variable, tracker or fixed?

H

Hoolers

Registered User
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am taking out a substantial mortgage and, as with all lenders, have been offered a variety of repayment options. i know variable and tracker rates carry an element of risk but i could absorb a rate increase corresponding to a repayment increase of a couple of hundred per month. nonetheless am getting all sorts of advice from friends who think i am crazy not to fix for at least the first year, so i don't know what to do. i'd appreciate some advice on which of the following options might be best. most importantly if i decide not to fix, would i be better going for variable or tracker?

tracker: 2.99% / APR 3.00% / repayment €1,537 pm
variable: 3.25% / APR 3.30% / repayment €1,595 pm
1 yr fixed: 3.45% / APR 3.30% / repayment €1,641 pm
2 yr fixed: 3.55% / APR 3.40% / repayment €1,664 pm

is it worth my while paying the extra €100 or so per month (tracker vs. 1 yr fixed) in order to have the security of a fixed rate? anyone know how much extra a 1% rate increase would cost me per month?

all comments and advice welcome.
 
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I've just heard the PTSB are dropping their new business fixed rates in the next few days......

Personally I think Trackers are the best bet at the moment but if your situation is such that a 0.25 or 0.5% increase in interest rates would make life difficult for you then a fixed rate - 2 or 3 years - might be a better option. It's really down to personal preference.

Sarah

www.rea.ie
 
thanks sarah,

any idea how i'd calculate how much a 0.5% increase would cost per month? also what's PTSB?!
 
I would hold off on fixing at the moment as the rates are due to fall according to the ECB. PTSB means Permanment Tsb Bank! Fix it if you really want to in a couple of months!
 
salmon2005 said:
I would hold off on fixing at the moment as the rates are due to fall according to the ECB. PTSB means Permanment Tsb Bank! Fix it if you really want to in a couple of months!
Click to expand...

The ECB have not said anything yet, there is media and commentator speculation they might (and some who think they won't).
 
The problem about fixing or not fixing is that most of us wont do it until the rates are already rising. This is what will happen.

I think the fact that the rates for fixed are down, lowest in 35 years or maybe its 50 now, you could argue should you wait until they fall again. Its a bit like Dot.Com shares .. do you wait and wait .. or do you accept that rates are at an all time low, and is there much likelyhood that they will fall appreciably more, as distinct from the possibility of variable rates dropping.. then think of inflation with the Oil prices ...and they may then shoot up.

I would think a one year is a waste of time and would be thinking that folk should be thinking seriously of fixing or capping.
 
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