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Fixed or Variable

  • 31-03-2016 11:42am
    #1
    maverick_21
    Registered Users Posts: 198 ✭✭


    We are currently finalising a house purchase and are getting quoted the below rates from AIB:

    Variable Rate - LTV>80% - 3.75%
    Fixed rate for 1 year @ 3.50%
    Fixed rate for 2 years @ 3.60%
    Fixed rate for 3 years @ 3.65%

    What are peoples opinions on the best option?


Comments

  • #2
    Trish56
    Registered Users, Registered Users 2 Posts: 1,256 ✭✭✭Trish56


    I would be inclined to stick with variable as rates may reduce again and are not expected to rise for a few years. If you prefer fixed I would opt for 2 year fixed as rates should not increase in this period and when that expires choose a 5 years fixed if available.
    maverick_21 wrote: »
    We are currently finalising a house purchase and are getting quoted the below rates from AIB:

    Variable Rate - LTV>80% - 3.75%
    Fixed rate for 1 year @ 3.50%
    Fixed rate for 2 years @ 3.60%
    Fixed rate for 3 years @ 3.65%

    What are peoples opinions on the best option?


  • #3
    Boardnashea
    Registered Users, Registered Users 2 Posts: 860 ✭✭✭Boardnashea


    We fixed half of the original amount for 12 months and left the other half on variable. It made very little difference looking back.


  • #4
    newacc2015
    Closed Accounts Posts: 2,379 ✭✭✭newacc2015


    There is no reason for variable to go up in the few years. The ECB just cut rates,as they know the eurozone economy is seriously fragile. The US FED knew they needed to increase rates and waited about 18 months to hike their rates. I would sit on variable for at least 18/24 months and then consider a long term fix


  • #5
    maverick_21
    Registered Users Posts: 198 ✭✭maverick_21


    Thanks all. I've heard fixed rate mortgages are front loaded with Interest. Is that true?
    If we go with variable and decide to pay extra each month does this reduce the monthly payment amount or the sum of the mortgage?


  • #6
    Trish56
    Registered Users, Registered Users 2 Posts: 1,256 ✭✭✭Trish56


    The big advantage on choosing variable is that you can make lump sum payments and if you do you can choose to reduce your term or your monthly repayment thereby reducing the interest you pay.

    You can also opt for a split package, say 100k variable and 100k fixed for2,3,4,or 5 years. I think we are in for a low interest period for the next 2 years so I think either variable or 2 year fixed with the option of either continuing variable or choosing the longest fixed rate in two years time. Just really depends on the economy and it's not good news at the moment.


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