Mortgage Repayments

godtabh

So my 2 year fixed term mortgage runs out at the end of this month.

Having spoken to the lender I was told that I was currently on a 3 year fixed interest mortgage at 4.75% with repayments of approx €980 including mortgage interest relief. I questioned the 3 year term as I only bought the place in 2007 and they could tell me why it was set up but did say fixed interest rates don’t go on calendar years (mortgage drawn down in August 2007).

My options are

• Go on to a tracker variable rate at 2.15% reducing payments to approx €810 a month before take.
• Go on to a tracker variable rate at 2.15% keeping the same repayments and reducing the term by 8 years
• 2 year fixed at 4.2% costing €1100 pm
• 3 year fixed at 4.3% costing €1120 pm
• 5 year fixed at 4.95% costing €1200 pm

So I’m looking for opinions to see what the best step forward is. I plan to move in with my GF soon and rent out the apartment so will lose my mortgage interest relief. The rent won’t cover that mortgage but that’s cool. I will also contact my mortgage broker to see what else is out there.

The big question is how long is it gona be before that tracker rate gets to the stage that fixed rate would be good value.

The_Conductor

Personally I'd take the tracker variable rate and overpay the mortgage at the current level until such time as I was moving out- at which time I'd fix at the longest possible term I could find (keeping in mind that not only will you loose TRS on the mortgage- but mortgage interest relief as a deductable expense has already been lowered to 75% with the proposal to abolish it altogether within the next 2-3 years).

I'd seriously overpay at this early stage- if you can afford to- because it will become more expensive when its changed to an investment property (your interest margin will increase significantly too).

S.

godtabh

smccarrick wrote: »

Personally I'd take the tracker variable rate and overpay the mortgage at the current level until such time as I was moving out- at which time I'd fix at the longest possible term I could find (keeping in mind that not only will you loose TRS on the mortgage- but mortgage interest relief as a deductable expense has already been lowered to 75% with the proposal to abolish it altogether within the next 2-3 years).

I'd seriously overpay at this early stage- if you can afford to- because it will become more expensive when its changed to an investment property (your interest margin will increase significantly too).

S.

As the tax side is all new to me do you have any details of it ie when I rent it out?

Fancy That

Definitely go with the tracker rate! With regards to fixed and variable rates remember the banks are never going to loose and they pay people big bucks to work out their rates to ensure this!!

Going by your figures above if you can afford a 5 year fixed at 1200 a month why not pay this figure on a tracker mortgae thus reducing the term and the interest. If this is too much look at the 2 and 3 year figures on the fixed's.

I would take the tracker rate and over pay it by a comfortable figure thus leaving yourself room for any hikes that 'WILL' come in the not so distant future :eek:

Just out of curiosity what banks are offering trackers now?? thought that day was long gone......