Mortgage rates

Inspector Coptoor

Had my first mortgage enquiry with BOI today.
€380k approved in principle based on €326k mortgage & €54k deposit.

APR quoted was 4.5% and would mean a €1846 repayment per month for 25 years.

We're gonna look in a few other places, appointment booked for KBC next week & a few others too.

Our target market is south Dublin, the closer to donnybrook/Stillorgan, the better,

Thoughts on this offer?

ted1

Inspector Coptoor wrote: »

Had my first mortgage enquiry with BOI today.
€380k approved in principle based on €326k mortgage & €54k deposit.

APR quoted was 4.5% and would mean a €1846 repayment per month for 25 years.

We're gonna look in a few other places, appointment booked for KBC next week & a few others too.

Our target market is south Dublin, the closer to donnybrook/Stillorgan, the better,

Thoughts on this offer?

Too much AIB offer 3.8% The location is irrelevant.

cooperguy

In my experience BOI is one of the most expensive providers. AIB will give you a variable rate of 4.2% and a fixed of 3.5%, KBC will do something similar. Dont be taken in by their offer of paying the stamp duty, their higher interest rates more than make up for it!

DulchieLaois

I have taken on the house with my wife from my brother recently and are currently on 4.35% interest rate.

The house is now <75% LTV and we can now changed to 3.8% Fixed for 2 years.

I am wondering if this would make sense as there is talk of rates coming down soon either way ?

or is it too soon after taking on the mortgage to look into changing to other banks at lower interest rates ?

Mellowbird

Based of your mortgage figures on the consumer help website, the most expensive variable rate is what you have, 4.5% with BOI. The cheapest variable is with Permanent TSB and EBS with 4.2%. And the cheapest fixed rate is 3.5% with AIB.

hfallada

Fixed only makes sense if you think rates are going to increase. With the eurozone economy being anaemic with no sign of recovery. Dont expect a rate increase in the next 18 months at least. The US Fed is only talking about a rate increase in the US, as their unemployment is 5.5%. The eurozone Unemployment is a whopping 11.2%(Ireland is under it). With QE starting, its a sign that ECB knows the rate cuts have failed and they must stimulate growth in other ways.

Only fix when you think rates will increase. In the US, people are getting 15 year mortgages with 2.38% fixed. There is obviously more competition in the US(eg Hawaii has 1.42 million people and 9 mortgage providers). Rates here are ridiculous.

https://www.rabobank.nl/particulieren/hypotheek/hypotheekrente/?intcamp=pa-hypotheek-rente&inttype=link-bekijk.actuele.hypotheekrente&intsource=particulieren.hypotheek

Look at Rabo in the Netherlands. Loan to Value of up to 67.5% and 10years fixed is 2.6%

Mellowbird

I agree, I noticed that. Compared to fixed rates from 2012, 2013 and 2014, this year's fixed rates are the lowest. The banks must think they are going to fall in the future. And when I look at other countries' mortgage rates, it looks like we are one of the highest.

Woodville56

Looking at the cheapest fixed rates currently on offer here now - say AIB @3.5 for 1 year fixed as against their variable of over 4%, would a fall of .5% be likely over the next 12 months? Otherwise, such short term (1 year) fixing at 3.5% might be worth a punt ?

Sam the Sham

hfallada wrote: »

Fixed only makes sense if you think rates are going to increase. With the eurozone economy being anaemic with no sign of recovery. Dont expect a rate increase in the next 18 months at least. The US Fed is only talking about a rate increase in the US, as their unemployment is 5.5%. The eurozone Unemployment is a whopping 11.2%(Ireland is under it). With QE starting, its a sign that ECB knows the rate cuts have failed and they must stimulate growth in other ways.

Only fix when you think rates will increase.

Another reason not to fix: the banks are coming under a bit of political pressure to drop their mortgage interest rates given the very high spread between mortgage rates on offer and ECB rates. It has not gone unnoticed that banks in other jurisdictions are offering much lower mortgage rates given the historically-low ECB rates. It has also not gone unnoticed that the two main banks (which are charging the highest interest rates) reported huge profits for this past year.

There is some possibility (but not a likelihood, this being Ireland) that banks will be forced or otherwise prevailed upon to lower the interest rates to the consumer. If this happens, it may well turn out that those on fixed mortgages won't benefit from the lower rates until their mortgages move to variable rates.

There are a lot of "ifs" there, I realise. But given the small likelihood of interest rates going up in Europe over the next 18 months plus, I'd say fixed mortgages should be avoided at the present time.

Eldarion

Sam the Sham wrote: »

Another reason not to fix: the banks are coming under a bit of political pressure to drop their mortgage interest rates given the very high spread between mortgage rates on offer and ECB rates. It has not gone unnoticed that banks in other jurisdictions are offering much lower mortgage rates given the historically-low ECB rates. It has also not gone unnoticed that the two main banks (which are charging the highest interest rates) reported huge profits for this past year.

There is some possibility (but not a likelihood, this being Ireland) that banks will be forced or otherwise prevailed upon to lower the interest rates to the consumer. If this happens, it may well turn out that those on fixed mortgages won't benefit from the lower rates until their mortgages move to variable rates.

There are a lot of "ifs" there, I realise. But given the small likelihood of interest rates going up in Europe over the next 18 months plus, I'd say fixed mortgages should be avoided at the present time.

I wouldn't think the pressure is going to come from a political front to reduce interest rates. The pressure is going to come from potential new competitors entering the market if there's a perception of supernormal profits at work, which I think there is given the huge delta from the ECB rates.

The banks are offering some very attractive fixed rates at the moment to tempt people in but if anything that only confirms that the banks are expecting that they'll have to drop their variable rates over the next few years.

DulchieLaois

I was in with the BOI wipes yesterday for a personal loan, when i was talking about fixing the mortage as this will free up more money for repayments, I was advised "not to fixed my mortgage as they expect rates to drop soon "

However Soon in Ireland could be 2018, as the rate they are going