Interest Rates - which one?

[kildarebuild]

Hi trying to decide what interest rate to use.

Mortgage of 200,000 euro. Either go for fixed or variable. Or a mixture of both.
Mortgage has not been spent yet. Broker is IIB HOMELOANS. Mortgage is being used to build the house. Could anyone advise the best step forward?

Also say i went for a fixed rate can i change this back to variable or so in one year time??

Any help is appreciated.

 

[Sarah W]

You can not break a fixed rate without paying a penalty so don't go into one if you intend/wish to repay or switch the mortgage before the end of the fixed period.

The choice between fixed/variable (tracker) is very much dependent on your attitude to risk and personal circumstances so it's impossible to reccommend one over the other without much more detail......

Sarah

www.rea.ie

 

[Satanta]

Also say i went for a fixed rate can i change this back to variable or so in one year time??

Even if you chose to go fixed this isn't the end of the choices.

You would recieve different rates for fixing for different terms. A 1 year fixed, a 3 year fixed, a 5 year fixed... Each of them more than likely coming with a higher rate due to the longer term of potential safety.

The basic advice usually given is don't fix to try and time the market. If you are on the edge of what you can afford, then fix for the security of knowing that you have this period where you can afford the payments. If you have no issues with payments then you may be better to leave as variable any increases have probably been factored into rates already and it gives you the freedom to accelerate payments and save over the term of the mortgage.