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Mortgage interest Fixed or variable...

  • 16-01-2010 9:30am
    #1
    Joey the lips
    Registered Users, Registered Users 2 Posts: 10,262 ✭✭✭✭


    Hi Folks

    Would really appreciate you unbiased knowledge on this. However if you dont know please dont guess as I would value your opinion.

    I am currently on a fixed rate mortage(4.75%) this is due to expire this month. I will then be changed over to the variable of 2.63% automatically. I had my last review 3 years ago thats why such a big difference.

    As you can see this is a massive difference. My question is. Should I stay on variable or consider the fixed which is usually around 1/4 to 1/2 % more.


Comments

  • #2
    Joey the lips
    Registered Users, Registered Users 2 Posts: 10,262 ✭✭✭✭Joey the lips


    Bump.... Nobody helping.


  • #3
    Toots
    Administrators, Business & Finance Moderators, Society & Culture Moderators Posts: 16,957 Admin ✭✭✭✭✭Toots


    TBH, without knowing more about your financial situation, it's impossible to tell you which you should do. With a variable rate, there's always the risk of your payments increasing, however, a lot of the fixed rates are a lot more expensive. My variable rate at the moment is 1.75%, but when I enquired about fixed rates for existing customers, the best one I could get was 3.2% (or thereabouts) fixed for 2 years.

    Fixed rates for new customers are much lower than fixed rates for existing customers. Ring your provider and find out what their rates are, then you'll have more info to decide what your options are.


  • #4
    Joey the lips
    Registered Users, Registered Users 2 Posts: 10,262 ✭✭✭✭Joey the lips


    Toots* wrote: »
    TBH, without knowing more about your financial situation, it's impossible to tell you which you should do. With a variable rate, there's always the risk of your payments increasing, however, a lot of the fixed rates are a lot more expensive. My variable rate at the moment is 1.75%, but when I enquired about fixed rates for existing customers, the best one I could get was 3.2% (or thereabouts) fixed for 2 years.

    Fixed rates for new customers are much lower than fixed rates for existing customers. Ring your provider and find out what their rates are, then you'll have more info to decide what your options are.

    Thanks. I have been talking to the bank this morning. The Var rate is 2.63 the fixed is 4.05. Now i am currently paying 4.75 so will see a reduction of 2% if i go with the variable and .75 if i go with the 3 year fixed.

    I am know better off than my current situation if i take the variable 5 year as this is 4.6%

    So i figure let it ride for a while and if the interest rate goes up then look at it.

    So my next question to the banks was whats the chances of an interest rate increase....


    They said that many things influence this including the payments of bad debts. I figure this might not be fair as my insurence already increased during the year to pay for bad debt...

    Any good input greatly appreciated...


  • #5
    Trampas
    Registered Users, Registered Users 2 Posts: 7,987 ✭✭✭Trampas


    Is it a tracker or standard variable that you will move to?

    Even though trackers are gone you might have it in your contract.

    interest rates from ECB are not expected to move up until at least mid year but for standard variable could move well before the ECB does.

    I would guess that fixing for 2 years at that rate wouldn't be a good idea since the extra you will be paying.

    I am on ECB +.75% and will find it hard to get me off that rate.


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