Interest Rate Types

There are two types of interest rates:

Fixed
Variable

Fixed interest rates are fixed for a specific time (i.e. 1-year all the way up to 10-year and more in some cases). While your mortgage has a fixed rate of interest, your mortgage repayment remains unchanged.
Warning: You may have to pay charges if you pay off a fixed-rate loan early

Variable interest rates – there are 2 types of variable interest rates: Standard and Tracker

With a standard variable rate, the interest rate is managed by the bank and adjusted accordingly. Every bank decides their own variable rate and can increase or decrease the rate at any time, but usually only when the central bank increases or decreases the base rate.

Tracker interest rate mortgages are ‘tied’ to the European Central Banks base rate or Euribor, and are usually set at a predetermined percentage above this rate. Eg. Tracker set at 1.5% above ECB or Euribor means when the base rate changes to 2% the tracker rate will become 3.5%
Warning: The cost of your monthly repayments may increase - If you do not keep up your repayments you may lose your home

 

For more information on current rates available and the impact these rates could have on your mortgage repayments please call Mary today on 086 8113763 or email info@mortgageaid.ie