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Mortgage Fixed Rate Term

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  • 25-09-2018 9:28am
    #1
    spicymchaggis
    Registered Users Posts: 2,873 ✭✭✭


    This is probably asked frequently not something that can be easily answered I'm guessing as the future is unpredictable but with my mortgage application I'm about to submit my last document for full letter of approval and looking at the best rate option to go for.

    I have the option of fixed for 5 years at 3% or 10 years at 3.3%.
    Any feedback would be appreciated.


Comments

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    #2
    Wheety
    Registered Users Posts: 5,510 ✭✭✭Wheety


    It's a personal decision but if they were my only 2 options, I would go for 5 years.

    Who's this with?


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    #3
    spicymchaggis
    Registered Users Posts: 2,873 ✭✭✭spicymchaggis


    Any particular reasoning behind this?


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    #4
    Wheety
    Registered Users Posts: 5,510 ✭✭✭Wheety


    spicymchaggis wrote: »
    Any particular reasoning behind this?

    I just think it's a nice time to fix for. I think 10 is too much. But each to their own. If you think knowing what you're paying for 10 years is important then go for it.

    I fixed for 5 last year and I'm now looking to break so I can switch to a lower rate. I'll be fixing again for 5 years. It gives me the option of switching again at that stage.

    Can you overpay on your fixed rate?


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    #5
    JoeyJJ
    Registered Users Posts: 3,663 ✭✭✭JoeyJJ


    Recently fixed for 5 coming off another fixed. Happy enough doing it however back of mind looking at possibilities of a bit of competition in the market however being BOI customer no way I am sitting on variable to wait and see.


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    #6
    JoeyJJ
    Registered Users Posts: 3,663 ✭✭✭JoeyJJ


    If rates go down, breaking to lock in lower rates, the penalties will most likely remove incentive to do so.


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    #7
    PhoenixParker
    Registered Users Posts: 2,677 ✭✭✭PhoenixParker


    Penalties for breaking a fixed rate mortgage are much lower then they used to be. I'll be honest, im hazy on the details, but there's a fairly recent court ruling/EU directive that massively limits what they can penalise you.

    https://www.independent.ie/business/personal-finance/property-mortgages/mortgage-holders-locked-into-fixed-rates-now-able-to-switch-without-penalty-36396261.html

    Basically a ten year fix isn't the potential noose it used to be.


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    #8
    Hitman3000
    Closed Accounts Posts: 5,596 ✭✭✭Hitman3000


    My partner and I are selling our home and buying another. The bank has offered us 7 years fixed at 2.89 . It's a 16 year mortgage I'll be getting. For peace of mind I'm taking the offer.


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    #9
    iluvfatfrogs
    Registered Users Posts: 616 ✭✭✭iluvfatfrogs


    Hitman3000 wrote: »
    My partner and I are selling our home and buying another. The bank has offered us 7 years fixed at 2.89 . It's a 16 year mortgage I'll be getting. For peace of mind I'm taking the offer.

    Thats a very decent deal imo.
    I'm just in the middle of switching to BOI for 5 years @2.8%


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    #10
    Hitman3000
    Closed Accounts Posts: 5,596 ✭✭✭Hitman3000


    iluvfatfrogs wrote:
    Thats a very decent deal imo. I'm just in the middle of switching to BOI for 5 years @2.8%


    LTV and loyalty discount. I could be wrong but I only see the rates going one way and the 7 years fixed gives me some comfort but i know I'm paying for the privilege.


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    #11
    Wheety
    Registered Users Posts: 5,510 ✭✭✭Wheety


    JoeyJJ wrote: »
    If rates go down, breaking to lock in lower rates, the penalties will most likely remove incentive to do so.

    Only if 'wholesale' rates have changed. I'm breaking out of a 3.05% and it's costing me nothing and I'll be fixing at 2.65%. Possibly 2.6% if value has increased.

    Valuation is €130 but I'll be saving almost €50 a month.


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