wrongnumber
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Hi all
Looking for some advice on if I should take on Avant One Mortgage for 30 years.
It goes against traditional advice as circumstances change over 30 years and ECB rates are expected to decrease over the next two years.
However, given the odd nature of the Irish Mortage market at the minute, I think it looks attractive. Some thoughts that I am seeking opinions on.
So, if one borrowed €500k, the monthly payment would be €2,387 per month, fixed for the 30 years, nothwithstanding the flexibility of paying up to 10% principle per annum.
Thanks.
Looking for some advice on if I should take on Avant One Mortgage for 30 years.
It goes against traditional advice as circumstances change over 30 years and ECB rates are expected to decrease over the next two years.
However, given the odd nature of the Irish Mortage market at the minute, I think it looks attractive. Some thoughts that I am seeking opinions on.
- The One Mortage is offered at 4% for 30 Years. The current ECB refinance rate is 4.5%. Even if ECB reduce rates by 1% over next two years, it is highly likely Irish Lenders will remain at 4%+.
- Traditionally, Irish lenders offer rates at ECB + 1.5% to +2%. e.g. rates offered of 2% when ECB was 0%. They have been slow to increase rates with ECB, financing it from low deposit interest paid,. So, it stands to reason that even if the ECB reduce rates over next year, Irish lenders could still actually increase rates, especially if they come under pressure to increase their deposit rates.
- The One Mortgage offers signficant flexibility:
- 10% of principle can be paid annually, thus reducing term or monthly payment.
- Early redemption fee is capped at 2% of principle for first 10 years, dropping to 1.5% thereafter.
- If you need to move, they waive this fee if you remortgage with them.
So, if one borrowed €500k, the monthly payment would be €2,387 per month, fixed for the 30 years, nothwithstanding the flexibility of paying up to 10% principle per annum.
- If mortgage rates dropped by signficantly - say 1%- you could seek to refinance and pay the break fee. The breakage fee of c. €10k would be a small price to pay to save on the c. €100k interest over the term and reduced c. €300 p/m payment. Subject to credit approval of course.
- If mortage rates increased by 1%, the monthly payment would stay as is, saving c. €300 per month and c. €100k interest over the term.
Thanks.