Variable rate

The_Conductor · 20-05-2015 10:54am

Its half a percent reduction on a variable rate.
The bank wouldn't be offering it- if they felt they could make more money keeping you on the higher rate.
Personally I'd keep my powder dry and see what happens.
If AIB and the other main lenders reduce their rates- BOI will feel obliged to follow suit (or else they'll loose swathes of their customer base).

Personally I'd keep schmum.

loyatemu · 20-05-2015 11:41am

The_Conductor wrote: »

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.

They don't have any direct influence over BOI but they do over AIB, PTSB and EBS - if they all reduce rates, BOI will be forced to follow suit.

3.85% is high for a 3 year rate IMO - UB are offering 3.65%, & there are lower variable rates available from PTSB and KBC.

johnp001 · 20-05-2015 1:53pm

Some interesting information on mortgage rates published today at http://economic-incentives.blogspot.ie/2015/05/interest-rates-on-pdh-mortgages.html

El_Dangeroso · 20-05-2015 3:33pm

loyatemu wrote: »

They don't have any direct influence over BOI but they do over AIB, PTSB and EBS - if they all reduce rates, BOI will be forced to follow suit.

3.85% is high for a 3 year rate IMO - UB are offering 3.65%, & there are lower variable rates available from PTSB and KBC.

Where is UB's rate 3.65% I can't see that on this page:
http://www.ulsterbank.ie/roi/personal/borrowing/mortgages/important-information/rates.ashx

sKeith · 20-05-2015 3:35pm

El_Dangeroso wrote: »

Where is UB's rate 3.65% I can't see that on this page:
http://www.ulsterbank.ie/roi/personal/borrowing/mortgages/important-information/rates.ashx

http://www.ulsterbank.ie/roi/personal/borrowing/mortgages/first-time-buyers/products/fixed-rate.ashx#tabbed-nav=tab2

El_Dangeroso · 20-05-2015 3:36pm

sKeith wrote: »

http://www.ulsterbank.ie/roi/personal/borrowing/mortgages/first-time-buyers/products/fixed-rate.ashx#tabbed-nav=tab2

That's for <60% LTV!

sKeith · 20-05-2015 3:39pm

The page you linked had <60 ltv @ 3.9. Just linking you up with the info loyatemu hinted at.

DulchieLaois · 20-05-2015 4:58pm

so i wonder, is it worth my while going fixed then for 2-3 years or not......decisions, decisions

jayjay2010 · 20-05-2015 8:17pm

The interest rate situation is a dilemma to me also.

Originally chose variable. Then 5 year fixed. Now I'm back onto variable (I'm new business, with another few weeks to go before cheque is drawndown).

I wanted 5 years for security. The rate was good also @ 3.80%. However, I get a discount on the variable rate as I'm new business so it's set at 4.00% but the SVR rate is also coming down slightly at the start of June so AFAIK I will qualify for the lower rate.

I get paid commission each month so I hope to overpay a lump sum of 200-400 extra per month. If rates start to go up, I will fix ASAP.

I'm nervous about my decision to go variable but I'm willing to take the gamble. My repayments will be low so I could afford a 2-3% rise if that did happen (god forbid)

All these rates are with EBS who I've chosen to go for.

Rowley Birkin QC · 20-05-2015 8:39pm

jayjay2010 wrote: »

The interest rate situation is a dilemma to me also.

Originally chose variable. Then 5 year fixed. Now I'm back onto variable (I'm new business, with another few weeks to go before cheque is drawndown).

I wanted 5 years for security. The rate was good also @ 3.80%. However, I get a discount on the variable rate as I'm new business so it's set at 4.00% but the SVR rate is also coming down slightly at the start of June so AFAIK I will qualify for the lower rate.

I get paid commission each month so I hope to overpay a lump sum of 200-400 extra per month. If rates start to go up, I will fix ASAP.

I'm nervous about my decision to go variable but I'm willing to take the gamble. My repayments will be low so I could afford a 2-3% rise if that did happen (god forbid)

All these rates are with EBS who I've chosen to go for.

I'm in exactly the same position. Have you looked into splitting the mortgage as a way to hedge your bets?

jayjay2010 · 20-05-2015 8:54pm

Rowley Birkin QC wrote: »

I'm in exactly the same position. Have you looked into splitting the mortgage as a way to hedge your bets?

I haven't really looked into it but I might seen I have a bit of time between now and cheque drawdown.

I have a friend who has quite a lot of property and he is confident that variable rates will come down further, or not change for the next 18-24 months. This could mean absolutely nothing of course, but I think the negative of fixing is that you can't make lump sum payments at all.

According to an interest calculator on some mortgage advise website, if I make increased payments every month of even just 100 euro, the interest rate on the overall loan drops quite significantly. Now I know that this is subject to the rate not changing, but the flexibility of over-paying every month appeals to me

L'prof · 20-05-2015 9:56pm

jayjay2010 wrote: »

I haven't really looked into it but I might seen I have a bit of time between now and cheque drawdown.

I have a friend who has quite a lot of property and he is confident that variable rates will come down further, or not change for the next 18-24 months. This could mean absolutely nothing of course, but I think the negative of fixing is that you can't make lump sum payments at all.

According to an interest calculator on some mortgage advise website, if I make increased payments every month of even just 100 euro, the interest rate on the overall loan drops quite significantly. Now I know that this is subject to the rate not changing, but the flexibility of over-paying every month appeals to me

That's all well and good, but will you really have much extra to throw on top of your mortgage in the first few years or so? Maybe you will, but it's worth sitting down and going over the numbers.

DulchieLaois · 21-05-2015 10:58am

I guess tis pot luck then....devil if u fix it and devil if u dont

bidiots · 21-05-2015 11:51am

DulchieLaois wrote: »

I guess tis pot luck then....devil if u fix it and devil if u dont

Nail.On.Head.

jester77 · 21-05-2015 3:06pm

jayjay2010 wrote: »

I haven't really looked into it but I might seen I have a bit of time between now and cheque drawdown.

I have a friend who has quite a lot of property and he is confident that variable rates will come down further, or not change for the next 18-24 months. This could mean absolutely nothing of course, but I think the negative of fixing is that you can't make lump sum payments at all.

According to an interest calculator on some mortgage advise website, if I make increased payments every month of even just 100 euro, the interest rate on the overall loan drops quite significantly. Now I know that this is subject to the rate not changing, but the flexibility of over-paying every month appeals to me

You just need to bargain with the bank. I have 20 year fixed here and can repay up to 10% once a year. My broker did a bit of handling with the bank to get the repayment part as the initial contract didn't have it.

MarkAnthony · 22-05-2015 8:53am

http://www.independent.ie/business/personal-finance/property-mortgages/exclusive-banks-to-slash-mortgage-rates-on-variableinterest-mortgages-31243358.html

From another thread, credit to the spotter.

0.25% reduction in July with another reduction in September. 100% variable for the rest of this year then maybe think about fixing it.

PRAF · 22-05-2015 12:39pm

MarkAnthony wrote: »

http://www.independent.ie/business/personal-finance/property-mortgages/exclusive-banks-to-slash-mortgage-rates-on-variableinterest-mortgages-31243358.html

From another thread, credit to the spotter.

0.25% reduction in July with another reduction in September. 100% variable for the rest of this year then maybe think about fixing it.

Why? Fixed rates are still between .7% and .45% lower than SVRs. Even assuming two .25% reductions in SVR rates between now and the end of the year, you'd still be better off with a 1 year fixed

Also, I wonder if the banks will also reduce their fixed rates in order to maintain that differential between their products and encourage people onto fixed rate products

MarkAnthony · 22-05-2015 2:21pm

PRAF wrote: »

Why? Fixed rates are still between .7% and .45% lower than SVRs. Even assuming two .25% reductions in SVR rates between now and the end of the year, you'd still be better off with a 1 year fixed

Also, I wonder if the banks will also reduce their fixed rates in order to maintain that differential between their products and encourage people onto fixed rate products

I've not seen fixed rates lower than SVR's for the same LTV - even if they are ther article suggests they'll be offering the option to switch to fixed rates after the reductions.

PRAF · 22-05-2015 2:33pm

MarkAnthony wrote: »

I've not seen fixed rates lower than SVR's for the same LTV - even if they are ther article suggests they'll be offering the option to switch to fixed rates after the reductions.

Practically all of the banks appear to have Fixed Rates priced lower than SVRs right now (although the differences are less the further out you fix).

http://compare.consumerhelp.ie/Mortgage

I think there is a concerted effort to get customers onto fixed rates where possible because it is easier to lock in the banks margin on those products.

MarkAnthony · 22-05-2015 2:35pm

Just checked mine - KBC - I'd have to be on <60% LTV and only get a one year fixed. Point taken it might be different with outher banks but I think I'm going to hedge and stay on the SVR until this has all calmed down then try and get a decent length fixed rate.

enfant terrible · 22-05-2015 3:48pm

MarkAnthony wrote: »

Just checked mine - KBC - I'd have to be on <60% LTV and only get a one year fixed. Point taken it might be different with outher banks but I think I'm going to hedge and stay on the SVR until this has all calmed down then try and get a decent length fixed rate.

If you fix for say one year, will they then put you on the current variable rate after the year or will it be a higher rate?

loyatemu · 22-05-2015 4:07pm

enfant terrible wrote: »

If you fix for say one year, will they then put you on the current variable rate after the year or will it be a higher rate?

It's impossible to say if everything is likely to change in July.

enfant terrible · 22-05-2015 4:15pm

loyatemu wrote: »

It's impossible to say if everything is likely to change in July.

No I'm just wondering after a 1 year fixed, do they then put you on the current variable rate or the what the current rate was when you fixed back a year ago?

loyatemu · 22-05-2015 4:32pm

enfant terrible wrote: »

No I'm just wondering after a 1 year fixed, do they then put you on the current variable rate or the what the current rate was when you fixed back a year ago?

it depends on the bank - some of them will put you on the Standard Variable Rate, some of them will allow you to take a lower LTV Variable rate - either way it'll be the current rate, not the one from a year ago. But the reports this morning suggest that the banks are going to introduce new fixed products in July, so really who knows.

Call me Al · 22-05-2015 4:36pm

They have always put us on the current variable rate when we've come off fixed, irrespective of how long the fixed was for.

I heard speculation on the radio today that the banks might initially try to only reduce the fixed rates in their attempt to satisfy the baying crowds, which is of zero use to those of us in negativity equity, and therefore stuck with our mortgage provider and the lousy SVR rate they offer us. We couldn't take a fixed rate right now even if we wanted to.

loyatemu · 22-05-2015 4:39pm

Call me Al wrote: »

They have always put us on the current variable rate when we've come off fixed, irrespective of how long the fixed was for.

I heard speculation on the radio today that the banks might initially try to only reduce the fixed rates in their attempt to satisfy the baying crowds, which is of zero use to those of us in negativity equity, and therefore stuck with our mortgage provider and the lousy SVR rate they offer us. We couldn't take a fixed rate right now even if we wanted to.

Negative equity customers will also be allowed to move from variable to fixed-rate or other products.