Mortgage Rates

Hi,

I have just taken out a mortgage with BOI (First time buyer for 315K). The rate I got was ECB +1.05 for the life of the mortgage. The alternative was 2.5% for 12 months but after year 1 it will go to ECB + 1.3.
I was told, as you always are after the fact, that I should have gone for the lower rate for 12 months and then after the 12 months switch to the standard tracker which is less than ECB + 1.3.

I know that it is a little late now but does this make sense and should I have gone that route ?
Thanks
Paul

Can i ask which bank you got that rate off ?? usually if you get a discount in the early period of the loan then it increases above that rate for the latter half of the loan......the apr is normally the best all round measure of how expensive a loan would be...compare using this rate

I was told, as you always are after the fact, that I should have gone for the lower rate for 12 months and then after the 12 months switch to the standard tracker which is less than ECB + 1.3.

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No, over the life of the mortgage, the ECB + 1.05% rate you secured will save you even more money than 2.5% for 12 months and ECB + 1.3% after that. ECB + 1.05% is an excellent rate for BOI! What loan-to-value ratio are you on?

Hi,
Cost of property was 345 and borrowed 315 from BOI. I did have to do some abck and forth with them. So you reckon that I would not have done better ECB+1.3 if I went for the discounted rate and then tried to switch to a tracker ?
Thanks to all
Paul

Possibly, but with a LTV of > 90% and BOI already having your business, you would probably have had to move to a different bank to get a rate like ECB + 1.05% after the discounted rate expired. ECB + 1.05% that's the significant rate here, since it will apply for the lifetime of the mortgage.

Can someone advise the best URL for web mortgage deal for second time buyer in Eire?

Cheers

PaulM said:

The rate I got was ECB +1.05 for the life of the mortgage.

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If you don't mind me asking, over what term is your mortgage Paul?

I was in our branch of BOI today to negotiate a new mortgage and mentioned to the morgage advisor that I knew of someone who had the rate you mention over the life of the mortgage.

He told me that it was absolutely not possible that BOI would offer such a rate 'for the life of the mortgage'. He stated that the maximum term they would fix for would be 20 years at an APR of 5.2%.

He also pointed out that the fixed rates for 5 yrs is 4.2%, 4 yrs is 4% and 3 yrs is 3.9% so why would they fix for a longer period for 3.35%?

Lads,
Its important to remember that the loan you are talking about is not fixed. It is a variabe loan in the sense that the ECB rate varies. The only gaurantee the bank will give is that their tracker will be within 1.05% of the ECB.

It is exactly as the previous poster expained. It is a vabiable rate changing with ECB rate. The only fixed element to it is that the additional charge on the ECB rate will not change from 1.05% over the 20 years of the mortgage.
Paul