With the launch of fixed rate mortgages of 15 years + in the last few months, there are some great options for buyers and switchers. Read on to get the best fixed rate mortgage Ireland 2021 and see which type is right for you.
We’ve previously explained why fixed rate mortgages beat variable hands down in Ireland due to some particular quirks in the Irish mortgage market. With fixed rates offering savings of over €20,000 for most people buying after 2008.
Now, with the recent launch of 15-30 year fixed rates by Finance Ireland and Avant Money there are two different flavours of fixed rate.
- Short term fixed ‘teaser’ rates – Very low fixed initial payments then variable
- Long term fixed ‘lifetime’ rates – Low fixed payments for whole term
So which is best for you and which mortgage product should you choose?
We have crunched the numbers and looked at all the pros and cons across all the current fixed rate mortgage providers in Ireland.
If you want the lowest repayments now, are comfortable with your repayments going up at the end of your fixed period and think you may switch mortgage in future, we would recommend the Avant Money 5 year fixed with an APRC (Average Percentage Rate Charge) of 2.36% @ 60% Loan to Value (LTV). This is half the current Standard Variable Rate (SVR). You can check out the best rates for you across all providers here.
If you aren’t planning to switch again for better deals in future or are stretching yourself to the limit with your repayments, you should go for the Avant Money 15 year One mortgage with an APRC of 2.29% @ 60% LTV. You can check out the best rates for your LTV and sort by initial or long term repayments here.
To get under the hood of why these are the best fixed rate mortgage Ireland 2021 deals read on.
- Short term versus long term fixed rate mortgage – Best fixed rate mortgage Ireland 2021
- Best short term fixed rate mortgage – Best fixed rate mortgage Ireland 2021
- Best long term fixed rate mortgage – Best fixed rate mortgage Ireland 2021
- In a nutshell – Best fixed rate mortgage Ireland 2021
Short term v long term fixed rate mortgage – Best fixed rate mortgage Ireland 2021
Which type of fixed rate is best for you boils down to how much risk you are comfortable with.
With a long term fixed rate you effectively insure your repayments. This ‘insurance’ guarantees your repayments can’t rise in the fixed period for 15-30 years, which you can match to your whole mortgage term.
- At an interest rate of 2.65% your monthly repayment = €1,009 for a €220,000 mortgage over 25 years.
- At 7% this goes to €1,555, €546 more a month.
It’s not crazy to think rates might get to 7% at some point in the future, in 1993 mortgage rates peaked at 14%. This is a hefty hole in anyones pocket that by fixing long term you are avoiding the risk of completely.
That said, like any insurance policy you will pay a premium, for example the initial rate of Avant Money’s 25 year product is 0.7% higher than for their 5 year product. On the same mortgage that would mean paying €99 more a month in the first 5 years on the 25 year fixed product versus the 5 year fixed.
As well as the higher costs of going long term, you obviously run the risk of missing out if rates fall. If anyone says they know which way rates will go in future they are either lying to you or themselves, but most pundits think rates are set to head up rather than down right now.
The last thing to bear in mind is fixing for longer means less flexibility, If you want to pay your mortgage down to switch, reduce the term or if your personal circumstances change there may be caps and penalties that restrict your options.
That’s why we recommend the best fixed rate mortgage Ireland 2021 as Avant Money’s 15 year fixed product. To get the best rate yet still keep your options open later in life.
Best short term fixed rate mortgage – Best fixed rate mortgage Ireland 2021
|ICS Mortgages||2.38%||3yr fixed||<60%||High|
|Avant Money||2.39%||4yr fixed||<60%||Medium|
|Avant Money||2.43%||3yr fixed||<60%||Medium|
If you’re looking for the lowest repayments look no further than the ICS’s 3 year fixed rate it has the lowest introductory rate at 1.95% for the first three years, with a market leading APRC over the lifetime of the mortgage of 2.38%.
As a new entrant ICS have a lower cost base than most of the other lenders, which allows them to offer more attractive deals.
None of our top 3 short term fixed rate recommendations offer cash back as those products are much less competitive. You can find out more about cash back and switching costs here.
The leading score on rate plus a flexible lending policy, makes the ICS Mortgage’s 3 year fixed product the best mortgage rate choice for the short term.
Best long term fixed rate mortgage – Best fixed rate mortgage Ireland 2021
|Avant Money||2.29%||15yr fixed||<60%||Medium|
|Avant Money||2.45%||20yr fixed||<60%||Medium|
|Finance Ireland||2.60%||20yr fixed||<60%||High|
If you are prepared to pay a little more for absolute certainty about your repayments then the Avant Money 15 year fixed rate is your only man. If you need a little longer Avant Money even have a 30 year option at 2.85% for LTV’s less than 60%. All the rates for all the LTV’s are here.
With an eye to addressing customer concerns about being tied in both Avant Money and Finance Ireland, have made their fixed rate options pretty flexible. They both allow overpayments of 10% per year if you find yourself flush and they both have capped the penalty fee for breaking out of your rate.
Avant to less than 2% of the value of the mortgage and Finance Ireland to less than 5%.
If you move home both providers will waive the redemption fee as long as you keep your mortgage with them. One difference though is that Avant Money will reset the rates on all of the new mortgage when you move, while Finance Ireland will let you keep the original rates on the outstanding mortgage.
The final difference is that if your loan to value improves during the fixed rate period Finance Ireland will automatically move you to a lower rate. If house prices continue to rise this could be significant, as their 20 year 2.99% @ 90% LTV could fall to a 2.65% @ 60% LTV.
That said Avant Money’s 20 year 90% LTV is already cheaper at 2.75% and if you are the type of person who is going to gamble on house prices, your probably not looking for a fixed rate in the first place.
The leading score on rate, whilst not dropping many points on the basis of flexibility, makes the Avant Money 15 year fixed product the best mortgage rate choice if you still want a great value mortgage, but want to guard against rate increases in future.
In a nutshell – Best fixed rate mortgage Ireland 2021
So there you have it, two great options to suit your needs. Both of these products will save thousands versus the standard rate products at 4.2% APRC that most people buying after 2008 are on.
- The 3 year ICS Mortgages fixed rate gives you the best saving straight into your hand and will still outperform legacy rates into the future. Plus gives you absolutely flexibility once you are out of your 3 year fixed period.
- The 15 year Avant Money fixed rate still gives you great savings over legacy rates with absolute certainty about your repayments for 15 years.
Ultimately the one you choose will depend on the trade off you make between possible rate rises in the future against the best savings into your hand today. On balance for most people we would plump for the Avant Money 15 year fixed due to it’s outstanding value, but it’s a case of different strokes. You can book a free, no obligation consultation with one of our mortgage sherpas here to get a personalised recommendation.
Next steps – Best fixed rate mortgage Ireland 2021
If you want to see all best rates available and what they mean for your monthly repayments, you can use our calculator here.
If you want to know more about switching costs and cash back you can see our article here.
If you want all your mortgage questions answered you can check out our ultimate mortgage Q&A here.
If you want to know more about mortgage rates in general and how to compare check out CCPC.