Mortgage rates

Al 25

Hi looking at mortgage rates and I have the option of going on a new customer 1 year fixed at 3.50 or 2 year 3.90 and the variable is higher at 4.2 so I was gonna go for the 1 year but I'm in fear that rates will rise when my 1 year is up so debating to take the 2 year 3.90 .
Any thoughts home owners or financial gurus out there

Eldarion

Al 25 wrote: »

Hi looking at mortgage rates and I have the option of going on a new customer 1 year fixed at 3.50 or 2 year 3.90 and the variable is higher at 4.2 so I was gonna go for the 1 year but I'm in fear that rates will rise when my 1 year is up so debating to take the 2 year 3.90 .
Any thoughts home owners or financial gurus out there

What you need to look at also is what variable rates you can avail of after the fixed period ends. I saw on another thread recently that even though the 1 year fixed rate might be the most attractive, it prevents you from availing of the cheaper variable rate after the first yet ends. The 2 year might be best if it allows you to avail of the nicer variable rates.

Relatively, 2 years isn't a very long period to commit a fixed rate too. Yes rates might drop next year but by then you may only have 12 payments left at the fixed rate.

unklerosco

I've seen similar also, fixed at a lower rate but you move to a higher variable rate than the one you could have at the beginning.. suppose it's a matter of working out which is cheaper in the long term..

Millem

I asked the same question....I was told fix for a year. A lot of people think variable rates will drop so when your year is up you will have a lower rate.

bidiots

LTV comes into play on most offers from what I've seen. 1yr fixed usually puts you back onto the SVR when finished, whereas this may differ if you choose 2 or 3yr fixed...
Cheapest I've found so far is KBC which include an extra .2pc off variable for life of the mortgage, if you open a current account with them.
Trying to offset the Ulster bank(1500 off legal fees) and BOI(1% of tot mortgage) offers is confusing as hell though....
My conundrum is now that UB offer is .2% more expensive than KBC, but they offer 1500 initially.
Still seems KBC is the way to go BUT the KBC current account has fee's attached, this just adds to the confusion

Galego

I was asked by BOI to pay 150eur for a new valuation which I just did today. EA was in the house, took measurements and asked few questions. Any idea of how EA does to valuate the house?
I was also planning to fix it for a year as it is the lowest % but I was also thinking that after the year is over I could fix it to something else again. Is that not the case?

hfallada

If you study economies, one thing you learn is to fix when you think the rates will increase. The fact is the Eurozone economy is in bits. Any interest rate increase will kill any potential growth and most likely put the Eurozone into a deeper recession. The ECB knows there is zero chance of a rate increase and has gone as far as buying Government bonds to stimulate Growth (QE). If you can fix now for a year or 2 but not long term, (since fixed rates are so favourable compared to variable but could be lower). Fixed long term(10-15years) in say 2/3 years when the Eurozone is recovering and there is sign of an interest rate hike by the ECB.

I think you could expect an another European bank entering the Irish market soon and bringing some real competition. The interest rates in Ireland are so high compared to other countries, there is no reason why another Eurozone bank wont enter the market. You can get mortgages in Germany, that are just over 1% interest pa. Where as most mortgages in Ireland are around 4%.

murphaph

hfallada wrote: »

The interest rates in Ireland are so high compared to other countries, there is no reason why another Eurozone bank wont enter the market. You can get mortgages in Germany, that are just over 1% interest pa. Where as most mortgages in Ireland are around 4%.

I feel able to comment here. We have just signed a mortgage offer here in Germany. The contract states that we are in arrears as soon as 2 payments have been missed and that the bank does not need to get a writ or anything else... They can basically go get the bailiffs if you mess them around. They can recover the asset then quickly and easily over here, so the risks they face are much lower than crazy old Ireland where not paying your mortgage doesn't mean "out on your ear".

Our rate is 1.46% fixed for 17 years and 2 months, when it will be paid off.

Villa05

hfallada wrote:

I think you could expect an another European bank entering the Irish market soon and bringing some real competition. The interest rates in Ireland are so high compared to other countries, there is no reason why another Eurozone bank wont enter the market. You can get mortgages in Germany, that are just over 1% interest pa. Where as most mortgages in Ireland are around 4%.

Mortgage rates should be the same as unsecured loans. As many believe repossession is the greatest sin on earth. That may change in time but for now rates should be around 8% to reflect irish attitudes

ted1

murphaph wrote: »

Our rate is 1.46% fixed for 17 years and 2 months, when it will be paid off.

Shows how much of a ride we are bring taking for.

Wasn't the Whole EU thing about freedom of trade and price stability and so on

DaisyD2

ted1 wrote: »

Shows how much of a ride we are bring taking for.

Wasn't the Whole EU thing about freedom of trade and price stability and so on

I think you missed the part that said TWO missed Payments (not years or decades like here!) & the Bank simply call in bailiffs & repossess - its the way system should work but would never fly here

hfallada

Villa05 wrote: »

Mortgage rates should be the same as unsecured loans. As many believe repossession is the greatest sin on earth. That may change in time but for now rates should be around 8% to reflect irish attitudes

You have to understand had a booming economy for 15 years. If someone fell behind on their mortgage, they could just sell their house and the sales proceeds would more than cover the mortgage. Everyone benefited as the bank got rid of a non-performing loan and the customer get rid of a mortgage they couldnt pay.

But now we have a court system that cant handle the sheer volume of repossessions. Houses are being repossessed but its a very slow and expensive process for family homes, due to all the procedures to protect home owners from unfair repossessions, but the procedures are excessive.

However BTL mortgages in arrears are being repossessed and sold. I know of several LLs, that their properties have gone from arrears to being sold in 6 months. Saying there is no repos is a myth

murphaph

ted1 wrote: »

Shows how much of a ride we are bring taking for.

Wasn't the Whole EU thing about freedom of trade and price stability and so on

German banks are free to offer mortgages in Ireland. They just don't want to for the reasons I outlined before. German property itself is also a much safer bet.

Villa05

hfallada wrote:

However BTL mortgages in arrears are being repossessed and sold. I know of several LLs, that their properties have gone from arrears to being sold in 6 months. Saying there is no repos is a myth

Not saying there are no repossessions. I'm saying it is incredibly difficult and expensive. As a result rates have to be higher and it is an obstacle to new entrants.
As with most problems in this country. It is those least responsible that have to pay the bill, be it the fault of banks, government, private companies or individuals.

ted1

DaisyD2 wrote: »

I think you missed the part that said TWO missed Payments (not years or decades like here!) & the Bank simply call in bailiffs & repossess - its the way system should work but would never fly here

I saw that and Proper order. I'd gladly pay 1.76 at those T & C as oppose to 3.8%
I'm sure mortgage protection isn't to high over there

Trish56

If applying for a 1 year fixed rate, check with lender if you will go back on the standard variable which is as high as 4.50% or a ltv (loan to value rate) which depending on the loan to value can be as low as 3.55%.

Geuze

murphaph wrote: »

I feel able to comment here. We have just signed a mortgage offer here in Germany. The contract states that we are in arrears as soon as 2 payments have been missed and that the bank does not need to get a writ or anything else... They can basically go get the bailiffs if you mess them around. They can recover the asset then quickly and easily over here, so the risks they face are much lower than crazy old Ireland where not paying your mortgage doesn't mean "out on your ear".

Our rate is 1.46% fixed for 17 years and 2 months, when it will be paid off.

very interesting, sub 2% fixed rate mortgages.

Of course, due to the inability to quickly foreclose on arrears situations here, no European bank will want to enter the market and compete on rates.

This leaves AIB / BoI / ptsb able to charge 3.5-4.5%, miles out of line with wholesale rates.