Trying to figure out what the best mortgage rate is for you? This article will walk you through variable rate, fixed rate and split mortgages and show you how you can compare mortgage rates to get the best deal for you.
What Types of Mortgage Rates Are There?
Variable Rate Mortgages
In this instance your mortgage rate may fluctuate in line with changes in the European Central Bank (ECB) rate or indeed the individual bank may amend the rate from time to time. With a variable rate mortgage, there is greater flexibility with monthly repayments and you can make a lump sum repayment at any stage without having to incur a penalty/fine.
It also provides the option to increase monthly repayments at any stage thus reducing the capital balance outstanding.
Fixed Rate Mortgages
In this instance your mortgage rate will not fluctuate in line with changes in the European Central Bank (ECB) rate nor if the Bank changes the variable rate within your specified Fixed Rate Term. Your monthly repayments will remain the same during the Fixed Term.
There may not be the option to make a lump sum repayment at any stage* and if you clear the mortgage in full within the Fixed Term you will be subject to a penalty/fine*.
*this varies from bank to bank.
Split Mortgages
Some mortgage loans may spilt providing an element of interest only and capital repayment on two separate loans with a view to reducing the repayment burden for a limited period.
How To Compare Mortgage Rates
As a homebuyer, you want to secure the best mortgage rate possible, as this will likely be one of your largest monthly expenses. The rates you can qualify for can depend on many factors such as your credit rating, the size of your deposit, and current debt levels.
As a result, you want to make sure that you are only looking at rates that may apply to your situation.
Variable or Fixed Rate?
To truly compare rates, you must first decide if you would like a variable or fixed-rate mortgage. In recent times in Ireland, however, some of the best rates on offer have actually been fixed rates, which is unusual by international standards. As a result fixed-rate mortgage holders are getting peace of mind, stability, and better value, so it’s unsurprising that more and more people are choosing a fixed-rate.
How much of a deposit?
Next, you must consider how much you can put down as a deposit. If you have a deposit of 20% you will likely be able to get a better rate than if you only have the minimum 10% deposit. Also remember that you will need cash for stamp duty, legal fees and moving costs, so be aware that you cannot use all your savings as a deposit.
Compare the mortgage rates available to you.
Once you have those parameters worked out you can look at rate comparison tables from places like the Competition and Consumer Protection Commission(CCPC). Be careful to look for unbiased comparisons, as many websites will only show the lenders they have deals with versus the entire market.
There are many online calculators available that will give you a quick overview of what your monthly payments may look like with certain inputs, but for a more specific answer consider talking to a mortgage broker that can assess your unique situation.
Find Out How Much You Can Borrow
As a mortgage broker in Ireland with a reputation for delivering exceptional personal service, our goal to ensure first time buyers, second and subsequent buyers and investors have all the answers & assistance they need when buying their home. To find out how much you can borrow, arrange a no-obligation consultation with one of our team at a time that suits you. Just email us at info@symmetryfinancial.ie or call us now on 01 6831673. We’re here to help.
Please note: On most mortgages, we don’t charge a fee as we collect our fee from whichever bank you choose and the bank pays us once your mortgage is issued. However, for mortgages under €150,000 we may charge a small fee.
How To Get A Mortgage – A Step By Step Guide
