Good value mortgage??

[clipper1981]

As an employee of a leading financial institution I recently took out the following mortgage:

Year 1 300k @2.94% fixed for the first year

After year one 190460 @ 3% for 35 years (providing I stay working with bank) As this is a preferential rate I will pay BIK.

Remaining balance will be at tracker rate.

Would people consider this a good deal? Thanks in advance.

 

[CCOVICH]

Have you calculated the amount of BIK you will pay?

I think that you are better off going with the lowest rate in the market-BIK generally seems to make employer offerings worse value than what is available elsewhere.

 

[clipper1981]

Based on the specified rate of 4.5% from revenue.ie I work out that I would be paying BIK of €2857 for the year or €238 per month

 

[cloughy]

the specified rate for BIK on preferential mortgages is not 4.5%, AFAIK it is 3.5%, thats not to say it wont go up next year due to increasing Euro base rates. On this basis the 190K would cost (3.5-3%) = 950 which would be taxable, which would be 400per year or 33 per month. The effective interest rate would be 3.21fixed which is fairly good, and hard to beat in the current market.