confused12
Registered User
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- 41
And bear in mind that Ulster Bank and KBC (and others) let you make large overpayments without penalty, even if you are on a fixed rate.So personally I don’t see a strong argument for going variable unless you want the ability to overpay your mortgage.
Indeed, but in the short run fixed is cheaper with most providers.I understand there's no way of predicting which will be cheaper in the long run
As a comment on the state of the market, does that not indicate that 1) Competitive + Market pressures are pushing rates to the downside (though they may take time to come through) and 2) Locking customers into longer rates will reduce the switching when the rate changes materialise. Important if you are a close to different LTV bands and particularly the 60% LTV band and are eligible to move to Avant. Outlier in the market and good margin of safety given rates are unlikely to drop meaningfully below that rate at this stage. Did I read recently that 1 in 5 switch's are to Avant? This should prompt action by the main lenders but they have their legacy book to consider.Right now, across the entire market, all lenders are offering lower rates for fixed than variable. More specifically, there is a 'sweet spot' in the 4 & 5 year fixed rates where they are actually lower than shorter terms. Banks are pricing their mortgages to get customers to stay for longer.
No, or at least not currently. Their variable rate is only available as a rolloff from fixed, not fur new business.For the OP do Avant do blended rates?
Short answer:
Right now, across the entire market...
Yes, but you have to remember that AIB has the lowest variable rates of all the banks. The maths aren't too punitive to you, but might it not make sense with another lender.It may not be the most mathematically sound, but we value the flexibility
We have a split mortgage with AIB: 75% of the load is fixed for 5 years, with the remaining 25% on the variable rate. Having the variable quarter allows us to pay off extra when we can/want to, while the majority being fixed at a lower rate means the potential for massive fluctuation in the overall repayments is reduced. It may not be the most mathematically sound, but we value the flexibility, and psychologically this has made sense for us and may be worth considering.
I promised you a view on this. Sorry, it's a bit rambling (nothing new there!!)As a comment on the state of the market, does that not indicate that 1) Competitive + Market pressures are pushing rates to the downside (though they may take time to come through) and 2) Locking customers into longer rates will reduce the switching when the rate changes materialise. Important if you are a close to different LTV bands and particularly the 60% LTV band and are eligible to move to Avant. Outlier in the market and good margin of safety given rates are unlikely to drop meaningfully below that rate at this stage. Did I read recently that 1 in 5 switch's are to Avant? This should prompt action by the main lenders but they have their legacy book to consider.
We do hope to pay off the 25% over 5 years (although maybe it was slightly aspirational!), through bonuses etc, but I take your point and if you're not going to pay off regularly and from an early stage it isn't worth it. Just pointing out that with the uncertainty of breakage fees you can find different ways to create some wiggle room if you are unsure which way to go given that the 5-year fixed rates are clearly where the most value us in terms of interest rates.Do you realistically intend to pay off 25% over 5 years? I think some might e.g. do a 75/25 split for the "flexibility" and actually only end up overpaying maybe 5%. With outsized variable rates, the blended rate may be higher than people think or they end up paying more than the break fee would have been on their overpayment. Its one of the reasons I'm less inclined to fix for 4/5 years as indicated by @RedOnion
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