Advice on switching from 2.6 to 2.25

bannerman80

Registered User
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Hi all,

I am just looking for some advice, i am currently on 4 year 2.6% fixed rate with ulster bank. There is just under three years left. I looked into changing to ulster banks 2.3% fixed rate for two years, i was quoted €550 breakage cost to allow me switch.

I have applied to switch to AIB - to their 2.25% fixed green mortgage for 5 years. They are also paying 2000 switcher fees which will cover majority of costs.

My ltv is below 50%. I looked into avants low rate but i dont qualify as i dont live in the city.

Not sure if i should commit to 5 years with aib....any advice would be aporeciated, thank you!
 
Not sure if i should commit to 5 years with aib....any advice would be aporeciated, thank you!

This question isn't really relevant to your switching decision.

Longer-term rates are generally more expensive than shorter-term ones. Fixing for a long term is just insurance against rates rising. You pay a bit more but get peace of mind.

For me I don't think someone who has stable employment and whose mortgage repayments are <20% of their net income should fix long term. They are well able to deal with any increase in rates, so they should take advantage of the cheapest rate on offer, which is usually to fix for one year at a time.
 
Bannerman,

sorry, instead of giving you advice, I am asking you questions.

I am in the same situation as you.

UB 4yr fixed rate mortgage, 2.60% until end Mar 2023.

Started in Dec 2018, two years done.

I am thinking of switching to UB 2yr fixed at 2.2%, same end date.

Also thinking of Avant.

Did UB provide you with the breakage fee? By ringing them?
 
I don't think someone who has stable employment and whose mortgage repayments are <20% of their net income should fix long term.

Hi NRC

That used to be my position. And it should be the position in a normal market.

But while all mortgage rates in Ireland are higher than they should be, variable rates are much higher again.

So it does make sense to fix. For some time, I argued against it on the grounds that fixed rates and variable rates must fall, but I am still waiting.

Forget about breaking. Think of yourself taking out a mortgage today and you have a choice of lenders as your LTV is <60%. What variable rate lender would you go for? I know I would just opt for Avant 1.95% for 5 years. Maybe even 7 years.

Cash back complicates it a bit, but I know that I would not be diligent about moving, so I would go for a lender who offers reasonable long-term value.

Brendan
 
@Brendan Burgess

I just think the yield curve offered by most Irish banks slopes too much upward to make it worth while. If, as in my example, your mortgage payments are low as a % of income you are better off just riding it out and taking advantage of lower rates short run.

If mortgage is a high share of income, and you have little prospect of a pay increase, then fixing makes sense.


I agree Avant Money (if they will lend to you) is a different proposition as their yield curve offered it totally flat.
 
I just think the yield curve offered by most Irish banks slopes too much upward to make it worth while.
Before we get too far talking about curves and such. Context of thread. OP asked about 5 year green rate from AIB. It's their lowest rate...
 
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you are better off just riding it out and taking advantage of lower rates short run.

The variable rates are much higher than the fixed rates.

So people should fix - it's clear.

The OP should fix for 5 years as it's the cheapest rate.

You might make an argument that people should fix for only one year and not for ten years. That is much more open to discussion.

Brendan
 
You might make an argument that people should fix for only one year and not for ten years. That is much more open to discussion.

Yes, that was my argument.

Before we get too far talking about curves and such. Context of thread. OP asked about 5 year green rate from AIB. It's their lowest rate...
Indeed, I wasn't aware of that.

OP seemed to be asking whether they should fix for a longer period per se.
 
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