FTBer weighing up new mortgage options

Hi All,

I would appreciate people's views on current mortgage options.
I am buying at house €175k and I need an 80% LTV loan for €140k
I have job stability, no loans, savings etc so I do not think approval is an issue but I am looking for the best deal.

BOI will offer 4.5% variable APR and pay 1% stamp duty (€1,750)
PTSB offer 4.3% APR. How can I compare these deals?

Is anyone recommending a fixed mortgage in light of a potential new wave of rate increases?

As a FTBer, I appreciate all input.

Many thanks!

Hi sinky,

On the cost comparison between the two, using this mortgage calculator http://www.drcalculator.com/mortgage/ie/ (and assuming a 25 year term, you start repaying in May and there are no rate changes in 2014)


4.3
Monthly repayment: €762.36
Cost of interest up to end of 2014: 3986.99

4.5
Monthly repayment: €778.17
Cost of interest up to end of 2014: 4173.22


At a rate of 4.3% over the lifetime of a 25 year mortgage (and assuming nothing changes... highly unlikely!) the interest amounts to €88,707.48

At a rate of 4.5%, the comparable amount is 93,449.64

I would suggest playing around with the calculator a bit yourself to see how the different scenarios pan out and work out whether the BoI sweetener is worth the higher interest cost and the higher monthly repayment.

On whether or not to fix, that has to depend on whether you want certainty in your payments for the fixed period. Fixed interest rate comes at a premium as the bank is taking on the risk of its cost of financing going up it will generally set the rate to account for some fluctuations. In general don't fix unless you need that certainty, it ties you to the rate (great if it rises, not so great if it doesn't) and it usually limits or penalises you repaying early.

Hello,

Thank you for your reply.
I've been reading up on fixed vs variable mortgages and I could withstand some interest rate increases so I might go for the variable and overpay to the cost of the fixed repayments for now.

I've been looking at the calculators and see the best deal for me is the KBC mortgage. My main banking for my salary, current a/c etc is PTSB. Is there any advantage to going with them at a higher cost? Is there any way that banks enter into bargaining ie see if PTSB can offer a sweetener if I tell them I am approved by KBC too or do they not have this discretion?

Many thanks again,
Sinky

No particular advantage in having your mortgage at the same bank that I can think of anyway. You can always try negotiating with them but I doubt it will make much difference on their offer.

By the way, I have just seen the advert for the BoI sweetener. It is that they will pay stamp duty to the value of 1% of your mortgage, so it would be €1400 not €1750.

Oh thank you! I didn't catch that part.