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FTB about to draw down in the next month - Fixed or Variable?

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  • 08-02-2024 11:32am
    #1
    FTB_24
    Registered Users Posts: 1 ✭


    Hi all, age 32, FTB about to draw down on a home loan mortgage.

    For context, the price of the house is €295k. I plan to pay a €50k deposit and borrow €245k. I will have about €60-70k cash leftover for some redecorating/light renovation of the house. I would be reasonably confident if I put that much into the house, it will be worth closer to €350-€380k, at which point I could revalue and (hopefully) get a better LTV. So I'm not too concerned about the long term/living there forever, although I do see myself there for 5-10 years.

    My best options are with Haven but I can't decide between the following

    €245k over 30 years @ Variable Rate 4.15%

    Pros: Cheapest rate available to me, I can overpay as much as I want, I can fix at any time.

    Cons: Run the risk of rates going up this year (unlikely I think but hard to say?). Even if so, would Haven go higher than 4.55%?

    €250k over 30 years @ 1 year fixed rate 4.55%

    Pros: If I borrow €250k on a fixed rate, I get €5k cash back from Haven. Some people say it's a bit of a cod, but I could reinvest that €5k into the place and it aligns with my short term plan of light renovation and a revalue next year. Another benefit is certainty of repayment every month.

    Cons: Obviously a higher monthly repayment. Not much else

    Thanks!

    Tagged:


Comments

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    #2
    JVince
    Registered Users Posts: 797 ✭✭✭JVince


    Rates will drop this year. Most likely starting in June.

    However it is unlikely variable rates will fall (except trackers) as the banks are basing rates on the low deposit rates they pay.


    I'd definitely go variable. With the improvements (check for grants), try to get rating to B3 and then switch to their green mortgage (currently 3.65% fixed for 4 years - excellent value)



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