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New Mortgage

  • 25-02-2010 1:30pm
    #1
    damof
    Registered Users, Registered Users 2 Posts: 1 ✭


    Hi all
    I have applied for and got a mortgage in principle with aib. I'm a first time buyer so I don't know much about them. What I'd like to know is about the interest rates. Should I fix it and for how long? They are offering 1 year at 2.4%, 3 years at 3.19%, 5 years at 3.86% and 10 years at 4.65%.

    My thinking is to go with the 10 year fixed as it seems to be a good rate but will the interest rates go up so much over that time to make it pay off?

    Also payment protection? Is it any use or just a way to get more money out of you?

    Any help with this would be great. Thanks


Comments

  • #2
    Speculator
    Registered Users, Registered Users 2 Posts: 300 ✭✭Speculator


    damof wrote: »
    Hi all
    I have applied for and got a mortgage in principle with aib. I'm a first time buyer so I don't know much about them. What I'd like to know is about the interest rates. Should I fix it and for how long? They are offering 1 year at 2.4%, 3 years at 3.19%, 5 years at 3.86% and 10 years at 4.65%.

    My thinking is to go with the 10 year fixed as it seems to be a good rate but will the interest rates go up so much over that time to make it pay off?

    Also payment protection? Is it any use or just a way to get more money out of you?

    Any help with this would be great. Thanks

    I would opt for the 10 year fixed rate. The banks will start increasing their variable rates in the 2nd quater of this year. Now that BOS is leaving the market, variable rates will shoot up as there is no more competition for the main Irish Banks.

    Payment protection is very valuable if you can afford it, as it protects against uncertainty. One piece of advice read the small print so you dont get any nasty surprises in the event you need to make a claim.


  • #3
    Atlantic Dawn
    Registered Users, Registered Users 2 Posts: 84,733 ✭✭✭✭Atlantic Dawn
    M


    I'd forget about payment protection, there's so much small print that it's hard to successfully claim and if you are successful the period you can claim for is quite small. You will have to get Mortgage Protection to cover the morgage in event of your death, this is a seperate product that the bank will offer you but you are free to get it from any source once it's assigned to the bank.


  • #4
    jackal
    Registered Users, Registered Users 2 Posts: 794 ✭✭✭jackal


    I successfully used payment protection on a personal loan. I was made redundant so it was pretty straightforward, just a bit of paperwork every week really. I used it for 9 months. I do believe however that they have doubled the cost of premiums in the past 12 months, so it may not be practical unless you are in a really dodgy job.


  • #5
    Dubh Geannain
    Registered Users, Registered Users 2 Posts: 3,553 ✭✭✭Dubh Geannain


    I'd be inclined to agree with Speculator.

    Banks are currently stress testing mortgages up to 6% at this stage as far as I know, a practice that should have been carried out more thoroughly in the last number of years.

    Interest rates can only realistically go one way in the coming couple of years.


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