Last edited: 3 Aug 2017 How to choose the best mortgage Thanks to Sarenco and Red Onion for clarifying a lot of these issues - but the opinions expressed here are my own. Note: This is based on rates and conditions as of August 2017. The mortgage market is dysfunctional at present and a normal decision making process does not apply. As of August 2017, you should fix your mortgage rate for three reasons Fixed rates are a lot cheaper than variable rates (They should be higher but that is the way the market is.) If mortgage rates fall, you will be able to break out of the fixed rate and move to the lower rate. You will have to pay a break fee, but this fee will probably be very small or even nil for anyone fixing now. Even if it's too expensive to break, the rates at which you can fix are still a lot cheaper than variable rates. If mortgage rates rise, you will benefit from having fixed. You should probably go for a cash-back deal In a normal market, one would expect that the cash-back deal would result in much higher rates, but in this dysfunctional market, they are only a bit higher You are still free to switch to another lender at any time – the lender cannot reclaim the cash-back. (In practice, another lender probably will not take you on for at least a year.) Review your position after one year After one year, you should be able to switch to another lender by paying a break fee. (Of if you fix now for just one year, there will definitely be no break fee.) We don’t know what the market will be like this time next year, but this is what I expect: Cash back deals will be limited to around €1,500 to cover the legal costs Variable rates will be lower Fixed rates won’t be much different It will probably make sense then to switch to a variable rate. But who knows? The market may still be dysfunctional. Review your position when your loan to value falls below 80% Rates for mortgages with an LTV of less than 80% are usually much lower than for those above 80%. So if your LTV falls because the value of your house has risen or because you have paid off capital, ask your lender for a lower rate and consider switching your mortgage to another lender.