I have a mortgage with KBC, soon to be sold to BOI.
Current mortage: 120,000 fixed for 3 years at 2.65% (originally a 5 year fixed period) and 178,000 on a Tracker ECB +2.1%.
14 years remaining on the tracker
17 years remaining on the remaining portion.
Loan to value: approx 55%
I have been looking into Avant mortgages as they are offering a fixed rate for up to 7 years of 1.95%. This would mean about 200 euro less a month in mortgage repayments.
I have contacted KBC and they have advised there would be no break fee for the fixed part of the mortgage.
Solicitor cost is 1000 euro
My question is would I be mad to give up the tracker even though there are significant savings to be had?
I don't think it's worth much with a margin of 2.1%. If the margin were 1%, then it would be worth something.
After 7 years at 1.95%, the balance on your mortgage will be down to about €95,000
So even if mortgage rates at that stage are higher than ECB +2.1% , you won't be paying that much extra and you will have only 7 years to go on a decreasing balance.
And you may pay off capital in the meantime which would further reduce the impact of a rate rise after 7 years.
I thought that was the best thing to do but wanted it confirmed by someone who knows what they are talking about! I really appreciate your quick response and will get the ball rolling on switching.