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interest rate query

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  • 22-06-2015 11:35am
    #1
    peadar76
    Registered Users Posts: 246 ✭✭


    I recently got a letter from Haven to tell me that my interest rate had been cut from 4.35% to 3.97%.
    Great to see in going in the right direction.
    However, there was a leaflet included with the letter advertising their new fixed rates.
    1 year fixed - 3.5%
    2 year fixed - 3.6%
    3 year fixed - 3.65%
    4 year fixed - 3.75%
    5 year fixed - 3.8%

    All the fixed rates are lower than my variable rate. Is this unusual?


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    #2
    restive
    Banned (with Prison Access) Posts: 1,066 ✭✭✭restive


    Which bank are you with? I got a letter today from BOI offering 3.6% fixed interest rate for 1 year or more.


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    #3
    qb123
    Registered Users Posts: 210 ✭✭qb123


    Yes, it isn't normal for fixed rates to be lower than variable. However, the situation here is a consequence of the dysfunctional mortgage market we have in this country. While you're being screwed on the variable rate, the bank does have to face the probability that you could possibly move to a competing bank offering a slightly lower rate. Or some proper competition might break out at some stage. Thus the banks are offering lower fixed rates so that they can screw you a little less hard for a guaranteed longer period.

    Forgive the language, but when describing the banks' behaviour it's sometimes necessary.


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    #4
    restive
    Banned (with Prison Access) Posts: 1,066 ✭✭✭restive


    Does anyone know who is offering the best fixed rate right now? I have been thinking about switching.


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    #5
    peadar76
    Registered Users Posts: 246 ✭✭peadar76


    I'm with Haven Mortgages.

    So if I change from the variable rate of 3.97, to say, a 2 year fixed of 3.6%, that's a decent reduction.

    Or are the variable rates likely to reduce further?


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    #6
    restive
    Banned (with Prison Access) Posts: 1,066 ✭✭✭restive


    That's what everyone is wondering!!


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    #7
    PaulM1977
    Banned (with Prison Access) Posts: 210 ✭✭PaulM1977


    Based on what fixed term, i.e. 1 year, 2 year, 3 year, 5 year or longer?
    restive wrote: »
    Does anyone know who is offering the best fixed rate right now? I have been thinking about switching.


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    #8
    restive
    Banned (with Prison Access) Posts: 1,066 ✭✭✭restive


    Two year fixed.


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    #9
    Trish56
    Registered Users Posts: 1,256 ✭✭✭Trish56


    restive wrote: »
    Does anyone know who is offering the best fixed rate right now? I have been thinking about switching.

    I would make no decision on fixing or switching until next Wednesday when Ulster Bank, permanent tsb and KBC will make announcements in either reducing their variable rates to existing customers or offering them the same fixed rates they offer to new customers. Minister of Finance gave them until 1st July to reduce rates.


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    #10
    PaulM1977
    Banned (with Prison Access) Posts: 210 ✭✭PaulM1977


    AIB/Bank of Ireland/EBS @ 3.60%. Take into account the legal costs in switching along with getting a valuation on your property and how much of a difference the rate change will benefit you after the additional costs are allowed for.


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    #11
    enfant terrible
    Registered Users Posts: 4,586 ✭✭✭enfant terrible


    For me a 1 year fixed with AIB is 3.5% followed on by 3.97%

    If rates drop by say 0.5% over the year will the follow on rate then become 3.47%

    The girl at AIB said yes, should I make sure this is stated in the mortgage contract or am i over worrying?


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    #12
    Trish56
    Registered Users Posts: 1,256 ✭✭✭Trish56


    enfant terrible wrote: »
    For me a 1 year fixed with AIB is 3.5% followed on by 3.97%

    If rates drop by say 0.5% over the year will the follow on rate then become 3.47%

    The girl at AIB said yes, should I make sure this is stated in the mortgage contract or am i over worrying?

    You should be looking for the rate to revert to loan to value variable rate rather than the standard variable rate...... all fixed rates do at present except 1 year fixed.


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