should i switch or commit to fixed rate

T

timbob

Registered User
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sorry for what are probably a reasonably basic questions, but i'm not well versed in the processes.

i have a mortgage with aib with a 2.95% variable rate. they've mailed me offering to drop to 2.85% fixed for either 3,4 or 5 years. other than the obvious small saving, is there any real reason to not do this? presumably they're expecting rates to drop generally, but will they even pass that on? based on current trends, is it likely that another drop in variable rates will exceed a 0.1% drop? obviously nothing is guaranteed and it's all speculation.

i've seen that kbc offer switching bonuses and fixed 5 year opening rates of 2.3%. are the costs/hassles of switching worth the savings ultimately?

house value is approx 350k, mortgage remaining is 200k

thanks!
 
timbob said:
are the costs/hassles of switching worth the savings ultimately?
Click to expand...
KBC will give you cashback of 3k, which will more than cover any costs involved. The 'hassle' depends on how clean your finances are - it'll be similar to when you first applied.
I think the KBC rate you quoted is if you operate an active current account with them as well?
 
RedOnion said:
KBC will give you cashback of 3k, which will more than cover any costs involved. The 'hassle' depends on how clean your finances are - it'll be similar to when you first applied.
I think the KBC rate you quoted is if you operate an active current account with them as well?
Click to expand...

my accounts are all very straight forward, no circumstances have changed since i first applied.

that seems like it would be quite a significant saving to move to KBC then? i'll give them a call and see what they can offer, thanks for your help!
 
RedOnion said:
KBC will give you cashback of 3k, which will more than cover any costs involved. The 'hassle' depends on how clean your finances are - it'll be similar to when you first applied.
I think the KBC rate you quoted is if you operate an active current account with them as well?
Click to expand...

i've spoken now to kbc and the offer seems very promising. €3k cash (which like you said, more than covers the solicitor and evaluation) and a drop to 2.3% interest. this would drop my repayments from €852 to €788 p/m.

one further question though - what kind of fees and charges do aib have for moving the mortgage? i assume they won't let it go outright without a cost. is there a calculation to work out their charge, or is it a flat rate? i'm just under 3 years with the mortgage but went with a flexible rate from the start. any info i have found seems only to talk about fixed rate terms.
 
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