Fixed mortgage-1year 2 years or 5 years

1dav

Hi all.

What are your thoughts on fixing mortgage rates at the moment?
Would you recommend fixing for 1,2 or 5 years. Is there any more room for the rates to drop?

Sheep Shagger

1dav wrote: »

Hi all.

What are your thoughts on fixing mortgage rates at the moment?
Would you recommend fixing for 1,2 or 5 years. Is there any more room for the rates to drop?

Depends on your situation and if you think you’ll want to make any lump sum repayments in the fixed rate period.

Personally am looking at a 7 or 10 year fixed rate - can’t see rates going any/much lower and the ability to lock in rates is attractive.

myshirt

Yes, fixing is generally advised now. Normally you pay a premium to fix, but with the way the market is now, there are a good few products where you don't.

Mantis Toboggan

I've gone with the 3% fixed for 5 years with the bonus and 3% cashback. Atleast we'll know what we'll have to pay every month.

uberwolf

1 year fix seems pointless to me? I just fixed in, would have taken the rate for the life of the loan if it were on offer

Chris_5339762

Bear in mind some break fees for fixed rates are extremely low at the moment (Depending on lender) which makes it attractive to fix and then break if a deal comes along.

Friend of mines break fee on his relatively new mortgage was only about €150, he saved that in two months on the new rate. No brainer really!

BBMcQ

Don’t forget you can split your mortgage up too if you want ie. 50% fixed and 50% STV. Means that the ups and downs aren’t as severe and you can still pay off a lump if you get some good news.

There is a huge value added with fixing that security of knowing what you will pay every month.

aloooof

We're looking to fix with BOI for 5 years @ 3.0% (with 2% cashback and a further 1% after the 5 years). You can overpay without penalty up to 10%, which we intend to do. After this, we will be at a lower LTV bracket, so will be re-assessing what's on offer then, but anticipating higher interest rates than currently.

Pkiernan

A friend in Germany just fixed at 1.4% for 10 years!

We can never hope to get those rates here due to strategic defaulters

Sheep Shagger

Pkiernan wrote: »

A friend in Germany just fixed at 1.4% for 10 years!

We can never hope to get those rates here due to strategic defaulters

Not sure defaulters the the primary reason cross border mortgages arn’t available. Nobody seems to want to bring them to the people of Ireland

Pkiernan

Sheep Shagger wrote: »

Not sure defaulters the the primary reason cross border mortgages arn’t available. Nobody seems to want to bring them to the people of Ireland

Because the banks have to factor the cost of default into the mortgages of decent people who pay.

With repos here taking 5 to 7 years, someone has to pay.

But to the Ops question, euro interest rates won't increase as early as some people think, especially with Italy's problems

Sheep Shagger

Pkiernan wrote: »

Because the banks have to factor the cost of default into the mortgages of decent people who pay.

With repos here taking 5 to 7 years, someone has to pay.

But to the Ops question, euro interest rates won't increase as early as some people think, especially with Italy's problems

Regardless of defaulters - that’s for the domestic banks to cover.

We’re supposed to live in one Eurozone meaning we should be able to have a current account from a retail bank in say France, credit card from a bank in Austria and mortgage from a bank in Portugal but sadly that’s still not possible and the Irish consumer is the one who is suffering.

toby2111

Advice needed - we're sale agreed, approval with PTSB (only bank to take us on). Should we go with 3 year fixed at 3.15% or 5 year fixed at 3.25%?

Chris_5339762

5 would be my call. 3.25% aint bad, since you've only got one bank willing to take you on I'm guessing (and this is just guessing) that you haven't got pots and pots of money so take the known mortgage repayment and sit back for as long as you can... ie: 5 years

Watch the market in case it'll increase at the end of the five years, but keep an eye on rates and what the break fee would be. But I would say that 0.1% in the difference between the two rates would be worth it for the 5 vs 3 years of guaranteed payments.

toby2111

Cheers. Yeh, was leaning towards the 5 year just for certainty. Would there be much of a break fee if that rate were to drop lower or even below 3%? How do PTSB calculate these fees? Is there an actual formula?

Chris_5339762

That I don't know. It'd be in the documentation somewhere or you could ask them. Its bank and mortgage size dependent. I can't see rates decreasing by that much more... mine did decrease a little when I was on my fixed rate years ago and it was annoying but the certainty of the repayment was worth it during those first few years. Then when I rolled off the fixed rate I went variable for a while and switched banks.

jester77

Pkiernan wrote: »

A friend in Germany just fixed at 1.4% for 10 years!

We can never hope to get those rates here due to strategic defaulters

That actually even sounds a little high. I've the first 100k of my mortgage fixed for 10 years at 1%, the rest for the full term at just under 2%. The idea being that I will pay off the 100k once the 10 years are up.

The numbers being mentioned here for fixing for just 3 or 5 years are crazy :eek:

toby2111

jester77 wrote: »

The numbers being mentioned here for fixing for just 3 or 5 years are crazy :eek:

They sure are..... But what's our alternative???

hmmm

Sheep Shagger wrote: »

Not sure defaulters the the primary reason cross border mortgages arn’t available. Nobody seems to want to bring them to the people of Ireland

Mortgages in Ireland are effectively non-recourse, there are people who have paid nothing for years still in their houses. Some of them appear to even be renting these houses. No bank is going to lend at low rates in that scenario, the whole point of offering low rates is the ability for a bank to foreclose if needed.

Cyrus

hmmm wrote: »

Mortgages in Ireland are effectively non-recourse, there are people who have paid nothing for years still in their houses. Some of them appear to even be renting these houses. No bank is going to lend at low rates in that scenario, the whole point of offering low rates is the ability for a bank to foreclose if needed.

being non recourse would be less of an issue if you get the asset, its the ability to take the asset thats the real issue.