Fixed Mortgage Needing Review - Advice Please.

[Dinarius]

We have a fixed rate mortgage with AIB which ends on 23/11/2011.

The mortgage was originally €300,000, divided into two separate loan accounts, and split between our house (€100k) and an apartment which we let (€200k).

We are paying interest on both loans of 4.89%, the monthly payment (over 20 years) being €1942.79.

Don't ask why I didn't sign up for a tracker three years ago when these loans were taken out. I don't know either! ;-( (Is a tracker completely out of the question now?)

Obviously, I'm paying over the odds, but what is my best course of action? Should I stick it out until the fixed period ends? If not,what are my alternatives?

We are fortunate in that our tenants pay about 2/3 of our monthly repayment and there is a tax benefit from having allocated €200k of the original €300k to the apartment.

There is now about €267k outstanding on the entire loan. We are considering extending this year and that work will cost about €150k.

We are double income, no kids.

What should we consider?

Thanks.

D.

 

[irishlinks]

So you must have 2 separate mortgages - one for your main residence and the other for the investment property that you rent out?
You probably won't get an investment mortgage at a signifiantly lower rate than the 4.89% you are paying now. The lowest variable rate on investment property at the moment is 4.7% from AIB.
On the "normal" fixed rate mortgage of 100k - you could switch that one and get a variable rate of 3.75% from AIB. (Coming down to 3.25% in Feb) You would need to see if they would penalise you for ending the fixed rate - and if it is worth doing or not. (It would save you about 70 euro a month on the 100k loan ). You could then top up this mortgage at the lower variable rate ( I assume it is this property you are extending?)