mortgage - fix or not - switch or not

[poppy1]

We are doing a self build and between us bring home 840 a week. we are getting 220k of a mortgage for 35yrs. with are with ulster bank at the moment and are having a nightmare trying to get our stage payments from them, it takes them a month to process them while we have tradesmen calling us every day for cash!
anyway we dont know whether to move banks when we draw down the full amount, and fix, or go variable or tracker etc.
Is €1200 a lot to be paying on our wages especially with esb, oil etc ontop of that?
thanks

 

[ClubMan]

Have you read the many, many threads (probably c. 10 in the last few weeks alone!) on the whole fixed versus tracker/variable rate question?

 

[LDFerguson]

There's a well-used rule of thumb that says that your loan repayments ideally shouldn't exceed about 35% of your take-home pay. Obviously it's only a very rough rule - if you were earning €20,000 net per month you could probably scrape by on less than 65% of it after loan repayments.

Your take-home pay is €3,640 per month and your loan repayment €1,200 per month so you're at under 33% at present. The higher end of affordability but not into danger territory according to the rule of thumb. I'm assuming that you have no other loans.

If you're worrying about your monthly repayments and the possibility of future interest rate increases, you should consider fixing for peace of mind alone. But as ClubMan says, have a look at other threads here on Askaboutmoney for arguments for and against fixing.

Liam D. Ferguson
www.ferga.com