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fixed rate for 10 yrs at 5.15% vs fixed for 2 yrs at 4.8%

  • 22-04-2008 11:05am
    #1
    -unlaoised-
    Closed Accounts Posts: 26 ✭


    Hi I have the above options for my mortgage.
    am i mad to be considering fixing for 10 year at 5.15%

    I don't know what to do!

    comments suggestions appreciated


Comments

  • #2
    Eazy Mortgages
    Closed Accounts Posts: 8 ✭Eazy Mortgages


    10 years is a long time. Its not a bad rate. Its very hard to tell whats going to happen. In the short term the ECB seem to keeping the lending rate the same however bank lending rates are going up. The way i would look at is, if you are really worried about it and want to keep your repayment the same for the next 10 years then go for it. I think its really down to you and how you feel about your monthly outgoings. Rememeber though that if you fix for 10 years and try to move your mortgage they will charge you a redemption fee to break out of it.


  • #3
    kaiser sauze
    Registered Users, Registered Users 2 Posts: 1,558 ✭✭✭kaiser sauze


    Ask the lender for a scale of charges for switching mortgages/paying off early or if paying off lump sums is allowed.

    The charges for leaving the fixed rate early usually slide downwards over time, i.e. it will be less costly to leave at the 8 year mark than after two. Probably significantly so.

    It is a long commitment and should be deliberated on carefully.


  • #4
    Ogham
    Registered Users, Registered Users 2 Posts: 1,844 ✭✭✭Ogham


    Are these the ONLY options you have? What about a normal tracker mortgage?
    Fixing for 10 years is a bit of a gamble - but gives you fixed outgoings for 10 years which could be a good thing.


  • #5
    Eazy Mortgages
    Closed Accounts Posts: 8 ✭Eazy Mortgages


    Most banks are trying to get away from tracker mortgages. If they do, do them they are not on the same term & cons as before because of the credit crunch etc etc. Cheapest option at the min is fixed.


  • #6
    The Rooster
    Registered Users, Registered Users 2 Posts: 4,760 ✭✭✭The Rooster


    kaiser sauze wrote: »
    Ask the lender for a scale of charges for switching mortgages/paying off early or if paying off lump sums is allowed.

    It is a long commitment and should be deliberated on carefully.

    x2

    If you decide to up or down scale after 3 years, you could have a massive penalty.


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  • #7
    Lizzykins
    Closed Accounts Posts: 637 ✭✭✭Lizzykins


    Ten years is too long. We got a 10% fixed rate in 1993 and got out of it in 2003 after the 10 years was up. The BoI wanted EVERY penny of the interest we would have paid for the ten years as a penalty. No way would I have gone for that so at the end of the term I just switched lenders.


  • #8
    rebellad
    Registered Users, Registered Users 2 Posts: 227 ✭✭rebellad


    AM in a similar enough postion myself. Had a loan offer for a self build of 4.7% 1 year fixed with ICS. Mortgage 300k, LTV < 80%. Got a letter from ICS today saying that that was no longer valid and that it was now 5.25%. I got onto the broker straight away and he was saying that all banks are reviewing their 1 year fixed mortgages and the best rate at the moment for self build now is 4.99% 2 year fixed with ICS. Would I be foolish to accept this or should I start shopping around again??


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