10 Year Fixed Mortgages

T

the leds

Registered User
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Hi folks,


First time posting here!

What are people’s views on 10 year fixed mortgages? BOI currently have an offering at 3.3% (LTV<80%), which seems very good value to me!

The main risk I see is if there’s a need to break the mortgage, which would result in break fees – but am I right in saying there’d only be fees if interest rates were lower at the point of breaking compared to where they are now?

I guess lack of ability to make substantial overpayments is also a downside, but that’s the price you’re paying for peace of mind I guess!

Are there any other risks that I’m failing to see here?


Cheers!
 
In addition to the post @Sarenco has directed you to, have a look at the rates available from other lenders, and their terms in relation to allowing certain overpayments without checking if a break fee applies.
 
Thanks for the replies, guys,
Last checked the site on Friday so hadn't seen Sarenco's link - more or less covers my question alright.
@RedOnion good point. I'm too far down the road with the sale process to change provider at this stage but KBC's 10 year offering seems very attractive at 2.99% for LTV <80%.
I'd also misread the over-payment detail on the BOI website. It's 10% of the monthly repayment or €65, whichever is greater - I had read it as a max of €65. So that's an added bonus.
I'm veering towards the 10 year fixed option. It's a very attractive rate for ~1/3 the duration of a mortgage!
On the breakage fee - am I right in saying that you only pay a fee if interest rates were to drop in the meantime?
As an aside, big thanks to all the frequent posters on here - it's an incredibly useful resource.
 
the leds said:
On the breakage fee - am I right in saying that you only pay a fee if interest rates were to drop in the meantime?
Click to expand...
In simple terms, if interest rates remain completely unchanged, you would have to pay (a small) break fee. Say currently the 10 year rate is 0.95%, and the 8 year rate is 0.75%. so if rates remain exactly as they are, and you want to break in 2 years, it would cost you about 1.6% of the balance (0.2% * 8 years).

However, the market expectation is that rates will rise (hence the rate difference). If rates rise so that the 8 year rate is 0.95% or above, you'd have no break fees.

Interestingly, if it rises above 0.95%, the bank won't give you the difference!
 
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@RedOnion Thanks for clarifying! That's what I took from your key post thread but just wanted to make sure!
Regarding the 19 year @ 0.95% and 8 year @ 0.75% - where do you source these figures from?
 
the leds said:
@RedOnion Thanks for clarifying! That's what I took from your key post thread but just wanted to make sure!
Regarding the 19 year @ 0.95% and 8 year @ 0.75% - where do you source these figures from?
Click to expand...
Apologies, that should have read 10 years, not 19! Sorry, I was typing on phone. (I've edited above in case people think I've lost it completely).

I get indicative rates from here if I don't have interbank rates for the period: https://www.theice.com/marketdata/reports/180
 
Do people see today's announcement by the Government putting downward pressure on fixed rates in the immediate future? Or will the banks be happy enough to forego that business and continue on as is?
It's a minefield of uncertainty out there at the moment.
 
My take on it is that todays announcement increases competition for the banks as there is now an alternative source of finance out there and so banks may need to keep rates low to attract business.
 
Do they really need to keep the rates low though? It's only an alternative source of finance for a select group.
This is a group of customers that the banks would already have declined for mortgage approval.
 
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