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.
LatestMortgage interest rates
The European Central Bank (ECB) sets interest rates for the euro area every six weeks.
As of 26 October, the latest headline rate is 4.50%, the highest since 2000.
When the ECB rate changes your lender can increase or reduce your mortgage rate if you’re on a variable rate, but is under no obligation. Those on tracker mortgages may feel the impact of changes immediately.
If you have a fixed rate mortgage, the interest rate will stay the same until your deal ends.
How to choose a 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
- Product features
- The terms of the deal
1. Choose a type of variable rate
There are several types of variable rate mortgages and all of them work slightly differently so it’s essential to understand the difference. Not every lender offers every type, but the main ones are:
2. Pick a deal with a low initial rate
The initial rate is simply the interest rate you start with. Unlike a fixed rate mortgage, it may change if the EBC rate changes. Pick a deal that offers a low indicative APRC (Annual Percentage Rate of Charge) because the lower the rate, the less you’ll pay in interest and the lower your repayments.
The maximum LTV depends on how much mortgage you have outstanding. The lower your LTV is, the better the interest rate you’ll be offered.
What is the Indicative APRC (Annual Percentage Rate of Charge)?
Mortgage lenders are required to quote the APRC when advertising a borrowing rate.
The APRC shows you the total cost of a mortgage, including fees, over the entire loan period. Its purpose is to help you compare the true cost of borrowing.
For example, a 2 year fixed rate mortgage with an introductory rate of 1.99% and a booking fee of €999 that reverts to the lender’s standard variable rate (SVR) of 4.19% for the next 23 years ends up with an APRC of 3.7%. The rate is indicative because it’s based on a typical mortgage of €100,000 over a 20 year term.
3. Compare mortgage features
Some lenders may offer additional features like cashback or discounted rates for homeowners with a good energy rating (BER).
Cashback mortgages work by releasing funds from the money you borrow. The cash is usually paid into your bank account after you draw down your mortgage within two months of completion, although some banks may provide the money upfront.
4. Read the terms carefully
Read the terms of the deal carefully and seek advice if there is anything you’re unsure about.
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 and examine any fees and charges.
Talk to the lender or get advice from a mortgage broker if you need further clarification.
The pros and cons of variable rate mortgages
Weigh up the details and pros and cons of variable rate mortgages and fixed rate deals and compare the best deals across both. A variable rate doesn’t guarantee set payments like a fixed rate mortgage, but it does offer other advantages.
Pros
Cons
Choosing between a fixed or variable rate deal
A fixed rate deal can offer peace of mind for the duration of the term and certainty over monthly payments, but variable-rate mortgages are popular when interest rates are lower or are predicted to go down.
If flexibility is more important to you than stability, a variable rate mortgage is worth considering. You can always switch to a fixed rate deal in the future if you want to fix the interest rate and payments.
Whatever you decide, remember to factor in fees for switching your mortgage, as well as the ability to afford potential interest rate increases.
Popular questions
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 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 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.
They are no longer as new mortgage deals, 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:
- talk to an approved mortgage advisor and discuss all your options
- compare your current rate with the ECB rate
- compare mortgage rates online to see how much you’ll save
- remember once you leave your tracker, you can’t go back
Compare mortgage rates & deals
Find a range of first time buyer and home mover mortgage deals in Ireland using our comparison.