A mortgage is one of life’s biggest financial commitments. Mortgage options can be complex, but the most fundamental choice is between a fixed or a variable rate.
With a variable rate mortgage, repayment costs can rise or fall over the term of the mortgage in line with changes in the base rate set by the European Central Bank (ECB) or in your lender’s charging policy. You can pay extra off your mortgage, extend your mortgage term or top up your mortgage without incurring penalties.
A fixed rate mortgage guarantees your repayment level for the duration of the fixed rate term. Fixed rates are typically priced somewhat higher than the current standard variable rate. During the fixed rate period, you will face penalties if you want to switch lenders, move to a variable rate, re-mortgage or pay off all or part of your mortgage. At the end of a fixed rate term, mortgages are usually switched back to the standard variable rate or you may be given the option of another fixed rate.
Central Bank rules apply proportionate limits for loan to value and loan to income measurements and are as follows: ~Loan to Income Limits, which places a limit on the amount you can borrow of 3.5 times your gross income (before tax) or for joint mortgages 3.5 times your combined gross income (before tax). This loan income limit applies to - all new lending for principal-dwelling homes, including borrowers in negative equity applying for a mortgage on a new property This loan income limit does not apply if - you are switching mortgage - you want to restructure your mortgage repayments because you are in arrears or think you may go into arrears ~Loan to Value Limits, which also places a limit on the amount you can borrow depending on the different categories of buyers. - If you are a first time buyer you can borrow 90% of a property’s value up to a limit of €220,000 and 80% of any amount above this limit. For example if you would like to buy a house worth €250,000, your lender will lend you €222,000.This figure is made up of 90 per cent of €220,000 plus 80 per cent of €30,000 (the excess over the threshold amount of €220,000).You will have to fund the remaining €28,000 yourself. - If you are a non first time buyer you are subject to an 80% Loan to Value limit. These loan to value limits do not apply if: - you are in negative equity and want to take out a mortgage for a new property; -you are switching mortgage; - you want to restructure your mortgage repayments because you are in arrears or think you may go into arrears. For more information on these rules, please see our mortgages section or the Central Bank website.
Our mortgage cost comparisons allow you to compare both variable and fixed rate mortgages options and see your likely repayment amounts under each type.
There is no right or wrong option when selecting between a variable or a fixed rate mortgage. The right choice is the mortgage best suited to your needs and circumstances, and these may change over time. The interest rate figures shown will allow you to compare similar mortgages from different providers. A mortgage with a high interest rate will cost more than a mortgage with a low interest rate.
Please note that all figures contained in the mortgage cost comparisons are indicative estimates only. They do not take individual circumstances into account and you should always contact the mortgage provider directly for exact repayment details before making a decision.
Please also note that the monthly repayment figures do not include mortgage interest relief.