Going from Fixed to Variable Rate (mortgage)

Hi, does anyone have an experience moving from fixed rate to variable rate mortgage with the same provider?

I am a FTB and choosing from my loan options (1. start with fixed rate (12 months) → 2. move to variable afterwards):

AIB has a competitive rate 3.5% fixed for 12 months for new customers, after when I would want to switch to variable to pay off lump sums after I accumulate some savings.

Are there any difficulties, restrictions to moving from fixed to variable rate after 1 year? Or is there anything else I should be aware of with regard to this?

Many thanks.

We moved from variable to fixed and back again many years ago. It was pretty painless in both directions. The only danger about a ‘teaser’ rate is that you may find yourself locked into the same provider after the teaser period is over as part of the ‘teaser’ agreement. In our case we were able to use our reversion back to variable as a bargaining point as our LTV had come down considerably.

As you mention paying off lump sums the other thing that I did not know about fixed rates at the time that I did it was that you can divide your mortgage into a fixed part and a variable part. Say you have a 200k mortgage - you know you won’t be able to pay off more than 50k over the next 5 years so you fix the 150k and leave the 50k variable so that you can pay off some should the opportunity arise.

Thank you metalmike.

The other thing to be concious of is how much extra you are paying for the luxury of going fixed for 12 months.

How much are you being protected, ie if rates double in that time, or half way through, how much would you actually save. Since doubling is not likely in that time frame, and more likely is keeping of the status quo, then you are might be paying too much.

Just a thought, best of luck