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Changing from variable to fixed rate

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  • 20-03-2021 11:14pm
    #1
    peadar76
    Registered Users Posts: 246 ✭✭


    I am on a 2.95% variable rate with Haven. I have the following alternative rate options-
    - 3 year fixed at 2.55%
    - 4 year fixed at 2.85%
    - 5 year  fixed at 2.55%
    - 50 % ltv 2.75%

    I don't understand why the 4 year fixed is higher than both the 3 and 5, but regardless of that, it seems a no brainer to go fixed at 2.55%. Is it as simple as that, or am I missing something?


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    #2
    Q&A
    Registered Users Posts: 554 ✭✭✭Q&A


    Is it that simple, to improve your current position then yes. You'll save 0.4% now. Is it the BEST option for you right now, well that could be a very different story. I would say haven is almost certainly not the best for you.

    You might get a better rate in the future but that's crystal ball gazing and you could end up waiting forever for that better rate that never materialises. Even if you fixed today and a better rate came along tomorrow you can always break out of your fix (assuming it's cost efficient). So no strong argument against fixing with haven.

    The only thing I would say before fixing with haven is to see if you'd be better off switching to a difference provider.

    On rates we're talking 2.55% from haven when you could be looking at 1.95% from Avant but there are LTV and location requirements with them. Other providers won't come close to Avant but will be competitive when compared to haven. So worth having a look around

    It's not the rate that matters but the net cost of the mortgage. Rates are a large chunk but don't overlook cashback offers. You might be better off switching and availing of these offers. The faster you plan to pay off your mortgage the more emphasis should be placed on cashback vs the rate. Conversely, the longer the expected mortgage or the larger it is relative to your income then more emphasis should be put on interest rate. Where that sweet spot is really depends on the specifics of your position. But as an example you could get a fixed rate of 2.4% for 5 years from KBC and cashback of €3k i.e., a lower rate and cash in hand.


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    #3
    Trish56
    Registered Users Posts: 1,256 ✭✭✭Trish56


    It depends on your loan to value - If your loan to value is less than 60% a two or three year fixed rate with KBC would be 2.25% if you open a current account with them and 2.40% for a 5 year fixed. Between 60% to 80% loan to value rates would be 2.30% for 2 and 3 year fixed and 2.45% for a 5 year fixed. You also get 3k cash back and can reduce your principal by up to 10% without penalty during the fixed term.


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