Fixed, variable or green: choosing your mortgage rate

Fixed rates

A fixed rate keeps your repayment the same for the fixed period, whatever happens to market rates. It suits a tight budget, and buyers who want certainty in the first years, when the loan is at its largest.

• Leaving a fixed rate early, to switch lender or clear a large part of the loan, can cost a break fee.
• Some lenders allow limited overpayments during a fixed period without a fee. Ask for the exact limit.
• When the period ends you move to a new fixed or variable rate, so note the date.

Variable rates

A variable rate can rise or fall when the lender decides, usually following the European Central Bank. It is more flexible: you can overpay or switch lender without a break fee.

It suits buyers who expect to overpay, sell or switch within a few years, and who could manage a higher repayment if rates went up.

Green mortgages

Most Irish lenders offer a lower rate for homes with a BER of B3 or better. The discount is often a few tenths of a percentage point, which over a fixed period can add up to thousands of euro.

New builds usually qualify. For a second-hand home, the BER on the listing tells you whether a green rate is possible, or how far an upgrade would need to go.

Comparing offers

• Compare the APRC, which includes fees, as well as the headline rate.
• Check what happens when a fixed period ends. Some lenders move existing customers to rates above what they offer new ones.
• Cashback can help with furnishing, but compare the total cost over the fixed period.
• A mortgage broker can compare several lenders for you. Ask how they are paid.

When your offer arrives, step 22 of My journey walks you through these checks.