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Going to Fixed but may sell in future....need advice

  • 22-07-2010 12:12pm
    #1
    bigdawg
    Registered Users, Registered Users 2 Posts: 50 ✭✭


    I would like to get your opinions on this....

    I am on a variable mortgage. Its not that big, 160k (140 owing) and the repayment is handy enough. I was going to fix for 3 years as i can see a good few rate rises ahead between the banks themselves and the ECB.

    However, there is a strong chance that I could be selling in the 3 year time frame which would incur a penalty under the fixed mortgage arrangement if I look for additional money. The Lender tells me that they have gotten around this in the past by clearing the old mortgage, and setting the same portion as fixed in the new mortgage and tacking on the extra money at a variable rate. No penalties charged as they will be waived because Im continuing with the same institution.

    That all sounds fine but the lender says that the Financial Regulator is looking at everything at the moment and may not allow this situation to pertain in the future. He has nothing to base this on but he is just covering himself. So do I stay variable and take whatever increases come? Or go fixed, as I want to do, and take my chances that that arrangement will be untouched by the regulator into the future?

    Opinions please.


Comments

  • #2
    Blackjack
    Registered Users, Registered Users 2 Posts: 3,628 ✭✭✭Blackjack


    bigdawg wrote: »
    I would like to get your opinions on this....

    I am on a variable mortgage. Its not that big, 160k (140 owing) and the repayment is handy enough. I was going to fix for 3 years as i can see a good few rate rises ahead between the banks themselves and the ECB.

    However, there is a strong chance that I could be selling in the 3 year time frame which would incur a penalty under the fixed mortgage arrangement if I look for additional money. The Lender tells me that they have gotten around this in the past by clearing the old mortgage, and setting the same portion as fixed in the new mortgage and tacking on the extra money at a variable rate. No penalties charged as they will be waived because Im continuing with the same institution.

    That all sounds fine but the lender says that the Financial Regulator is looking at everything at the moment and may not allow this situation to pertain in the future. He has nothing to base this on but he is just covering himself. So do I stay variable and take whatever increases come? Or go fixed, as I want to do, and take my chances that that arrangement will be untouched by the regulator into the future?

    Opinions please.

    Split the Mortgage into Part fixed part Variable. Most lenders will offer this, and I can't see the regulator preventing these arrangements.


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