10 year fixed rate?

cookie1977

Just looking for opinions on a 10year fixed rate of 3.3% on an LTV that's 80%. Good/bad? I thought myself it was good. It's with BOI.

3DataModem

cookie1977 wrote: »

Just looking for opinions on a 10year fixed rate of 3.3% on an LTV that's 80%. Good/bad? I thought myself it was good. It's with BOI.

Seems pretty good to me.

cookie1977

That's what I thought. I'm struggling to see any downside. Seems competitive for my LTV.

cookie1977

cookie1977 wrote: »

That's what I thought. I'm struggling to see any downside. Seems competitive for my LTV.

Main downside to a long fixed is getting out of it if you want to. The penalties may be high.

cookie1977

Im not moving unless I win the lotto... I may need to extend but I can probably either separate that loan out from the mortgage or go with the CU.

TheShow

cookie1977 wrote: »

Just looking for opinions on a 10year fixed rate of 3.3% on an LTV that's 80%. Good/bad? I thought myself it was good. It's with BOI.

Seems good now, just be aware that alot can happen rate wise over a ten year period. Rates are low now and likely to go up, although we have been saying that for a few years now.
The only concern I would have is if rates are significantly higher in 10 years time you will see a big jump in your mortgage payment when the fixed rate expires. Also if rates go lower than they are today, you could be paying over the odds and you are locked in for 10 years.

At the face of it, it seems like a good offer, just the longer term adds some uncertainty.

Undervalued

TheShow wrote: »

Seems good now, just be aware that alot can happen rate wise over a ten year period. Rates are low now and likely to go up, although we have been saying that for a few years now.
The only concern I would have is if rates are significantly higher in 10 years time you will see a big jump in your mortgage payment when the fixed rate expires. Also if rates go lower than they are today, you could be paying over the odds and you are locked in for 10 years.

At the face of it, it seems like a good offer, just the longer term adds some uncertainty.

Well if the rates go up you are insulated against that for 10 years. Shorter term fixed and you will still end up at the same rate in 10 years

The only possible issue I see is that despite rates being low and unlikely to go down in the current model there is some pressure to bring our rates in line with European averages.

TheShow

Undervalued wrote: »

Well if the rates go up you are insulated against that for 10 years. .

yes, but the point i was making is after the fixed rate expires, you could have a nasty increase if rates are significantly higher, rather than a gradual increases if you go on shorter fixed terms or variable.

Henry Ford III

Don't plan on moving house!

iluvfatfrogs

TheShow wrote: »

yes, but the point i was making is after the fixed rate expires, you could have a nasty increase if rates are significantly higher, rather than a gradual increases if you go on shorter fixed terms or variable.

I've seen this reason posted regularly here as a disadvantage, but I don't really understand it?

Surely paying 800pm for 10 years and then 1200pm in Year 11 is a lot better than paying 800 (Y1) -850 (Y2) -900 -950 -1000 - 1050 -1100 -1150 -1200 etc??

(all assuming rates are higher in ten years)

TheShow

TheShow wrote: »

yes, but the point i was making is after the fixed rate expires, you could have a nasty increase if rates are significantly higher, rather than a gradual increases if you go on shorter fixed terms or variable.

Being on the lower fixed rate presumably would mitigate that, you'd imagine.

TheShow

iluvfatfrogs wrote: »

I've seen this reason posted regularly here as a disadvantage, but I don't really understand it?

Surely paying 800pm for 10 years and then 1200pm in Year 11 is a lot better than paying 800 (Y1) -850 (Y2) -900 -950 -1000 - 1050 -1100 -1150 -1200 etc??

(all assuming rates are higher in ten years)

Yep, its just going from say €500pm to €1000pm in one go is what I was saying. But yes what you're saying is perfect sense.

Its not a disadvantage per se, just the reality of it I guess and to be prepared for it.

cookie1977

Yes, and after 10 years my capital will be down a lot so any significant change in say the interest rate would be offset by the reduced capital left on the loan which I wont benefit from until the 10 years are up.

Thanks everyone.

Trish56

KBC are offering 3.05% for a loan to value of 80% if you open a current account with them.

Both 3.05% and 3.30% are great deals for 10 year fixed as its more than likely rates will start to increase mid to end of 2019. Also when the 10 year expires your principal and loan to value will have reduced greatly and all lenders now offer competitive LTV rates. Also you will know what your mortgage repayments will be for the next 10 years especially if you have a young children at the moment.

TheChizler

iluvfatfrogs wrote: »

I've seen this reason posted regularly here as a disadvantage, but I don't really understand it?

Surely paying 800pm for 10 years and then 1200pm in Year 11 is a lot better than paying 800 (Y1) -850 (Y2) -900 -950 -1000 - 1050 -1100 -1150 -1200 etc??

(all assuming rates are higher in ten years)

It means you can't overpay now and reduce the capital doesn't it? So you could end up with more to pay after 10 years?

cookie1977

TheChizler wrote: »

It means you can't overpay now and reduce the capital doesn't it? So you could end up with more to pay after 10 years?

You can overpay now but you wont see the benefits until the 10 years are over. Not that I can predict the future but probably the worst case scenario is that after 10 years if rates rise I still find I'm paying the same amount when I come off the fixed rate.

grogi

TheShow wrote: »

At the face of it, it seems like a good offer, just the longer term adds some uncertainty.

It actually adds a lot certainty - the monthly payment will be €XYZ. The only uncertainty is if it is good or bad. But from planning perspective it is excellent.

Personally with the state of the markets, a lot of people moving abroad - I wouldn't take a fixed rate... There can be huge penalties one wants to emigrate too...

TheChizler

cookie1977 wrote: »

You can overpay now but you wont see the benefits until the 10 years are over.

Oh I was under the impression that a big disadvantage of fixed rates was that they normally forbid over payments.

cookie1977

TheChizler wrote: »

Oh I was under the impression that a big disadvantage of fixed rates was that they normally forbid over payments.

Well there's no point in making the overpayment. It's better off in your own bank account earning paltry interest then make an overpayment just as the fixed rate is ending. But the bank doesn't stop you. I've just come off a 3 year fixed at 3.8% and could make overpayments.

At 3% there's huge benefit in overpaying. You can save thousands.

The more you overpay the less is owed the less the 3% applies to.

stimpson

TheChizler wrote: »

Oh I was under the impression that a big disadvantage of fixed rates was that they normally forbid over payments.

KBC allow you to overpay 10% of the principal on a fixed rate.

Wesser

There's much lower . rates that that available. 2.3 and 2.6 with Ulster bank.

witchgirl26

cookie1977 wrote: »

Im not moving unless I win the lotto... I may need to extend but I can probably either separate that loan out from the mortgage or go with the CU.

You may not be moving but you may want to move who your mortgage is with depending on how rates go during the course of 10 years. It's a long time in terms of the markets - think of where we were 10 years ago.

We fixed for a similar rate for 2 years and will get option to fix then after that should we decide to. Gives us a bit of the insulation against rate movements but also allows us to move mortgage provider in 2 years should we want to.

TheShow

Wesser wrote: »

There's much lower . rates that that available. 2.3 and 2.6 with Ulster bank.

not for 10 years though.

witchgirl26

TheShow wrote: »

not for 10 years though.

2.6% with Ulster Bank for 4 years and you can reassess after that. 5 years fixed range from 2.9% up to comparable with what the OP has offered.

OP bonkers.ie shows a good comparison of the rates which I found helpful when I was looking.

TheShow

2.9% for 5 years is strong indeed, but with a 60% LTV restriction. 2.95% up to 80% LTV.

I found the BOI fixed rate for 5 years competitive considering I was with them anyway and they facilitated a 66% per month overpayment at the fixed rate

witchgirl26

TheShow wrote: »

2.9% for 5 years is strong indeed, but with a 60% LTV restriction. 2.95% up to 80% LTV.

No that's for a maximum LTV of 90% for UB account holders. It's 2.99% for non account holders. Plus €1,500 towards legal fees.

TheShow

witchgirl26 wrote: »

No that's for a maximum LTV of 90% for UB account holders. It's 2.99% for non account holders. Plus €1,500 towards legal fees.

LTV - Non Account holders.

Fixed Rate - Up to 60% LTV 2.90% 4.30% SVR* 3.7%
Fixed Rate - Up to 80% LTV 2.95% 4.30% SVR* 3.7%
Fixed Rate - Up to 90% LTV 2.99% 4.30% SVR* 3.7%

cookie1977

cookie1977 wrote: »

Well there's no point in making the overpayment. It's better off in your own bank account earning paltry interest then make an overpayment just as the fixed rate is ending. But the bank doesn't stop you. I've just come off a 3 year fixed at 3.8% and could make overpayments.

How is it better earning nothing in a bank? . You can pay monthly overpayments when on a fixed rate.

derekbro

Kbc fixed reducing from the 3rd of September, unfortunately the 10 yr rates are staying the same

https://www.kbc.ie/news-and-press/latest-news-and-press-releases/kbc-bank-lowers-mortgage-rates

witchgirl26

TheShow wrote: »

LTV - Non Account holders.

Fixed Rate - Up to 60% LTV 2.90% 4.30% SVR* 3.7%
Fixed Rate - Up to 80% LTV 2.95% 4.30% SVR* 3.7%
Fixed Rate - Up to 90% LTV 2.99% 4.30% SVR* 3.7%

That agrees to what I said. However if you quickly set up an account with Ulster Bank & get salary paid into it then it becomes:

LTV Initial Rate Rate at end of term APRC
Loyalty Fixed Rate - Up to 60% LTV 2.80% 4.30% SVR* 3.7%
Loyalty Fixed Rate - Up to 80% LTV 2.85% 4.30% SVR* 3.7%
Loyalty Fixed Rate - Up to 90% LTV 2.90% 4.30% SVR* 3.7%

TheShow

if i'm not mistaken, they offer 3.2% fixed for 10 years if you open an account with them.

TheShow

witchgirl26 wrote: »

That agrees to what I said. However if you quickly set up an account with Ulster Bank & get salary paid into it then it becomes:

LTV Initial Rate Rate at end of term APRC
Loyalty Fixed Rate - Up to 60% LTV 2.80% 4.30% SVR* 3.7%
Loyalty Fixed Rate - Up to 80% LTV 2.85% 4.30% SVR* 3.7%
Loyalty Fixed Rate - Up to 90% LTV 2.90% 4.30% SVR* 3.7%

yep, nothing is quick with UB though!

witchgirl26

TheShow wrote: »

if i'm not mistaken, they offer 3.2% fixed for 10 years if you open an account with them.

I still wouldn't go for a 10 year fixed rate though for the reasons I noted above.

TheShow wrote: »

yep, nothing is quick with UB though!

Fair enough - I know people who had the opposite experience but that was switching a mortgage to them as opposed to applying. They set up an account and all went very smoothly.

cookie1977

witchgirl26 wrote: »

2.6% with Ulster Bank for 4 years and you can reassess after that. 5 years fixed range from 2.9% up to comparable with what the OP has offered.

OP bonkers.ie shows a good comparison of the rates which I found helpful when I was looking.

I suppose I'm trying to insulate myself against "possible" future rises at a price I can afford now and into the future. I suspect (possible wrongly so) that rates wont drop much more. Hey, we can come back in 10 years and review the decision

cookie1977

TheShow wrote: »

if i'm not mistaken, they offer 3.2% fixed for 10 years if you open an account with them.

I'm with PTSB and have free banking. The monthly cash difference between 3.3 and 3.2 is minuscule for me and that doesn't include having to move.

TheChizler

stimpson wrote: »

KBC allow you to overpay 10% of the principal on a fixed rate.

That must have been it, KBC, BoI and UBL limit to 10% and penalise for going over.

TheChizler

TheChizler wrote: »

That must have been it, KBC, BoI and UBL limit to 10% and penalise for going over.

Upon moving to the fixed rate you can agree an overpayment with BOI far in excess of that. I'm overpaying about 66%/month with BOI.

grogi

Augeo wrote: »

Upon moving to the fixed rate you can agree an overpayment with BOI far in excess of that. I'm overpaying about 66%/month with BOI.

But that's not overpayment. That's simply shortened term.

.... I still have the same amount of years remaining on my mortgage.... once my fixed rate term is up the amount owed is spread over the remainder of the original term, that will be the basis of my future normal payment.

Now I'm overpaying to reduce the effect of the loan interest .... that might well result in a shortened term.

I've an agreed monthly overpayment... how you reckon it's not an overpayment is strange but I'm not overly bothered

https://personalbanking.bankofireland.com/borrow/mortgages/articles/mortgage-overpayment/

BOI call it overpayment too

Shefwedfan

grogi wrote: »

But that's not overpayment. That's simply shortened term.

I would say overpayment


KBC for instance have 2 methods.



Overpayment: I fill in document to say over the next 12 months I am going to pay let says 1500 per month instead of my 1000 per month. They put this into writing for 12 months and is overpayment, every 12 months I send in new document to continue


Reduction of term: again fill in document but you confirm how many years you want to reduce and the bank then works out your repayments...


KBC said they preferred the overpayment because you could change it around. Reducing by the set term can get messy i f you want to change

grogi

Shefwedfan wrote: »

KBC said they preferred the overpayment because you could change it around. Reducing by the set term can get messy i f you want to change

Wasn't it me who told you that? :] https://www.boards.ie/ttfpost/105871005

grogi

Augeo wrote: »

https://personalbanking.bankofireland.com/borrow/mortgages/articles/mortgage-overpayment/

BOI call it overpayment too

I'm actually surprised they would allow such big over-payment.

The idea behind fixed rates is that both parties take a risk - but if you are freely allowed to increase/reduce the amount you're paying, you are reducing your risk exposure: if the free-market rates drop, you could potentially borrow money somewhere else and overpay your higher fixed rate while benefiting from fixed rate when market goes up.

Unless of course you cannot freely increase/reduce your payment and it simply was agreed you'd pay extra 66% of the principal for the whole fixed term. That is reducing the mortgage period (you would pay it back earlier). It also seems it was also agreed to substantially reduce the principal payments when the fixed period is over, to keep the time in line with original figure.

grogi

grogi wrote: »

I'm actually surprised they would allow such big over-payment.

The idea behind fixed rates is that both parties take a risk - but if you are freely allowed to increase/reduce the amount you're paying, you are reducing your risk exposure: if the free-market rates drop, you could potentially borrow money somewhere else and overpay your higher fixed rate while benefiting from fixed rate when market goes up.

Unless of course you cannot freely increase/reduce your payment and it simply was agreed you'd pay extra 66% of the principal for the whole fixed term. That is reducing the mortgage period (you would pay it back earlier).......

You seem to presume a great deal.

It's an agreed over payment. I can revert to my normal payment at any time but can't pick and choose any other overpayment amounts.

grogi wrote: »

It also seems it was also agreed to substantially reduce the principal payments when the fixed period is over, to keep the time in line with original figure.

Nope, you are incorrect again.

When my fixed term is over the balance of the mortgage goes onto whatever the SVR is at that time and of course to the remainder of the original term. why would I agree to doing something for when my fixed term is expired? How could you do such a thing? Sure that would be simply agreeing to fix again far in advance. LOL

This is all basic enough stuff but you seem to want to shoehorn it in to your strange ideas/theories.

grogi

Augeo wrote: »

why would I agree to doing something for when my fixed term is expired? How could you do such a thing? Sure that would be simply agreeing to fix again far in advance. LOL

You agreed to those terms when you signed the contract

grogi

grogi wrote: »

You agreed to those terms when you signed the contract

No I didn't. ... you are claiming "It also seems it was also agreed to substantially reduce the principal payments when the fixed period is over, to keep the time in line with original figure" .............. when the fixed term is over I'm on a variable rate.

The principal payment will be reduced as I've overpaid.... you call this term reduction a few posts ago. You can't have it both ways.

As with anyone on a fixed rate I've agreed to fix for x amount of time and when that expires I'm back on the SVR that's applicable at that time.

HTH

You don't seem to understand how overpayment works. Two people have offered guidance to you but you keep digging, it's OK to admit you were wrong but you don't need to

grogi

Augeo wrote: »

No I didn't. ... you are claiming "It also seems it was also agreed to substantially reduce the principal payments when the fixed period is over, to keep the time in line with original figure" .............. when the fixed term is over I'm on a variable rate.

If interest rates are high in 5 years time how would the principal payments be reduced?

They will be reduced compared to what you're paying right now. You said it yourself: "When my fixed term is over the balance of the mortgage goes onto whatever the SVR is at that time and of course to the remainder of the original term. why would I agree to doing something for when my fixed term is expired? How could you do such a thing? Sure that would be simply agreeing to fix again far in advance. LOL".

Shefwedfan

grogi wrote: »

Wasn't it me who told you that? :] https://www.boards.ie/ttfpost/105871005

you have some memory....I can hardly remember the day of the week

I'm overpaying for a clear reason.
Are you still disputing I'm overpaying or have you moved on to critiquing the term "principal"?

I'm not agreeing to anything beyond my fixed term except that I'll be on the SvR applicable at the time.

There are benefits to overpaying.... you didn't think I could overpay to the extent I am & you also think it's term reduction and not overpaying.