Stay fixed or chance going variable.

Hi Folks, Here comes my first post to this site.

I am about six years into a 25 year mortgage. Currently in a three year fixed period since last June. Rate is 5.15%. I checked today about coming out of the fixed and there is no penalty to do this at the moment.

My current payment is €990 a month.If I go variable it will be €915 a month and rate will be 4.65% from mid Feb.

Obviously there is a risk. I am told that it is not solely based on the ECB rate whether the rate could rise or fall.

Can anyone offer an opinion on this? Can the rates fall any more??

I think we will see lower base rates this year so I would go variable, though if the 4.65% rate you quote is a standard variable rate it's not the most competitive out there. There's a good chance imo you will get better value fixed rates later in the year.

demoivre said:

I think we will see lower base rates this year so I would go variable, though if the 4.65% rate you quote is a standard variable rate it's not the most competitive out there. There's a good chance imo you will get better value fixed rates later in the year.

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Yes, interest rates will keep going down this year, so it's a good time to have a variable mortgage.

Other banks are offering better than the 4.65% variable you were quoted so I'd shop around

TheJackal said:

Yes, interest rates will keep going down this year, so it's a good time to have a variable mortgage.

Other banks are offering better than the 4.65% variable you were quoted so I'd shop around

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thanks for replies.There is red tape involved though in changing isn't there? solicitors fees etc...??

widescreen said:

thanks for replies.There is red tape involved though in changing isn't there? solicitors fees etc...??

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Yes there would be costs involved if you decided to change. It doesn't cost much though to ring your present bank and see what they can do for you based on the best rate in the market!

By my rough calculations it sounds like your mortgage is about 166k over 25 years if your repayments are 990 amonth at 5.15%.
To get repayments of 915 - the rate would be about 4.4%. Maybe your figures are net of tax relief.
Get off that fixed rate of 5.15 now - while it is still free to do so. There may well be a penalty in the next few days/weeks.
You could currently get a variable rate as low as 3.25% from AIB and BOI or 3.63 at EBS or 3.75 at Halifax.
This could mean repayments as low as 811 a month. OK variable rates could go up again - but it will be a while before they hit 5.15% again.
You would potentially be better off by about 180 a month compared to your current repayments - over the next 2.5 years that would add up to 5400. Not a bad amount for " a bit of red tape ". You would be working a good few days to earn that.
It might not cost you much upfront either : -
BOI and Halifax still advertise that they will contribute 1k towards legal fees for switchers (don't go through a broker to get this). Others on here have said AIB also pay towards legal fees too (1200 was mentioned).
If I was you I would come off the fixed rate with your current lender first asap. Then approach these other lenders to see if they will give you a better rate. You could also ask your curent lender to try and match any offers you get.