Approved for new mortgage - go fixed or variable?

A

andywhat

Registered User
Messages
5
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 ). 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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