Switch mortgage calculations based on Interest Rate or APRC multiplier?

D

diablo73

Registered User
Messages
25
Hi lads,

Struggling with the basics here. I'm looking at AIB and Avant's 5 year fixed options. I've an LTV of < 50%

AIB
5 Year LTV Fixed <=50%
Interest Rate: 2.35%
APRC: 2.62%
€5.23 per '000

Avant
5 Year LTV Fixed <=60%
Interest Rate: 2.15%
APRC: 2.00%
€5.13 per '000

Question: How do I calculate the savings made over the 5 years by switching to Avant?

What's confusing me is if I should multiply by the APRC (given it's all costs) or the interest rate? .... and if APRC is all costs, in the instance of the Avant offer, how is it's APRC lower than it's Interest Rate.

Thanks
 
fuzzyfrog said:
Question: How do I calculate the savings made over the 5 years by switching to Avant?

What's confusing me is if I should multiply by the APRC (given it's all costs) or the interest rate? .... and if APRC is all costs, in the instance of the Avant offer, how is it's APRC lower than it's Interest Rate.
Click to expand...
Consider posting your mortgage details in the switcher thread (in the format shown in the first post). I'll estimate the savings you would make from switching to another lender.

APRC is not really meaningful when it comes to fixed-rate mortgages. Where did you get those figures?
 
For calculating the cost of your mortgage over the fixed period use the interest rate.

Aprc uses the current fixed rate and the current variable rate to come up with a very rough guide to what you might pay over the life of your mortgage. The idea is when your fixed rate matures you'll roll onto the variable rate. Of course no one knows what variable rates will be in 5 years so while this approach tries to give you a flavour of the total cost it's not going to necessarily reflect the true cost of your mortgage.

The aprc is lower than the fixed rate because the variable rate is lower than the fixed rate
 
The APR shows typical interest over a typical term of probably 20 years (probably in small print.)

It will include the current variable rate as the roll-off rate and make the assumption that this would be the variable rate for the rest of the term - hence why it really is of no use when it comes to long term mortgages.

Avants current roll off rate is 1.95%
AIB's current roll off rate is 2.95%

So the AIB calculation is assuming your rate for 15 years will be 2.95% and avant is assuming your rate for 15 years will be 1.95%. But we all know that rates in 5 years will almost certainly be different to that
 
Paul F said:
Consider posting your mortgage details in the switcher thread (in the format shown in the first post). I'll estimate the savings you would make from switching to another lender.

APRC is not really meaningful when it comes to fixed-rate mortgages. Where did you get those figures?
Click to expand...
AIB and Avant websites respectively.

aib.ie

Mortgage Interest Rates Ireland, Fixed Rate and Variable Rate Mortgages | AIB

aib.ie aib.ie

Ireland’s lowest mortgage rates

Whether switching or purchasing, get Ireland’s lowest fixed rates from as low as 1.95%, only from Avant Money.
www.avantmoney.ie www.avantmoney.ie
 
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