Fixed Mortgages - unable to reserve

G

gaudi

Guest
Hi,

I am at a very advanced stage of loan approval/house purchase, in fact just about to sign contracts. I have decided to fix for 3 years due to the current direction of rates. I asked my lender to reserve the rate for me and they say that the fixed rate applicable will be the rate on date of drawdown, not the current rate.

This seems very odd to me. How could I agree to a rate when I don't know what it will be?

Has anyone come across this before?

Thank you
 
You will be able to chose at the time of drawdown which of the rates on offer at that time you wish to close on.

Sarah

www.rea.ie
 
Thank you for the replies.

I have fixed before with ICS and was able to do it. Also, we have second quote from AIB who offered fixed rate with rate reserved for 45 days. However their rate isn't as competitive as the other lenders.

Regards
 
Even if you have the cash for the deposit draw down say 1,000euros from the mortgage. This will 'lock in' your rate.
 
phoenix_n said:
Even if you have the cash for the deposit draw down say 1,000euros from the mortgage. This will 'lock in' your rate.
Click to expand...

I'm not au fait with the exact ins and outs of the mortgage draw down process but I would have thought that once you dip into the cash then effectively the whole lot is yours and you start getting charged interest from that point, even if you don't actually draw down the rest and start making repayments, for another couple of months.

On a 300K mortgage @ 4.25% that would work out at over 1K a month in extra interest payments for the benefit of a slightly lower rate for a 2-5 year period of your mortgage. It's debatable whether you would save enough over that term to justify the expense.
 
Howitzer said:
I'm not au fait with the exact ins and outs of the mortgage draw down process but I would have thought that once you dip into the cash then effectively the whole lot is yours and you start getting charged interest from that point, even if you don't actually draw down the rest and start making repayments, for another couple of months.

On a 300K mortgage @ 4.25% that would work out at over 1K a month in extra interest payments for the benefit of a slightly lower rate for a 2-5 year period of your mortgage. It's debatable whether you would save enough over that term to justify the expense.
Click to expand...

This is incorrect, you pay on the amount you draw down. As for drawing down just €1,000 you would have to check this out with your lender
 
the only thing to note is that you can't drawdown any of your mortgage until you have signed and completed the sale as the bank doesn't have any security until the property is youus. It might be different where you get a 100% and drawdown the deposit.
 
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