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Mortgages - Fixed Rate / APRC

  • 26-05-2019 4:59pm
    #1
    delta_bravo
    Registered Users, Registered Users 2 Posts: 4,567 ✭✭✭


    Hi,

    In the process of looking at mortgage products and I have noticed general advice to ignore advertised rates by banks and focus on the APRC. However what I dont understand is the disparity in the difference between some banks. For example some banks will perhaps have 0.2-0.4 between their give rate and the actual APRC however some products offered can have an APRC of over 1% higher than their advertised rate. Does anyone know why this is?


Comments

  • #2
    wench
    Registered Users, Registered Users 2 Posts: 1,649 ✭✭✭wench


    Usually it is because of the rate you default to after the fixed period.

    So you might get a fixed rate of 3% for 5 years, but then go to 4% for the next 30 years.
    The APR will be closer to 4% in that case.


  • #3
    delta_bravo
    Registered Users, Registered Users 2 Posts: 4,567 ✭✭✭delta_bravo


    wench wrote: »
    Usually it is because of the rate you default to after the fixed period.

    So you might get a fixed rate of 3% for 5 years, but then go to 4% for the next 30 years.
    The APR will be closer to 4% in that case.

    OK so if you are advertised a five year fixed of 2.5 with an aprc of 3.9 would you only pay 2.5 for the first five years?


  • #4
    wench
    Registered Users, Registered Users 2 Posts: 1,649 ✭✭✭wench


    Yes, that's correct.


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