Advice needed on mortgage type

[priority99]

340k mortgage. With AIB because i got that 2000 euro cash back option.
Cant decide on variable or fixed. Am i right in saying AIB fixed rate are the worst in the country? Also cannot decide on 25 year or 35 year. Difference in mortgage is about €250 per month. Seems small but dont know if it is. If we go 25 year it represents about 40% of our total income but for tha sake of 250 is worth shortening life of mortgage? I really cant decide. We both ahave loans of 300/month also. No other oustanding loans,etc.

My thoughts at the moment are 25 year variable but worried. What are the benefits of tracker v variable or vice versa? (Could not find anything when used search option). Why is there no difference between either with AIB?

Thanks for any replies in advance.

 

[pinkyBear]

Hi there, that all really depends on your own personal circumstances.
We are in the process of switching lenders, we are fixing and reducing our term. We are also at the 40% mark...
The reason being is that while we can we will shorten the term. The additional money would only go tworads booze and ciggerettes and clothes!!!! If our circumstancess change well we can increase the length of our term...
Why fix - well as each rate rises we do find it tight, and we were able to get a good deal....

 

[priority99]

As a matter of interest how much does it cost to switch? If it was minimal then perhaps variable rate is better for now as I could switch immediately on receiving that 2000 euro. I'm guessin that its not as simple as that though. What fixed rate did you get and with whom?

 

[ClubMan]

With AIB because i got that 2000 euro cash back option.

Are you sure that this will not cost you more than €2K in the long run compared to a cheaper lender thus eliminating this cash back bonus? Use Karl Jeacle's mortgage calculator to find out.

Cant decide on variable or fixed.

There are lots of existing threads on the whole fixed versus variable/tracker question. It really depends on your specific circumstances as to whether you should fix or not.

Am i right in saying AIB fixed rate are the worst in the country?

What is the rate on offer? If it's a discount rate what is the normal rate from year two onwards at the moment? See Brendan's new thread on rates:

Best Home Loan Deals

Also cannot decide on 25 year or 35 year. Difference in mortgage is about €250 per month. Seems small but dont know if it is. If we go 25 year it represents about 40% of our total income but for tha sake of 250 is worth shortening life of mortgage? I really cant decide. We both ahave loans of 300/month also. No other oustanding loans,etc.

One difference between 35 and 25 years is that (assuming a 5% rate for the lifetime of the mortgage) you will pay c. €124K more in interest (€380K versus €256K in addition to the original capital sum of €340K).

My thoughts at the moment are 25 year variable but worried. What are the benefits of tracker v variable or vice versa?

This is also covered in several existing threads.

(Could not find anything when used search option).

The AAM search can be flakey. Use a Google search instead - enter the following sort of thing in the Google search box:

site:askaboutmoney.com tracker variable advantages

 

[priority99]

The advantages of tracker versus variable or vice versa? Still couldnt finad anything concrete.

Are you saying I should go 25 year then?

Fixed rates with AIB are much higher than with other banks from researching or am i missing something? they seem to .5% higher.

 

[ClubMan]

The advantages of tracker versus variable or vice versa? Still couldnt finad anything concrete.

.

Are you saying I should go 25 year then?

It depends on your circumstances. All I'm saying is that the longer the term the (significantly in many cases) higher the total interest bill. Your mortgage protection life assurance premiums will also be higher with a longer term.

Fixed rates with AIB are much higher than with other banks from researching or am i missing something? they seem to .5% higher.

Could be. Check Brendan's post and other sources such as the Irish Times property supplement on Thursday etc.