Mortgage Interest Rates

Evil-p

Hi all,

Just got mortgage approval and put an offer on a house we like.

The bank (AIB) want us to select our interest rate. The best rate is one year fixed at 3.5%.

Variable is considerably higher.

So other than the obvious financial savings how do you pick your interest rate? I know you can overpay on variable but we won't be in a position to do that for a few years so that's not a concern.

Where does one get information about these things?

Thanks in advance!

athtrasna

The banking forum

Jen44

We just got approved aswell. We decided to go with variable as the variable rate they will give you when the fixed rate is over will be a much higher variable rate. It depends yourself what you think some people are happier to know exactly how much their mortgage payment will be and so are happier to go with fixed. We just got information direct from the bank what all their rates were etc what rates would be when the fixed period was up then made our decision based on that.

Evil-p

Thanks Jen44.

Obviously I will speak to the bank about this but I wanted to do some research first. Is it possible to go from 1 years fixed into 5 year fixed after it?

Heisenberg1

Evil-p wrote: »

Thanks Jen44.

Obviously I will speak to the bank about this but I wanted to do some research first. Is it possible to go from 1 years fixed into 5 year fixed after it?

Yes that would be no problem, on the variable rate I assume you mean AIBs LTV variable rate if you choose a LTV band at this stage bare in mind that you can not switch to another LTV rate further down the line an example of this would be if your home had increased in value and you had a better LTV ratio than you currently have today.

Heisenberg1

Jen44 wrote: »

We just got approved aswell. We decided to go with variable as the variable rate they will give you when the fixed rate is over will be a much higher variable rate. It depends yourself what you think some people are happier to know exactly how much their mortgage payment will be and so are happier to go with fixed. We just got information direct from the bank what all their rates were etc what rates would be when the fixed period was up then made our decision based on that.

You choose the variable rate you go on when your fixed rate period ends not the bank.

Evil-p

Ok heisenberg thats interesting and not something I had considered.

Heisenberg1

Evil-p wrote: »

Ok heisenberg thats interesting and not something I had considered.

My advice would be fix it for 1 year currently AIB is offering this at 3:50% and it's not too long a time to be locked in for.

Ragu06

If you choose the variable rate you can overpay as much as you like to bring down the time remaining on your mortgage.
If you choose a fixed rate i.e 3.5% when this period has finished the bank rolls you onto a variable rate interest rate which is the default rate across all the banks currently 4.4% (it may be 4.2%).
You will also have the option to go back into the bank and renegotiate a new fixed rate interest rate.

On a fixed rate mortgage you can only 'overpay' your monthly amount by a maximum of 10%.

KBC are giving the most attractive variable rates at the minute.

Heisenberg1

Ragu06 wrote: »

If you choose the variable rate you can overpay as much as you like to bring down the time remaining on your mortgage.
If you choose a fixed rate i.e 3.5% when this period has finished the bank rolls you onto a variable rate interest rate which is the default rate across all the banks currently 4.4% (it may be 4.2%).
You will also have the option to go back into the bank and renegotiate a new fixed rate interest rate.

On a fixed rate mortgage you can only 'overpay' your monthly amount by a maximum of 10%.

KBC are giving the most attractive variable rates at the minute.

The above is not true with AIB when you roll off a fixed rate they will offer your the current LTV based on your ratio so if your home increased over the one year fixed you can choose a favorable LTV rate subject too a valuation report. AIB do not offer the STV rate to new customers anymore.

Chris_5339762

KBC will put you on the SVR and will not let your choose an LTV rate. Just bear that in mind.

Heisenberg1

Chris_5339762 wrote: »

KBC will put you on the SVR and will not let your choose an LTV rate. Just bear that in mind.

The OP is asking about AIB not KBC.