Ulster Bank fix for 2 years or 5 years?

[smndly]

Sorry for dragging up the old thread.

We've managed to get full approval now from UB but I'm having my doubts about choosing the 2 year fixed rate at 2.25% and am now considering the 5 year high value fixed at 2.2% given the recent contraction in the mortgage market and possible increase in interest rates over the coming years (speculation I know).

We still are likely to try and trade up in 3-4 years time but if interest rates have risen, my understanding will be that the break fee would be small or nil. I suppose the risk would be that if rates fall and we have to pay a large break fee in 3-4 years time. It would be interesting to hear what any of you would do given this choice?

 

[Brendan Burgess]

permanent tsb will be buying the Ulster Bank mortgage book.
So when your fixed rate is up in two years, you will be paying the highest mortgage rates in Ireland.

You should either fix for 5 years, so you are guaranteed the low rate.

Or get a mortgage from Avant or AIB so that you don't have the hassle of switching later.

However, if you are planning to trade up before the 5 years, then you don't need to worry about the costs of switching.

I don't think you should worry about the break fee if you trade up before the fixed rate is finished. It should be quite low. And you might not trade up within the 5 years.

Getting a low rate now and for the next few years is the most important issue.

Brendan

 

[smndly]

Thanks Brendan.

I think ill go ahead and fix for 5 years alright. I like the overpayment option with UB so happy to stick with them or there successor for a few years and then when trading up will pay the break fee and shop around for the best mortgage. And as you say, i may not trade up within 5 years.