Is fixing a mortgage for 10 years too long?

robocode

We are only one year into our mortgage (just under 90% LTV) and for our first year fixed at 3.55% with BOI. That term is about to end and we are having a hard time deciding what to do next. We definitely want to fix but can't decide between

1. fix for 5 years at 3%
2. fix for 10 years at 3.5%

The 3% seems very good, but to fix at ten knowing our repayments stay pretty much identical to what they are now is also appealing. You would imagine ECB rates will start to claim this year or next, but by how much and if Irish banks will follow proportionately is obviously another matter (let alone any potential effects of Brexit or the likes of Italy's fragile system on the EU).

How are other people approaching this decision?

iluvfatfrogs

robocode wrote: »

We are only one year into our mortgage (just under 90% LTV) and for our first year fixed at 3.55% with BOI. That term is about to end and we are having a hard time deciding what to do next. We definitely want to fix but can't decide between

1. fix for 5 years at 3%
2. fix for 10 years at 3.5%

The 3% seems very good, but to fix at ten knowing our repayments stay pretty much identical to what they are now is also appealing. You would imagine ECB rates will start to claim this year or next, but by how much and if Irish banks will follow proportionately is obviously another matter (let alone any potential effects of Brexit or the likes of Italy's fragile system on the EU).

How are other people approaching this decision?

Personally, if you no real interest in overpaying your mortgage int he short term, I don't think ten years is too long, especially as you have pointed out stability is important.

However, if you are going to fix for ten years, you should definitely look outside of BOI as there are better rates available than 3.5%.

izzyflusky

I have been given the same rate by KBC, and would be able to overpay 10% of the mortgage within that time with no penalties.
Their current variable rate seems to be the same, so unless I taking a 1 year fixed at 2.9% and then facing next year's increase, it made sense to go for the 10year fixed rate now.

Edit. My current rent is based on a PTSB mortgage and it has started to increase already.

Henry Ford III

How likely are you to move house in the next 10 years? Consider breakage costs.

robocode

That's a big factor for us, we consider it our forever home with no plans of moving.

Henry Ford III

robocode wrote: »

That's a big factor for us, we consider it our forever home with no plans of moving.

Everyone does that. Circumstances change however.

robocode

Henry Ford III wrote: »

Everyone does that. Circumstances change however.

True, but we're both in permanent jobs in the area, with family around us, and the house is big enough for any more children that may come along.

km79

robocode wrote: »

That's a big factor for us, we consider it our forever home with no plans of moving.

5 year rate is good take that imo
10 years is a long long time
Many things can change ......