FIXED MORT­GAGES

Sunday Independent (Ireland) - Business & Appointments - - FRONT PAGE -

Don’t over­look the fixed rates of­fered by an ex­ist­ing or new lender — as switch­ing to a fixed-rate mort­gage from an ex­pen­sive vari­able one could save you a lot of money. Some lenders have cheaper fixed mort­gages than vari­able ones and some of the fixed mort­gages avail­able are amongst the cheap­est mort­gages around. Since the start of this month for ex­am­ple, KBC has been of­fer­ing a 10year fixed mort­gage of 2.99pc to those bor­row­ing be­tween 60pc and 80pc of the value of their home.

Ul­ster Bank of­fers a four-year fixed rate of 2.6pc to cus­tomers bor­row­ing €300,000 or more — as long as no more than 80pc of the value of the home is be­ing bor­rowed. Bank of Ire­land of­fers a two- and three-year fixed rate of 3pc for those bor­row­ing up to 80pc of the value of their home.

Only con­sider fix­ing your mort­gage, par­tic­u­larly if it’s a seven or 10-year fixed rate, if you don’t ex­pect to move home. This may not be the case if you re­cently bought your first home. “If this is your sec­ond or third home, you’re un­likely to move again so you could con­sider KBC’S 10year fixed rate,” said Michael Dowling, man­ag­ing di­rec­tor of Dowling Fi­nan­cial.

The main ad­van­tage of a fixed rate is that you know ex­actly how much your re­pay­ments will be for a set pe­riod of time. There is an ex­pec­ta­tion that in­ter­est rates will start to rise again in the com­ing years and home­own­ers on fixed mort­gages would be shielded from such rises as their re­pay­ments would re­main the same. How­ever, should in­ter­est rates fall, those on fixed mort­gages lose out on the ben­e­fit of rate cuts as only those with vari­able mort­gages would get such cuts passed on (de­pend­ing on the lender).

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