Approved for new mortgage - go fixed or variable?

A

andywhat

Registered User
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Hi Everybody.
Really quick question:
Have been fully approved for 188k @80% LTV purchase price 235k by PTSB (they are the only bank that would lend and believe me we tried them all :rolleyes:). We are meeting them in the morning to decide whether we go fixed or variable etc.? Any advice would be greatly appreciated.
 
andywhat said:
Hi niceoneted
Variable rate 4.5% APR
Fixed 3 Years 4.8%
2 Years 4.7%
All APR
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............

4.5% over 300 months = 1045.
4.8% over 300 months= 1077.

No one knows what rates will do.They are now low so maybe only way is up.Hence fix?

From a (worry) view I would factor in variable rate moving up 1% ie to 1155 each month.
Effectively each 1% will cost you extra 100 each mth.
 
Generally speaking (ie historically and the rule of thumb), a fixed-rate mortgage will cost you more than a variable rate mortgage, over the lifetime of the mortgage. The advantage of a fixed-rate is that you know exactly what you will pay every month.
Rates are at a historical low. Does this mean they're at the bottom? The moved to a historical low the last time the rate was changed, as was the case the time before that, and the time before that again...
I know people who fixed back in 2007 and 2008, "to save money". I was on a variable paying €1,400 per month. Yesterday I paid €857.

Between this post and the previous you've both sides of the argument.
 
That's great advice all..I'll dwell on it over the weekend...tis a lottery really...thanks again ;)
 
andywhat said:
That's great advice all..I'll dwell on it over the weekend...tis a lottery really...thanks again ;)
Click to expand...

Nothing to ponder Andy. Go Variable. I was advised to go variable but pay the fixed rate amount every month.

That reduces the term of your mortgage significantly and you are not stuck on a fixed rate.

You will not beat the bank on this if you go fixed.

Andy save yourself a lot of money, go variable, and overpay your mortgage by the fixed rate amount.

The advice above, got on here saved me a lot of money:)
 
andywhat said:
That's great advice all..I'll dwell on it over the weekend...tis a lottery really...thanks again ;)
Click to expand...

No its not a lottery. Its a decision

If you get a fixed rate you will have the piece of mind of knowing the required repayments, this benefit will cost you €564 per year. (188,000 by 0.3% (4.8%-4.5%)).

You simply need to decide if you think the benefit is worth the cost.
 
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