3 or 5 Year Fixed

Trekky77

Myself and my partner are getting a mortage at the moment. We've been offered 2.5% 3 years and 2.55% 5 year fixed. Both have 2% cashback. They seem like great rates and the difference in monthly repayments is negligible.

My question is in the current climate would fixing for 5 years be the sensible play for additional security or would fixing for 3 years and availing of another cashback option after the fixed term ends be better?

I know it's a little playing nostradamus but my worry is that with banks pulling out the fixed rates will rise over the next few years and we would regret not spending the extra 2 years on the 2.55%.

Thanks.

Q&A

Things to consider:

5 retail banks will soon become 3 - this might impact future competition and rates. Might also impact cashback offers.

Future interest rates might also go up. Or they might not

Just because you lock in for 3/5 years doesn't mean you can't switch before the fix is up. Risk of a break fee but the potential is still there.

It doesn't have to be an either/or option you can split the mortgage between the 2 if you want.

It's all a roll of the dice but before taking that gamble first way up how sensitive your finances would be if you went for 3 years and rates moved unfavourably. The larger the mortgage to income the more I'd be inclined to lock in peace of mind.

Trekky77

Q&A wrote: »

Things to consider:

5 retail banks will soon become 3 - this might impact future competition and rates. Might also impact cashback offers.

Future interest rates might also go up. Or they might not

Just because you lock in for 3/5 years doesn't mean you can't switch before the fix is up. Risk of a break fee but the potential is still there.

It doesn't have to be an either/or option you can split the mortgage between the 2 if you want.

It's all a roll of the dice but before taking that gamble first way up how sensitive your finances would be if you went for 3 years and rates moved unfavourably. The larger the mortgage to income the more I'd be inclined to lock in peace of mind.

Thanks a million. Yeah it's quite a difficult thing to predict and I suppose everyone is in a different boat. Perhaps the 5 will be the way to go and if there is a significant drop then break out if possible.

Darc19

now you have a 20 year option and decent rates too. But they also allow you move the rate if you move house
https://www.financeireland.ie/products/residential-mortgages/mortgage-rates/