Changing lender, reduce mortgage term or pay in extra

[Stevo11]

Hi,
We have a 3yr fixed mortgage with PTSB, which finishes in May, its 4.54%.

We plan on changing lenders as PTSB's current rates are not very competitive. AIB and Halifax seem to have the best rates.

AIB will give us a max mortgage length of 28yrs(due to my age of 37yrs) though where as Halifax will give us the equivalent of what we have left on our current mortgage, 31years.
At the moment we could afford reduce our mortgage length to 28yrs.

Whilst our jobs are safe at the moment, who knows what will happen in the future. We do however have mortgage payment protection.

So three questions.
1 - Is it better to take out a 28yr mortgage or will paying in extra on a 31yr mortgage give the same result (but allows us the freedom to pay only the required amount if need be)?

2 - When deciding on lender, we're not familiar with Halifax, is there anything to look at other than the APR as mentioned in the FAQ post?

3 - Fixed or variable? I read that the ECB may drop from 1.25% to 1% soon. Is it best to lock into a fixed rate once this happens or wait till it starts to rerise?

Many thanks!

 

[LDFerguson]

1 - Is it better to take out a 28yr mortgage or will paying in extra on a 31yr mortgage give the same result (but allows us the freedom to pay only the required amount if need be)?

If Halifax and AIB rates were equal at all times, either option would have the same result. But if one is dearer on rate now or in the future, it makes that one the more expensive choice.

There's a life assurance cost consideration - a 31 year policy will cost you more than a 28 year policy, but the difference shouldn't be great.

2 - When deciding on lender, we're not familiar with Halifax, is there anything to look at other than the APR as mentioned in the FAQ post?

If you bank with AIB, it can be possible to set up your mortgage in online banking which can be useful. Not sure if Halifax offer this. AIB have more branches around the country than Halifax if you want to make manual overpayments etc. This might or might not be an issue for you. But rate is still the most important factor, assuming both will approve you.

Halifax is part of the UK HBOS (Halifax Bank of Scotland) group, if you want to Google them for background.

3 - Fixed or variable? I read that the ECB may drop from 1.25% to 1% soon. Is it best to lock into a fixed rate once this happens or wait till it starts to rerise?

Lots of threads on Askaboutmoney about whether to fix or go variable. Usually, by the time ECB rates start to rise, such rises will have been well flagged and the fixed rates will already have risen first.