Mortgage Rates - which one to go with?

abnormalnorman · 09-01-2023 2:07pm #1

Hi,

Time to renew my Mortgage repayment rate (current rate expires end of Feb), and offered the following:

VARIABLE LTV <=60% RATE of 3.9%

3 Year Fixed LTV <=60% RATE of 3.0%

1 Year Fixed LTV <=60% RATE of 2.9%

2 Year Fixed LTV <=60% RATE of 2.9%

5 Year Fixed LTV <=60% RATE of 3.0%

10 Year Fixed LTV <=60% RATE of 3.3%

Iv about €90k left to pay in it. 10 Years.

Any advice on which rate to go with?

Q&A · 09-01-2023 3:37pm

Unlikely to be a lot of value in those short rates. The cost of borrowing is (slowly) rising from record lows. So fixing for 1 year would probably mean you'd be faced with a set of higher rates in a years time. Across longer time horizons it's Crystal ball stuff but even the ECB have acknowledged policy rates are likely to stabilise at a rate higher than what we've seen over last decade. So what's on offer now is likely to look good compared to what might be around in years to come

0.1% premium to lock in for 5 years isn't bad. Nor is the 10 year option. I'd favour one of those. Which one depends on your own risk preference and what you can afford. The bigger the chunk of your current income going on the mortgage the more I'd suggest locking in for the full term.

Personally I'd be asking the question is there any good reason to not take the 10 year option. Fix and forget.

walterking · 09-01-2023 11:34pm

3% @ 5 years is very good. You'll have a balance of €48,000 at that stage and a small change in interest rates won't make a huge difference on that balance. Your mortgage payment would be 870/month

You could go 10 year and the monthly payment would be 881 and never be concerned how rates go.

I'd probably go with the 5 year rate.

Ginger83 · 09-01-2023 11:41pm

If you have 10 years left I'd go with the 10 years fixed so you'll know where you stand until the end.

abnormalnorman · 10-01-2023 5:11pm

https://www.boards.ie/discussion/comment/120088057#Comment_120088057

would I get better rates by switching mortgage?. would it be worth it?

Ginger83 · 10-01-2023 6:08pm

https://www.boards.ie/discussion/comment/120090691#Comment_120090691

Possibly but it might not be huge. I locked in a few months ago for 7 years @ 3%

smokie72 · 10-01-2023 6:11pm

https://www.boards.ie/discussion/comment/120090691#Comment_120090691

you are in a great position. fix it. switching isn't worth the hassle. It can take several months to do the process and you might end up with a higher fixed rate.

com1 · 10-01-2023 6:19pm

https://www.boards.ie/discussion/comment/120090691#Comment_120090691

Switching mortgages can be a serious pain in the behind. You are essentially starting again from scratch, so unless the rates are substantially different I would not recommend it. I did it last year - 5.5 months of back and forth gathering documentation only to have the lender delay so much that we had to refresh everything. On top of that we needed to get a new valuation done for the house and there were solicitors fees involved

Q&A · 10-01-2023 8:21pm

https://www.boards.ie/discussion/comment/120090691#Comment_120090691

You might get a better rate but you have to factor in the cost of switching both in terms of euros and time.

Switching will take time and there is no guarantee that rates won't move in the time it takes you to switch.

On top of that it'll cost you in legal fees. The fact you have a small/short mortgage means switching costs will probably outweigh the lower rates.

For example, you could fix for 10 years with your current provider at 3.3%. To make it worth your while switching, and assuming legal fees of at least €1,500, you'd need to find a 10 year rate below 3%. That's not taking into account other costs such as valuations or that legal fees might be more.

abnormalnorman · 11-01-2023 1:42pm

okay . ill definitely look into fixing it for long term so.

only issue with that would be I would not be able to throw a lump-sum into it , should I come across a few pound in the meantime??

Q&A · 11-01-2023 3:28pm

https://www.boards.ie/discussion/comment/120093949#Comment_120093949

Nothing to stop you overpaying at a future point.

There may be a break fee but that depends on how market rates move between the day you refix and the day you want to overpay.

Some lenders allow an element of overpayment regardless.

smokie72 · 11-01-2023 3:45pm

Also you might want to do house renovations in a few years. You could ask for a top up when your mortgage is nearly paid off. Cheapest rate you could get.

walterking · 12-01-2023 9:18pm

https://www.boards.ie/discussion/comment/120090691#Comment_120090691

Unlikely as I hear banks are planning a revision of rates after the next ECB meeting and some fixed rates may change before that. Paperwork can take 6+ week, its costly and also your balance is below the minimum most bans will accept (€100k)

So you would likely only get offer of a higher rate, pay €2k fees, an awful lot of headaches and no saving whatsoever. I'd be locking in fairly quickly at the 3%

abnormalnorman · 13-01-2023 4:30pm

https://www.boards.ie/discussion/comment/120100327#Comment_120100327

Thanks, how many years would you go for?

walterking · 13-01-2023 10:04pm

https://www.boards.ie/discussion/comment/120103746#Comment_120103746

5 as your balance will be under 50k then and ECB should have eased back by then.

I'd act asap - ptsb moved rates today, the rest will start soon

skinny90 · 16-01-2023 4:22pm

PTSB rates have kicked in Today, we applied for a mortgage with a 3 year fixed rate of 2.85% in December, AIP took longer than expected but we received it today with the old rate

Mortgage advisor stated as of day its 3.65%

Started BOI application now....

Mortgage Rates - which one to go with?

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