AIB have already said they will probably reduce rates in the next 2 months - AIB, EBS and PTSB are all state owned and ultimately will probably heed Noonan's "advice".

BOI's head honcho is a hard-nosed jerk so they'll probably resist the pressure in the short term at least, but eventually they'll have to follow the other banks or risk losing business. I definitely wouldn't sign up to any fixed rate this month...

gmisk

loyatemu wrote: »

Noonan said yesterday he'd be calling all the banks in this month to "discuss" the issue. AIB have already said they will probably reduce rates in the next 2 months - AIB, EBS and PTSB are all state owned and ultimately will probably heed Noonan's "advice".

BOI's head honcho is a hard-nosed jerk so they'll probably resist the pressure in the short term at least, but eventually they'll have to follow the other banks or risk losing business. I definitely wouldn't sign up to any fixed rate this month...

Do you think this means they will also reduce the standard variable rate (4.33% in EBS)? or does it just mean the variable rate for new customers? (4.2% in EBS).

gmisk

Looks like Ulster Bank and BOI wont be following suit.
http://www.irishtimes.com/news/ireland/irish-news/boi-and-ulster-bank-rule-out-cuts-to-variable-mortgage-rates-1.2193822

My question is will that standard variable rate be likely to come down in 5 years (4.33% currently)?
As I really think fixing now for 5 years at 3.9% now is pretty appealing to me.....

Lombardo86

gmisk wrote: »

Looks like Ulster Bank and BOI wont be following suit.
http://www.irishtimes.com/news/ireland/irish-news/boi-and-ulster-bank-rule-out-cuts-to-variable-mortgage-rates-1.2193822

My question is will that standard variable rate be likely to come down in 5 years (4.33% currently)?
As I really think fixing now for 5 years at 3.9% now is pretty appealing to me.....

Nobody know whether the banks will do it or they won't.

If you are happy at 3.9 for the next 5 years and think you will be comfortable repaying that, you should go for it. The security of knowing what you are paying for the next 5 years i like..

Will the rates drop? maybe. When? Who knows. For how long? Nobody knows. Will it drop to below 3.9 if they even move.. not so sure

gmisk

You are right the more I think about it the 5 year fixed at 3.9% makes more sense for me at this stage, I can save money if needs be and at the end of the 5 years pay of a lump sum from mortgage I think.

And if at that stage if the standard variable rate mortgage isn't great I can switch my mortgage I guess (I know a lot of banks contribute towards the fees of doing this).

Lombardo86

gmisk wrote: »

You are right the more I think about it the 5 year fixed at 3.9% makes more sense for me at this stage, I can save money if needs be and at the end of the 5 years pay of a lump sum from mortgage I think.

And if at that stage if the standard variable rate mortgage isn't great I can switch my mortgage I guess (I know a lot of banks contribute towards the fees of doing this).

I don't claim to be a guru or anything on this topic, that was just my opinion.. i am in a similar situation coming off fixed and thinking about what to do. I think i like the security of long term fixed at this point.

If you are thinking of additional savings and lump sums, then 5 year may be too long.. go 2-3 year maybe. The earlier any lump sum comes off will benefit long term with compound interest taken into consideration.

loyatemu

gmisk wrote: »

Looks like Ulster Bank and BOI wont be following suit.
http://www.irishtimes.com/news/ireland/irish-news/boi-and-ulster-bank-rule-out-cuts-to-variable-mortgage-rates-1.2193822

My question is will that standard variable rate be likely to come down in 5 years (4.33% currently)?
As I really think fixing now for 5 years at 3.9% now is pretty appealing to me.....

What's your loan-to-value? - Ulster Bank have a 3 year fixed rate of 3.65% if LTV is less than 60%

Rates in the rest of Europe are much much lower than here - this is partly because the market here is skewed by tracker mortgages (which the banks are at best breaking even on) and defaulters (where the banks are more or less prevented from repossessing); but the banks positions are likely to improve over time (this is already happening) and there is political pressure on them to stop using variable rates to make up the shortfall...

Ultimately though nobody knows what will happen, if you're happy with the fixed rate, go for it.

gmisk

loyatemu wrote: »

What's your loan-to-value? - Ulster Bank have a 3 year fixed rate of 3.65% if LTV is less than 60%

Rates in the rest of Europe are much much lower than here - this is partly because the market here is skewed by tracker mortgages (which the banks are at best breaking even on) and defaulters (where the banks are more or less prevented from repossessing); but the banks positions are likely to improve over time (this is already happening) and there is political pressure on them to stop using variable rates to make up the shortfall...

Ultimately though nobody knows what will happen, if you're happy with the fixed rate, go for it.

I am in the 80-90% bracket unfortunately (so for 5 years fixed with Ulster bank that is 4.2% (EBS 3.9%)).

As you say political pressure should drive the variable down (4.2% atm with EBS/AIB) and they do have bargaining power with AIB....

colm_c

When I originally got my mortgage offer 12 months ago, I went with a variable rate Ulster Bank and I was able to negotiate it to 4% because I went to the branch in my home town (down the country) and they obviously don't have as many mortgages in certain areas so have some discretion to give discounts on rates.

To top it off, I got a letter in the post in Jan 2015 to stay that they would be reducing the variable mortgage rate by 0.2%. For me this means they've reduced my rate to 3.8% variable.

My LTV was 90%.

gmisk

colm_c wrote: »

When I originally got my mortgage offer 12 months ago, I went with a variable rate Ulster Bank and I was able to negotiate it to 4% because I went to the branch in my home town (down the country) and they obviously don't have as many mortgages in certain areas so have some discretion to give discounts on rates.

To top it off, I got a letter in the post in Jan 2015 to stay that they would be reducing the variable mortgage rate by 0.2%. For me this means they've reduced my rate to 3.8% variable.

My LTV was 90%.

Wow never heard of that before...I just thought the rates were like that for everyone....

Another option would be to go 50/50 so half fixed and half variable....at least this means I could over pay....tempting!

DulchieLaois

I reckon banks are being pressured into reducing their variable rates which they will do but not by much.

I cant see banks reducing their variables more than by 0.5%, properly most likley by 0.25 as a token gesture to sweeten everyone and keep the government of their backs.

So, if your fixed is more than or 0.5% off your variable, then tis a good idea to go with fixed now

gmisk

DulchieLaois wrote: »

I reckon banks are being pressured into reducing their variable rates which they will do but not by much.

I cant see banks reducing their variables more than by 0.5%, properly most likley by 0.25 as a token gesture to sweeten everyone and keep the government of their backs.

So, if your fixed is more than or 0.5% off your variable, then tis a good idea to go with fixed now

With EBS
Currently - Fixed for 5 years is 3.9%, variable is currently 4.2%.
(variable after the 5 years would be 4.33% but I was told this would drop if the 4.2 drops).

I just got off the phone to EBS, I decided to go for a 50/50 split (fixed and variable) as things are. So that allows me to over pay on the variable part over the 5 years if I like. I was told I can change this up until the day of mortgage draw down.

DulchieLaois

I see that AIB and EBS have cut their varibale rates, I wonder if BOI and Ulster Bank will follow through ???

Call me Al

gmisk wrote: »

Wow never heard of that before...I just thought the rates were like that for everyone....

Another option would be to go 50/50 so half fixed and half variable....at least this means I could over pay....tempting!

I asked our bank (UB) last year to do part fixed and part variable and I was told that I couldn't do this.
Have things changed? Is this being offered?

Call me Al

DulchieLaois wrote: »

I see that AIB and EBS have cut their varibale rates, I wonder if BOI and Ulster Bank will follow through ???

UB dropped their rates slightly a couple of months ago to 4.3%.
No doubt they will claim that they are already doing their part.

loyatemu

DulchieLaois wrote: »

I see that AIB and EBS have cut their varibale rates, I wonder if BOI and Ulster Bank will follow through ???

UB have already said they won't, BOI were non-committal but Richie Boucher is a hard-nosed guy and will only do it if there's something in it for BOI.

Noonan still has to meet all the banks this month, so who knows - even with the cut AIBs rates are still way above what they charge in the north. In the UK fixed rates have dropped well below 2%.

I would've thought a bank (existing or new entrant) introducing a really low fixed rate for new business here would clean up on new mortgages and switchers...

MICKEYG

loyatemu wrote: »

UB have already said they won't, BOI were non-committal but Richie Boucher is a hard-nosed guy and will only do it if there's something in it for BOI.

Noonan still has to meet all the banks this month, so who knows - even with the cut AIBs rates are still way above what they charge in the north. In the UK fixed rates have dropped well below 2%.

I would've thought a bank (existing or new entrant) introducing a really low fixed rate for new business here would clean up on new mortgages and switchers...

Yes, and that is the big question. Why is no new bank entering the market. Surely a UK bank would clean up here? Is there a block on new licences?

Greyian

MICKEYG wrote: »

Yes, and that is the big question. Why is no new bank entering the market.

Banks aren't entering the market because our government seems hellbent on preventing repossessions.

Offering secured loans (which are at far lower rates than unsecured loans), without having the ability to seize in the security in the event of non-payment, is not an attractive option for banks.

DulchieLaois

Hard nosed alright

http://www.independent.ie/business/personal-finance/no-rate-cut-on-the-cards-for-bank-of-ireland-or-ulster-bank-variables-31184058.html

jon1981

Why is Haven dropping theres by .38% (i'm a Haven customer) and AIB by .25%? The current SVR are the same.

loyatemu

jon1981 wrote: »

Why is Haven dropping theres by .38% (i'm a Haven customer) and AIB by .25%? The current SVR are the same.

no reason why AIB, EBS and Haven have different rates- they should be merging all their operations together at this stage.

jon1981

loyatemu wrote: »

no reason why AIB, EBS and Haven have different rates- they should be merging all their operations together at this stage.

Yeah, it's odd. Unless Haven as a seperate legal entity is less exposed?!

DulchieLaois

I have got a letter from BOI to fixed the mortgage at 3.85% for 3 years whereas i have variable at 4.35%

I am just wondering should i wait and see what pressure the government will force on BOI on their variable rates ?

Rowley Birkin QC

We're looking at doing a split mortgage, 50% on variable and 50% on fixed for 3 years at 3.8%.

Reason being I get commission each month and want to over pay each month so I'll take the variable half, she will prefer to have a fixed cost for now so take the other half.

Anyone see issues with this? With AIB.

MarkAnthony

Other than the only way I can see variables going in the short term is down, no. However you're a randomer on the interweb same as me so do what you feel is right.

In all honesty at least with a 50/50 split you're hedged somewhat.

The_Conductor

DulchieLaois wrote: »

I have got a letter from BOI to fixed the mortgage at 3.85% for 3 years whereas i have variable at 4.35%

I am just wondering should i wait and see what pressure the government will force on BOI on their variable rates ?

The government have no sword to hang over the heads of the execs in BOI. BOI were the only lender to escape government ownership- and have fully repaid and then some- all money the exchequer put into them.

Whatever about any of the other lenders- the government do not have leverage over BOI in the manner they do over AIB, PTSB etc.

DulchieLaois

So, should I just take the 3.8% FIXED offered then ?