Compare variable rate mortgages
A variable rate mortgage offers you the flexibility to overpay or redeem your mortgage at any time without penalty. Compare variable rate mortgages from Ireland’s best lenders.
How to choose the best variable rate mortgage
Once you’ve found out how much you can borrow use our mortgage search to compare variable rate deals.
Here are a few things you should consider:
- Type of variable rate
- Initial rate
- Maximum loan to value (LTV)
- Minimum mortgage balance
- The terms of the deal
1. Choose a type of variable rate
There are several different types of variable rate mortgages and all of them work slightly differently so it’s important to understand the difference. Not every lender offers every type, but the main ones are:
Standard variable rate (SVR)
This is the lender’s variable rate that you usually default to at the end of a fixed or discounted period.
It’s usually the most expensive rate and isn’t specifically linked to the ECB rate. Lenders often change their SVR when the ECB rate goes up or down, but they can change it whenever they wish.
Discounted variable rate
This is a variable rate that’s lower than the standard variable rate (SVR) and runs for a set term, usually a year. At the end of the discounted period, the rate will revert to the SVR, or you can switch to a fixed rate mortgage.
Capped variable rate
This is a variable rate that can’t go above the rate it’s capped at during the term, even if the European Central Bank (ECB) rate goes up. It offers some peace of mind and the ability to budget as you can work out what your maximum monthly repayments will be.
2. Pick an initial rate
With a variable rate mortgage, the initial rate is simply the rate you start off with.
Unlike a fixed rate mortgage, it can change at any time. Pick a deal that offers a low initial rate because the lower the rate the less you’ll pay in interest and the lower your repayments will be.
3. Check the maximum loan to value (LTV)
The lower your LTV is, the better the interest rate you’ll be offered.
Some products may require a low maximum LTV e.g. 50%, so if your LTV is higher, you won’t qualify for the offer.
4. Check the minimum mortgage balance
Make sure you don’t owe less than the minimum amount accepted.
If you’ve already paid off a chunk of your mortgage, or you only started out with a small mortgage, you need to double-check the minimum mortgage balance accepted. For example, if it’s set at €50,000 and your remaining balance is €45,000, you won’t be eligible to apply.
5. Check the terms of the deal
Read the terms carefully to prepare as much as possible.
If there’s a discount period, check how long this will last, or if the rate is capped, work out what your maximum repayment could be. You may also wish to compare any fees and charges, as well as the typical APRC (Annual Percentage Rate of Charge).
Tracker Mortgage Rates
A tracker is a type of variable rate mortgage that tracks the European Central Bank (ECB) rate, at a set percentage above or below.
This means that the rate automatically changes when the ECB rate changes, unlike with other variable rate mortgages that aren’t directly linked to the ECB.
They aren’t available as new products, but if you already have one, some lenders offer a follow-on tracker mortgage if you’re moving home.
For example, if you have a Bank of Ireland tracker mortgage, they offer a Tracker for Movers, that will continue to track the ECB rate.
If you’re considering switching your tracker mortgage:
Decide if a variable rate mortgage is right for you
Weigh up the details and pros and cons of a variable rate mortgage.
A variable rate doesn’t guarantee set payments like a fixed rate mortgage, but it does offer a lot of flexibility and you can do any of the following, penalty-free:
Overpaying your mortgage can reduce the interest you pay overall, and reduce your mortgage term.
Choosing a fixed or variable rate mortgage
Compare the best deals across fixed terms and variable rates.
Variable rate mortgages can be popular when interest rates are lower, but fixed interest rates can be a secure option for many homeowners.
If flexibility is more important to you than stability, a variable rate mortgage is an option worth considering. You can always switch to a fixed rate deal in the future if you want to fix the interest rate and payments.
Remember to factor in fees for switching your mortgage, as well as the ability to afford potential interest rate increases.
Variable rate mortgage FAQs
Can I overpay my mortgage?
Yes. With a variable rate mortgage, you can overpay as much as you like, whenever you like, without penalty. Here’s more on overpaying your mortgage.
What is a tracker mortgage?
A tracker is a type of variable rate mortgage that tracks the European Central Bank (ECB) rate, at a set percentage above or below.
This means that the rate automatically changes when the ECB rate changes, unlike with other variable rate mortgages that aren’t directly linked to the ECB.
Trackers aren’t available anymore because lenders lost too much profit when the ECB rate dropped to 0%. If you already have a tracker, you may be able to keep hold of it, even if you move home.
For example, if you have a Bank of Ireland tracker mortgage, they offer a Tracker for Movers product, that will continue to track the ECB rate.
When can I switch to another mortgage deal?
With a variable rate mortgage you’re free to switch whenever you like.
You’ll need to meet the lending criteria in order to switch, and if you switch lenders too, you’ll have to go through the mortgage application process in full.
When will my variable interest rate change?
Lenders usually increase or lower their rates in line with the ECB rate but not always. They may choose to change their standard variable rate whenever they like.
What is the current variable mortgage rate in Ireland?
Variable mortgage rates fluctuate by lender and can change over time. Use our mortgage comparison tool to see the best variable rate mortgages from Ireland’s top lenders.
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