Hi - I have a split rate mortgage with KBC
A - 2.5% tracker remaining term 15 years balance 160k
B - 2.45% 5 year fixed 21 years left balance c 170k
Monthly repayments c 1850
Considering potential rate rises I am considering switching to a 5 year fixed green rate with say AIB at c 2.15% with monthly repayments of c 1650 or others banks at c 2.45%. Most fixed rate offers result in slightly reduced payments but main concern is potential rising rates and repayments on the tracker.
Does this make sense over the long term or is the 2.5% tracker still considered good value? KBCI “strongly advise” me not to move off tracker
Isn't all the talk of late about ECB rates going up? So your 2.5% tracker could be 3% later this year. Swapping a 2.5% tracker for 2.15% and coming out of it with 10 years remaining isn't bad IMO. In 5 years time with ECB rates going up, will your tracker is better value?
Hi Black Knight
Thanks for your response. My gut tells me the prudent decision is to switch to a fixed. However, consistent advice has been to hold on to a tracker, including advice from KBC. I have been wondering am I missing something in terms of value over the medium to long term.
I forgot to mention, KBC have confirmed no breakage fee for the fixed.
Hi Black Knight
Thanks for your response. My gut tells me the prudent decision is to switch to a fixed. However, consistent advice has been to hold on to a tracker, including advice from KBC. I have been wondering am I missing something in terms of value over the medium to long term.
I forgot to mention, KBC have confirmed no breakage fee for the fixed.
KBC has to strongly advise you not to switch it. Because if you do and it turns out to be cheaper in 10 years, you could come back and say that they encouraged you to switch.