Mortgage fixed rate expiring... ltv, fixed rate options, term options

s7ryf3925pivug

My fixed rate period is expiring.

Questions:
1. The options the bank have provided are for 80% ltv. At this point the balance on my mortgage is less than 60% of the property’s value. Can I not avail of this category of rates now?
2. What is the consensus about fixed term periods? I’m between the 2 year and 5 year fixed rates, which have.3% difference in interest.
3. Any issues with extending term apart from the obvious? Would still be paid off a decade before retirement so I can’t see any reasonable objections.
4. Some options have different aprc rates but the same interest rates. Am I right in thinking the actual cost is greater with a higher aprc and same interest rate?

s7ryf3925pivug

so it looks like interest rates are staying unchanged until around this time next year at least. Could take the one year fixed with the idea that the options will be similar in a year..?

Q&A

1. Your bank may require a new valuation for you to switch to a new LTV. This will likely cost about €120-150.

2. Consensus is a difficult thing. More relevant is if you think 0.3% is a small enough premium to pay in order to insulate yourself against rate increases for an additional 3 years. Given you want to extend your mortgage I am guessing you won't be aggressively paying off the mortgage in the short-to-medium term. This might favour the longer fix.

3. No harm asking the bank. Worst they say is no. A term extension will likely mean you'll need new mortgage protection as your current one is based on your current term.

4. Aprc includes other charges not just the interest. I could be wrong but the difference between the APRC could reflect the remaining term, assumed to be variable. A 30 year mortgage fixed for 2 years or fixed for 5 years would reflect the fact that one will become variable for 28 years and one will be variable for 25 years.

5. ECB rates are not expected to increase until next year but banks are free to adjust their rates regardless. Also the ECB rate is a short term rate. Fixed rates will reflect expectations of future rates not the current ECB rate, they will likely rise before the ECB rate does. There are good deals on fixed rates now that might not last. It's not what will the ECB rate be in 12 months that matters for next years fixed rates rather what will the expectation be in 2020 for rates in 2022 (2 year) or 2025 (5 year) that will determine fixed rates.

s7ryf3925pivug

Might pay a lump sum in about three years or maybe later, maybe all of it. In the meantime it's cheap credit for building an extension.

Trish56

The reason APR differs between lenders is due to the fact that they all have different standard variable rates for example BOI standard variable rate is 4.50% and AIB is 3.15% for 90% loan to value.

Q&A

Juliana Loose Homemaker wrote: »

Might pay a lump sum in about three years or maybe later, maybe all of it. In the meantime it's cheap credit for building an extension.

You could fix for 5 and then just pay the break fee if and when you overpay. It is very possible that the break fee might be zero if rates have increased by then.

s7ryf3925pivug

Was slow to return form so rang them yesterday. They moved me to the best ltv rates without being asked and mentioned they had lowered their longer term fixed rates. They issued a new form offering the better options. I didn't look to extend the term, but cancelled overpayments I had set up. Fixed for 10 years at 3.3%. The repayments are low and at the end of that period the outstanding balance will be four digits. So basically I don't need to worry about my mortgage now, which is nice.