Currently on fixed rate with AIB - offering break with no charge?

I have 4 years left on a 4.39 fixed rate with AIB. They will allow me to break with no charge and go to the SVR at 3.49 (-.25 that they announced)

From what I hear there will be a few more cuts at the ECB so I am kind of thinking I should go with this. What do people think?

What type of rate will your mortgage revert to after the fixed period?

Be very carefull. Read your loan approval letter. If it states the loan reverts to a tracker after the fixed period then insist on this being honoured by the bank when reverting or exiting the fixed rate.


If they say the SVR, walk away.

Hi Irish Guy

This is very interesting.

As Millie and Fiskar have pointed out, if you are entitled to a tracker on expiry of the fixed rate, then you should not revert to variable now.

If this is the case, they should be making the implications of switching clear to you.

Brendan

It will go to the SVR in 4 years, no tracker for me

So what would people do?

We could handle rates of 8% without putting real pressure on ourselves (By not saving anything). Over that it would start putting pressure on what we could afford.

By looking at the eurozone growth/inflation rates interest rates could be cut further next year.

Why did you fix in the first place?

irishguy said:

By looking at the eurozone growth/inflation rates interest rates could be cut further next year.

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Ignore all of this, nobody can predict the future and in any case the only guaranteed reduction on the back of an ECB cut if for trackers. 12 months ago every expert was advising fixed rates as variables were about to go through the roof. There was talk of a return to double digit variable rates.

Soon there will be a flood of people like yourself wondering should they come off their fixed rates.

Don't fix to try and time the market, fix if future interest rate increases will make repaying your mortgage difficult.

If you can afford 8% then go on the variable but start to overpay immediately so that you will be paying off your capital while preparing yourself for future rate increases.

www.moneybackmortgages.ie

Ya the idea was to go on the SVR and overpay (by about 80% to cope with the higher rates when they come). The only problem would be if the rates jumped by C.2.0% or more in then 2 years (As it would be costing me more).

I fixed (the day they were going up) as I was thinking they would go up.

Another point to consider is TRS - does it apply to you and is it at the higher ftb level? If so, this would reduce if the rate reduced as your interest payments would drop.

IMO, AIB are currently losing money on variable rates and they'll increase them whenever they can. The market is volatile and whilst rates should drop another 0.5% next year (doubt if aib will pass on more than 0.25), they could also go the other way. Even just 6 months ago we were looking at higher rates for the end of this year.

I think 4.39% is not too bad especially as it gives you certainty for the next 4 years.

mcaul said:

Another point to consider is TRS - does it apply to you and is it at the higher ftb level? If so, this would reduce if the rate reduced as your interest payments would drop.

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Which means you would only benefit to the amount of 70% of the reduced rate - still a benefit.

OP, if you were on the variable rate and offered a fixed rate for 4 years at 4.39% would you consider it? It sounds a lot better than the rates people are getting at the moment.