AIB Mortgage Interest Advice

thefa

Hi,
Bought our first home almost a year ago and the house wasn’t eligible for the green rates due to the BER rating and we were over 80% LTV. Given the options available, decided to go on the variable rate of 4.15%.

Have now got the BER up to B3 and the LTV is under the 80% so believe we can go for the green rates for 2 years (3.25%) and 5 years (3.30%) which my rough calcs suggest could be a saving of ~€200 a month.

With the ECB rates cut announced at the end of January, would I be better off holding off in the hope of AIB cutting the rates in the near future or lock in what’s available at the minute?

Thanks for any help.

Deagol

My fixed rate with EBS ran out Nov last year. I'm currently in a holding pattern on a variable waiting to see how low green fixed rate might go to before I lock in. With the orange one causing mayhem in the markets though it's a tougher call than it should be.

If there's a recession in the US and big economies in Europe there's possiblity rates will keep going down. My personal target is fixed rate of 2.75% (I'm <50% LTV) - I'll probably lock in at that if it gets there.

TheSunIsShining

Last time I looked, the market was less certain of the expected rate cuts by ECB - linked to the German investment announcement. Don't think rates will go up, but everything is far more up in the air at the moment.

lau1247

https://www.boards.ie/discussion/2058402901/aib-mortgage-interest-advice

ECB cut doesn't necessarily translate into the bank "must" give their rate a cut too (Unless it is tracker, not discussed here). You may or may not be waiting a while.

If I were you and are paying 4.15% now with the hope it would come down to XYZ versus 3.25% fixed for 2 years. You just need to make some assumption of when XYZ will kick in and work out the figures.

If the difference is minimal, then I'd go with the 3.25% fix now and then re-assess in 2 years time.

thefa

https://www.boards.ie/discussion/comment/123271975#Comment_123271975

Thanks for all the replies. 100% on the logic when looking at the 2 year. If I wait around 6 months for a drop, I’d have basically saved the difference in the interim.

I was interested in the 5 year too but the difference between the 3.25% & a theoretical 3.00% over a 5 year period would be material ~€3.5k. Bit of a guessing game but interesting to get some takes on it.

I was in with AIB a few weeks ago about the process of amending and the advisor said it was likely a cut would happen to their rates but no indication on the timeline. They seem to have dropped their green rates in April last year (& again in sept/oct) so the temptation is there to hold off another few weeks.