When you’re ready to get a mortgage, you’ll have the choice of a variable or fixed rate deal. Forget the first one for now, as we explain everything you need to know about fixed rate mortgages.

Very simply, it’s a mortgage where you pay back the same amount each month for a set period – be it 2, 3, 5 or 10 years. Fixed rate deals are popular because when you know exactly how much your mortgage will cost each month, you can work it into your budget. There is a downside to fixed rates, though. If you’re on a variable rate deal and things (interest rates) go in your favour, your monthly repayments can go down. However, you won’t benefit from falling interest rates if you’re on a fixed rate deal because your monthly repayments are fixed. The obvious upside is that if interest rates shoot up, you won’t be affected either – which means your monthly repayments will stay the same until your fix ends.

However long your fixed deal lasts, here’s what happens when it ends:

You’ll be moved automatically onto your lenders bog-standard mortgage rate. This is called a Standard Variable Rate (SVR) and tends to be expensive. The way to avoid this is to re-mortgage onto a more competitive deal before you slip onto the SVR.

Yes – some fixed rate deals come with a penalty if you choose to leave before the end of the 2, 3, 5 or 10 years.

They’re called Early Repayment Charges (ERCs) and can be expensive.

This doesn’t mean you can’t get out of your deal, or that you should completely avoid deals with ERCs – you just need to weigh up the cost of the charges against the savings you’d make by leaving. If it costs you more in charges to leave than you’d save on a different deal, you might be best off staying put. Don’t worry if you can’t decide which is best for you. The team at Humdinger can help you choose. All you need to do is book an appointment for a chat.

With a variable rate mortgage, your monthly payment can go up or down depending on the terms of the mortgage. There are three main types of variable rate mortgages – discount rate mortgages, standard variable rate set by your lender and the currently unavailable Tracker mortgages.

• Your monthly payments can vary, depending on the base rate it is tracking.
• This differs from a fixed rate mortgage, where you know exactly what you will be paying each month.
• While it might have a rate lower than a fixed rate to start with, it could go up if interest rates rise.
• Usually, you can switch to a fixed rate without paying an early payment charge.

Standard variable rate mortgages

This is the basic interest rate the lender uses, and will vary depending on who your mortgage is with. If you’re on an introductory fixed, discount or tracker mortgage rate, your mortgage will usually move on to the lender’s standard variable rate – which is invariably at a higher rate – when the term ends. However, there’s no easy way of knowing when the lender will choose to increase it.

Discounted variable rate mortgage

These rates are a percentage discount of the bank or building society’s standard variable rate (SVR) for a specific period of time, usually two or three years but sometimes longer – for example: Lender’s SVR is 3.5% – discount is 1% – Your first payment is 2.5%. They can change at any time at the lender’s discretion, as they are linked to their SVR. The rates can be low to start with but may well go up – and there’s no guarantee they will fall when interest rates do.

Note on Tracker rate mortgages

These mortgage rates are a fixed percentage above the European Central Bank’s base rate. They generally ‘track’ it for the lifetime of the mortgage. Trackers unfortunately haven’t been seen since the dying days of the Celtic Tiger. They are superb value and anyone with a Tracker should tread very carefully before deciding to give it up!

The type of mortgage you choose will make a difference to the amount that you repay every month, so you need to think it through carefully.

Basic affordability

In it’s simplest terms, what you can borrow takes into account…

Loan to Value (LTV)

The value of the property you are buying/re-mortgaging versus how much deposit you have/the current mortgage balance.

Loan to Income (LTI)

How much you earn versus the loan amount requested. If you’re after a basic view of what you can borrow, check out our mortgage calculator below.
Mortgage Calculator

Detailed affordability

If you dig a little deeper, it can be a bit more complex than that and can be affected by things such as:

• Credit history
• Monthly expenditure (incl credit commitments)
• Disposable income (how much money you have left at the end of each month after general commitments likes bills, shopping, etc)
• The type of property and where it is
• How much rent you’ll get each month if it’s a let
• And so on

Every case is unique which is what makes Humdinger so special.

We run your case through our assessment tool to identify the key factors which will affect what you can afford and are eligible to do.

If it’s all good, you get your own personal Mortgage Expert to give it the once over. We’ll give you the confidence you need to proceed and a personalised mortgage recommendation that works just for you.
Then, when you’re ready to apply for your mortgage, you get your own dedicated Application Manager to see it through from start to finish.

Jump into our fact find to find out if you’re eligible and see what your mortgage options are. Or if you’ve already done it and got your options, connect with your expert at a time and date which suits you.

Humdinger are a mortgage broker who compare lenders across the market to find the best deal for you

Here are the lenders we currently compare:

• Bank of Ireland
• Dilosk t/a ICS Mortgages
• Haven Mortgages (AIB)
• Finance Ireland
• Permanent TSB

You can upload documents on Humdinger’s secure upload portal here:

https://apply.humdingermortgages.ie/login 

Please note: You’ll need to be logged in to your account and go direct to the page using the link above – don’t worry, you will be prompted to log in if you aren’t already logged in.

What do you need?

Most of the time you will need to upload:

• Proof of identity (usually a passport or driving license)
• Proof of employment / income (a recent payslip or SA302 if you’re self employed)
• A recent bank statement

It’s ok to upload photos from your phone, just make sure everything is in focus and the document is pictured in full.

Of course, your documents will be uploaded and stored securely.

We may ask you to send higher resolution copies when submitting your application.

If you already have an application with Humdinger we’d ask in the first instance, please contact us via live chat – this is the quickest way to get in touch with us.

You can email us via hello@humdingermortgages.ie, chat to us on Facebook follow us on Instagram or write to us at: Humdinger Mortgages, 103 Francis St, Dublin 8 D08 Y70F

For media enquiries, please contact hello@humdingermortgages.ie 

Finally, our phone number is 01 255 7981

These fees never affect our advice. Our reputation and livelihood depend on us always giving our customers the best possible advice.

The important bit is: we’ll never charge you a penny.

The Central Bank of Ireland exists to make sure financial markets work well and give customers a fair deal.