Fixed and Variable Mortgages Compared

06 March 2008
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Fixed and Variable Mortgages Compared

Approximately 70% of all Irish mortgages are classified as variable.

As a general rule, when it comes to remortgages the mortgage term should be kept as short as possible. It is nice to have an end in site when you can look forward to no debt repayments on your family home. 

Fixed Rate Mortgages

If you need certainty into the future in regard to your mortgage repayments you should fix your mortgage for a specified period. This certainty comes at a price which is the difference between a variable or tracker rate repayment and a fixed rate repayment.

Your mortgage advisor will advise you of the alternatives and the cost of the various options. Much depends on your risk profile, the level of the mortgage and your income.

When fixing rates close attention should be given to the options available to you after the expiry of the fixed rate period. 

Should you wish to cancel your mortgage agreement, (for the purposes of moving house for example), then you may incur a penalty for breaking a fixed rate contract. Once again it is important at the outset to have clarification as to the costs of breaking a fixed rate contract. An advantage of a fixed rate mortgage is that you are able to budget for the next X amount of years and your repayments will not increase during this time.

Use our mortgage repayment calculator to compare your mortgage repayments under varying interest rate options

Variable Rate Mortgages

If mortgage rates are reducing or expected to stabilise then a variable rate is generally the best option. T

 

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