Interest Rates: Would you fix or not?

Roger Hassenforder

Reviewing my interest rate options, and thinking of the next few years.
Currently with KBC, and I'm on variable 3.05%. they're reportedly* bringing out new interest rates in September.

(*I believe) My options are:
Fix for 1 years at 2.5%
Fix for 2 years at 2.5
Fix for 3 years at 2.55
Fix for 5 years at 2.6
Fix for 10 years at 3.05


what would people suggest?
& why...

Cheers

pjmn

Have you considered the following...

20% of your mortgage on variable rate (this will give you some flexibility if you ever want to make a lump sum reduction without incurring a penalty)

40% on the 2 year fixed rate and

40% on the 4 year fixed rate

by my calculations this will leave you with a blended rate of c. 2.65% and you'll have protected 80% of your mortgage against any potential interest rate rise for a period of time...

I'm not saying this will definitely save you money against other options, as none of us can be sure if/when interest rates will rise, but it buys you certainty. Above is just a suggested mix, there are endless other variations...

Roger Hassenforder

never even heard of a blended rate until now!
must look into that more.

Wheety

I'd fix for 5 years at 2.6%. You can still over pay in the fixed rate up to a maximum of 10% of the value at the time of fixing. This can be regular overpayment or lumpsum.

draiochtanois

This post has been deleted.

Roger Hassenforder

draiochtanois wrote: »

Depends on your circumstances.

Do you plan to move house in the next 10 years?
Do you have to pay a penalty to move from these fixed rates?
To you have the financial wherewithal to pay your mortgage if interest rates go up?
Are you borrowing a small or large amount - More or less than 500k?

I intend to be carried out in a box in about 30 years all going well!

Way less than 500k.
LTV currentky about 65%.

Shaunoc

Roger Hassenforder wrote: »

Currently with KBC, and I'm on variable 3.05%. they're reportedly* bringing out new interest rates in September.

Sept 3rd i hear

Roger Hassenforder

Wheety wrote: »

I'd fix for 5 years at 2.6%. You can still over pay in the fixed rate up to a maximum of 10% of the value at the time of fixing. This can be regular overpayment or lumpsum.

Think I might go with this all right

GhostyMcGhost

Shaunoc wrote: »

Sept 3rd i hear

Yup

Btw add .2% to that discount if you’ve a kbc current account

That’s 2.4% fixed over 5 years. That’s a good rate!

https://www.kbc.ie/news-and-press/latest-news-and-press-releases/kbc-bank-lowers-mortgage-rates

Purple Sheep

GhostyMcGhost wrote: »

Yup

Btw add .2% to that discount if you’ve a kbc current account

That’s 2.4% fixed over 5 years. That’s a good rate!

https://www.kbc.ie/news-and-press/latest-news-and-press-releases/kbc-bank-lowers-mortgage-rates

No, the rates already include the discount, see the bottom of the page under the table.

TheShow

5 Yr fixed is a very good option, 10 yr is good too, but for me 10 yr is too long to be locked into something.

Roger Hassenforder

TheShow wrote: »

5 Yr fixed is a very good option, 10 yr is good too, but for me 10 yr is too long to be locked into something.

That's my thought.

mugsymugsy

We went for 10years fixed earlier in the year @2.99% with KBC. In our circumstances it suits us. As you say do what suits you having considered all.

One thing I would encourage is the amount you will save per month to overpay it or at least save it! Don't just fritter this extra money away!

Wheety

mugsymugsy wrote: »

We went for 10years fixed earlier in the year @2.99% with KBC. In our circumstances it suits us. As you say do what suits you having considered all.

One thing I would encourage is the amount you will save per month to overpay it or at least save it! Don't just fritter this extra money away!

Is your rate due to be reduced again in September?

draiochtanois

This post has been deleted.

mugsymugsy

Wheety wrote: »

Is your rate due to be reduced again in September?

No it's not. With a fixed rate that's it you are locked in unless you pay to break it which I did on an old rate. The break fee was zero but that was due to internet bank rates at the time.

Roger Hassenforder

It's pure guesswork all right!

Wheety

mugsymugsy wrote: »

No it's not. With a fixed rate that's it you are locked in unless you pay to break it which I did on an old rate. The break fee was zero but that was due to internet bank rates at the time.

I was in a fixed since last year but am going to break and fix again at the new lower rates in September. €0 break fee too.

I know not all rates are being reduced and I don't think the 10 year is.

I fixed with BOI recently, I went 5 years but with an agreed overpayment of about 66%/month.

I'm not conceptually sold on fixed rates, so fixing for 10 years wasn't at all appealing as the 5 year rate was of course lower. The BOI variable rate being ludicrously high sort of forced my hand to fix or change mortgage provider.... I took the easier option.

draiochtanois

This post has been deleted.

No, unfortunately I just got the 3% headline rate off them. I was happy with the agreed overpayment thing so that sweetened the deal somewhat.
I did expect to get less than the 3% though admittedly.

cookie1977

I was offered 2.85% for 5 years with BOI and I know someone who got 2.8% for 5 years with BOI both at LTV >60<80. I went with 10 years at 3.2%. I haggled and got down from 3.5-3.2 but they wouldn't budge any further.

I'd have been borderline 80% LTV at the time