Changing to Fixed Rate Mortgage and Lump Sum Repayments

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Geralfie

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15 years left on my Mortgage Variable Rate (4.3 %). The remaining balance is €105,000.
The interest rate is high compared to what is offered by other providers but I don't want the hassle/expense of changing. BOI my current provider have a 3% fixed rate .
I also have €25,000 on deposit that I want to use to reduce my number of years left of my mortgage but keep the same monthly repayment amount.
So after paying the lump sum on my mortgage I plan to change to a fixed rate , do you think this is a wise course of action and how many years would you fix it for?
 
What hassle is there to switching?

As you’ve literally given us no financial details other than the mortgage and lump sum it’s impossible to know what to advise you. Other than a lower rate is of course better.
 
Hi Geralfie

First of all, Bank of Ireland will give some customers who threaten to switch a rate of 2.8%

Bank of Ireland quoting lower rates than their rate card?

So you should tell Bank of Ireland that you are switching and see if they offer you this rate. Don't pay off the €25,000 as they will be more interested in keeping a bigger mortgage than a smaller mortgage.

I think you should fix for 5 years at 3% or 2.8%.

If fixed rates come down further, there is a fair chance that you will be able to break out of the fixed rate with little or no penalty.

If you could deal with the small hassle of switching KBC will pay you €3,000 towards the cost of switching and you could fix for 5 years at 2.6%.

Well worth the hassle. But don't let the indecision put you off. Get the lower rate from BoI.

Brendan
 
Thank you Brendan for your advice. Ideally I would like to reduce my debt and i can afford to pay off €25k as im not gaining leaving it in my deposit a/c. I will speak to BOI to see if they will give me 2.8% fixed rate. If they wont i would certainly consider switching to KBC at 2.6% as you and Bronte dont believe it is much hassle to switch. Thanks again.
 
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