Should I fix my AIB mortgage after rate cuts?

Just looking at that table for fixed rates. It now states that existing customers can fix for one year @3.50 is this correct, a typo or am I misreading it. If you can fix for the year @3.5 its surely a no brainee?

celticbhoy32 said:

Just looking at that table for fixed rates. It now states that existing customers can fix for one year @3.50 is this correct, a typo or am I misreading it. If you can fix for the year @3.5 its surely a no brainee?

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Don't assume that.

What if this pressure on rates forces them down further.

Banks are sneaky, they would love to lock you all in with a fixed, they are borrowing really cheap, will make a very big margin on the fix and have all their borrowers trapped as there are financial penalties for breaking fixed rates.

And conversely, if you think rates are going to rise, of course the fix could be great - nobody had the answer as to what rates will be in a year or two

Bronte said:

Don't assume that.

What if this pressure on rates forces them down further.

Banks are sneaky, they would love to lock you all in with a fixed, they are borrowing really cheap, will make a very big margin on the fix and have all their borrowers trapped as there are financial penalties for breaking fixed rates.

And conversely, if you think rates are going to rise, of course the fix could be great - nobody had the answer as to what rates will be in a year or two

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Don't get me wrong, I know they're sneaky. Of course its a gamble, but its only 12 months, I can't see rates falling by half a percent in 12 months, hopefully wrong, and even if they do it'l be another whole before a new cut is announced, meaning what you save in the interim will negate rate cuts down the line?!

It's not quite a no brainer.

What rate would you be on otherwise?

If you are on an LTV rate of over 80% , you will be paying 4%.

So you are getting a cut of 0.5%

It depends on whether you think that the public pressure will work to reduce rates further in the near future.

If your new rate will be 4%, then it's 50/50. If your new rate is going to be lower, I would wait.

Also check out the conditions of fixing. What rate do you go onto afterwards?

For example, if you are on an LTV rate of 3.8% now, would you go to the SVR after the fix or the LTV rate?

celticbhoy32 said:

Don't get me wrong, I know they're sneaky. Of course its a gamble, but its only 12 months, I can't see rates falling by half a percent in 12 months, hopefully wrong, and even if they do it'l be another whole before a new cut is announced, meaning what you save in the interim will negate rate cuts down the line?!

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Agreed, if you had to draw down soon, on a 270k mortgage, the SVR at 3.9 vs 1yr fixed at 3.5 is a difference of €61 per month. Assuming you can drop to the regular SVR after the fixed term.

Also, that 3.5 1yr fixed rate was there before the announcement today and is actually unchanged by it as per the PR.

LTV is +80% so my new rate will be 4% after the cut. By fixing for the 12 months I would be gaining an extra .5%
I used the term no brainer loosely but it does appear to be a good deal. Also, and I could be wrong, but aren't SVRs discontinued now? All custom now is LTV?
Looking forward to the meeting on the 7th, keep up the good work Brendan

FYI, I recently came off a 1-year fixed rate. I had been on LTV>80% prior to fixing.

When coming off the fixed rate I received a letter from AIB outlining my options (LTVs & Fixed etc). The letter said that if I did not select any of the options, I would be given the SVR (at the time = 4.15%) by default.

I had a valuation carried out on my property and submitted it along with selecting the LTV >50%, <80% rate.

What I'm not sure about is whether you can get an LTV rate, after coming off a fixed rate, without having to get a valuation done on your property (which would cost approx €130-150)??

For example, if I were to fix again for 1-year, will AIB put be back on the LTV >50%, <80% rate again without requiring an up to date valuation from me?