Switching variable to fixed and back to variable

ixoy

Currently with a fairly weak 3.4% SVR based on <80% LVR. Now to save money I should, at the least, switch to AIB at 2.95% (25 years left on the mortgage).

However, there's the obvious push on fixed rates at the moment. Of course when you exit these you go at the highest standard variable rate, regardless of your loan-to-value so upon exiting it's a worse rate (than now).
What's to stop you though then switching banks and getting their product for a <80% rate? Other than obviously switching fees, would this not give you the best of both worlds: take your fixed rate bargain now and, when they try and get you at the end of the loan, jump to a new bank and get their best price variable rate based on a better loan-to-value? Obviously, there's an inbuilt assumption there's no property crash there.

Mike3549

Switching legal costs is whats stopping you. Some banks offer 2k towards the costs when you switch, but that wont last

ixoy

Legal costs seem to be in the region though of 2k. I would imagine there's a lot more to be saved in what could be a 1% interest rate difference though over that? I know it depends on the loan but for a Dublin home.

hanaimai

This is exactly what you should do, nothing stopping you (other than the aforementioned costs which are likely covered by the lender or at the very least outweighed by the potential future savings). The more people who switch the better - it'll force the banks to compete harder to keep/attract business too.