Fixed V's Standard Rates on PPR with 2 Non-PPR on Trackers

[-Gal1]

I am about to draw down a new mortgage (90% of €285,000) for PPR with BOI on SV Rate @ 4.5%. I have the option of fixing 1/2/3 years @ 4.0% or 5 years @ 4.15% I also have availed of the 1% Stamp Duty Offer. (Locked in with BOI for next 5 years)
I have existing properties which are/will be rented out.

1. Ulster Bank tracker ECB+ 0.9%
2. AIB tracker ECB+.75%

Threads over the last few months recommend staying on the SV rate.

Comments I have are

1. BOI Just announced that they are going to extend the 1% Stamp Duty Offer until the end of 2015; I believe that this will reduce the possibility that they will have major reduction to the SV Rate or Fixed Rates going forward. I can’t see them having both lower rates and the Stamp Duty offer.
2. I am leaning towards the 5 year 4.15% as I believe that tracker rates can only go up and this way I can reduce my overall exposure to rising rates over the next 5 years by protecting my most expensive borrowing.

In 5 years’ time I will be able to reassess my position in respect to my LTV on my PPR and also the possibility of moving from BOI if required.
Is my thinking flawed?

 

[Dermot]

I cannot be certain of what is going to happen but having had the experience of being on a fixed rate many moons ago and it cost me. What I would do if I was in your position I would go for the SVR as I feel that the banks have priced in a margin of safety in their 5 year fixed. I am not all that sure that the 1% Stamp Duty will be enough to keep them competitive when competition becomes keener. I just feel that SVR rates will fall in the near future. I suppose I like a small bit of risk but the call is ultimately yours. I do not see much of a downside to going variable. Good luck in whatever you choose.