F
fitzney
Guest
Dear All. Hope you can advise.
My wife and I have just lodged signed letter of acceptance with BOI for a 130,000 euro mortgage. Reasons for new mortgage are 1. educational (two sons about to start college) + 2. consolidation of existing mortgage and other loans. Breakdown will be roughly 60k to existing loans and balance 0f 70k set aside for use over the next four years.
I am 54, my wife is ?? and, if we were not changing and increasing mortgage, we would have been mortgage-free in 8 years when I will be 62. Instead now we will pay this new mortgage off over 10 years and be mortgage-free 'when I'm 64'! ♫
We lodged and were accepted by three companies; BOI, AIB and ICS (with whom we currently have our existing mortgage).
For various (valid to us) reasons we plumped for BOI
Now they are offering the following over 10 year mortgage:
Variable 2.25 APR 2.3 Repay 1210.54 pm
2 yr fix 2.99 APR 2.8 Repay 1254.24 pm
3 yr fix 3.39 APR 3.0 Repay 1278.24 pm
5 yr fix 3.99 APR 3.7 Repay 1314.74 pm
The variable rate of 2.25 is because the LTV is less than 50%. All three fixed rates offered are 'new business' and are only on offer prior to drawdown.
No matter what rate we choose it will represent a considerable increase on monthly repayments compared to what we are used to paying up til now. (over 100% )
If we fix at 2 yrs, we pay 43.70 over the variable monthly repayment
If we fix at 3 yrs, we pay 67.70 over the variable monthly repayment
If we fix at 5 yrs, we pay 104.20 over the variable monthly repayment
Because the situation 'out there' is so completely up in the air we are stuck about making a decision on what to do re rates.
The conventional wisdom re fixing (peace of mind etc) may, at this point, not be as valid as heretofore.
Our thoughts, up until all the imponderables happened (TSB, banks arguments re needing to raise rates because of differential between borrowing rates and rates to savers, the possible ramifications for NAMA and hence mortgagees from the Supreme court judgement re Liam Carroll, this morning's news re Canadian bank's interest in AIB etc, etc, etc!) had been to go variable, pay the 1210.54 pm, set up the new mortgage a/c as a nominated a/c (through banking 365 online) and, if at all possible, pay an extra 100 pm off the capital. That way 1. the term would decrease, 2. if we had a bad month we could keep the 100 'back', 3. if/when rates increase we can adjust the extra we are making downwards and still not 'feel the pain'. Also, we are concerned that if we fix for 2 or 3 years, we will be hit by ECB rate rises when we come back to variable when the fixed period finishes. The extra 104.20 pm needed for the 5 year fixed seem to us to be 'dead money'.
Now we just don't know WHAT to do.
The only other option is to fix a portion and keep the rest variable.
The bank did suggest we might like to pay extra but the flaw for us is that they only calculate the overpayments at end of year, so its better to pay off extra by the month.
I realise that this topic crops up on many threads and that one would need to be the wisest seer ever to be able to predict what really will happen, but if any of you have thoughts/advice on our options as matters stand now, then I would be most grateful. We expect to be committing to a deal early next week.
Thanks for reading
Fitzney
My wife and I have just lodged signed letter of acceptance with BOI for a 130,000 euro mortgage. Reasons for new mortgage are 1. educational (two sons about to start college) + 2. consolidation of existing mortgage and other loans. Breakdown will be roughly 60k to existing loans and balance 0f 70k set aside for use over the next four years.
I am 54, my wife is ?? and, if we were not changing and increasing mortgage, we would have been mortgage-free in 8 years when I will be 62. Instead now we will pay this new mortgage off over 10 years and be mortgage-free 'when I'm 64'! ♫
We lodged and were accepted by three companies; BOI, AIB and ICS (with whom we currently have our existing mortgage).
For various (valid to us) reasons we plumped for BOI
Now they are offering the following over 10 year mortgage:
Variable 2.25 APR 2.3 Repay 1210.54 pm
2 yr fix 2.99 APR 2.8 Repay 1254.24 pm
3 yr fix 3.39 APR 3.0 Repay 1278.24 pm
5 yr fix 3.99 APR 3.7 Repay 1314.74 pm
The variable rate of 2.25 is because the LTV is less than 50%. All three fixed rates offered are 'new business' and are only on offer prior to drawdown.
No matter what rate we choose it will represent a considerable increase on monthly repayments compared to what we are used to paying up til now. (over 100% )
If we fix at 2 yrs, we pay 43.70 over the variable monthly repayment
If we fix at 3 yrs, we pay 67.70 over the variable monthly repayment
If we fix at 5 yrs, we pay 104.20 over the variable monthly repayment
Because the situation 'out there' is so completely up in the air we are stuck about making a decision on what to do re rates.
The conventional wisdom re fixing (peace of mind etc) may, at this point, not be as valid as heretofore.
Our thoughts, up until all the imponderables happened (TSB, banks arguments re needing to raise rates because of differential between borrowing rates and rates to savers, the possible ramifications for NAMA and hence mortgagees from the Supreme court judgement re Liam Carroll, this morning's news re Canadian bank's interest in AIB etc, etc, etc!) had been to go variable, pay the 1210.54 pm, set up the new mortgage a/c as a nominated a/c (through banking 365 online) and, if at all possible, pay an extra 100 pm off the capital. That way 1. the term would decrease, 2. if we had a bad month we could keep the 100 'back', 3. if/when rates increase we can adjust the extra we are making downwards and still not 'feel the pain'. Also, we are concerned that if we fix for 2 or 3 years, we will be hit by ECB rate rises when we come back to variable when the fixed period finishes. The extra 104.20 pm needed for the 5 year fixed seem to us to be 'dead money'.
Now we just don't know WHAT to do.
The only other option is to fix a portion and keep the rest variable.
The bank did suggest we might like to pay extra but the flaw for us is that they only calculate the overpayments at end of year, so its better to pay off extra by the month.
I realise that this topic crops up on many threads and that one would need to be the wisest seer ever to be able to predict what really will happen, but if any of you have thoughts/advice on our options as matters stand now, then I would be most grateful. We expect to be committing to a deal early next week.
Thanks for reading
Fitzney