Should you choose a fixed or variable rate mortgage?


By John Finnamore,  Head of Seaspray Mortgages……

Unfortunately, there’s no right or wrong answer to this question.


 Your personal circumstances will dictate which option is best for you and your overall attitude to risk. For example, it will depend on the stability of your financial situation, you might be  inexperienced or simply , you’re the type of person who’d rather know exactly how much they are committing to each month. In that case, the element of regular payments and certainty in a fixed rate mortgage might be the better option for you.

However, a fixed rate mortgage can still be a bit of a gamble. Some lenders are currently offering fixed rate terms up to 20 and 30 years, and although innovative,  there is, as explained, an inherent risk which needs to factored into your decision-making.  Interest rates might go lower, which means you could end up paying more interest than you would’ve, had you opted for a variable rate mortgage.

What to bear in mind when considering a fixed rate mortgage.

As explained above , the decision to choose whether to fix your mortgage rate or not,  depends on the individual’s own personal circumstances and attitude to risk. But what specifically should you consider when contemplating a fixed rate mortgage?:


  • Stability: You know exactly how much you’re going to have to pay each month.
  • Incentive rates: While your incentive period lasts, you’ll be accessing lower rates than you would if you were on your lender’s Standard Variable Rate.
  • Lock a lower rate: If you take out a fixed-rate mortgage at a time where interest rates are low, your lender won’t be able to put your rates up when interest rates rise again.


  • Early repayment charges: If you want to leave early, you’ll usually have to pay a high fee. So, if you’re planning on selling your house soon, it might not be right for you.
  • Higher rates: You may end up paying slightly higher rates than customers on some of the variable rate products, especially if interest rates drop.
  • No repayment reductions: Your repayments won’t decrease if there’s a drop in interest rates.

The mortgage base rate is currently at record lows. So, with this in mind, and provided you’re financially stable and comfortable with the risk that rates might rise, a variable rate mortgage may suit better. The main advantage of a variable rate mortgage is the possibility that you’ll end up with a low rate and a low monthly repayment. As a plus, because you’re taking on the risk that the interest rate might rise in the future, your lender will generally reward you with a lower rate, at least initially.

Of course, it’s hard to predict what will happen in the future with 100% certainty. A mortgage is a long-term commitment, and just because variable rates are low today doesn’t mean they’ll still be at these levels 10 or even 5 years down the line.

Current Mortgage Rate Landscape*  :

*Best available rates with the lenders we deal with, as at 24-06-21.(note these rates exclude Avant Money mortgage rate). Rates available will depend on various factors such as Loan to Value(LTV), if you already hold an account with the lender, etc. General lender terms & conditions will apply.

Key takeaways:
  1. Fixed rate mortgages keep your mortgage repayments predictable and stable. However, you could pay a lot more interest than you would with a variable rate mortgage.
  2. The interest rate of a fixed rate mortgage stays the same for a set period of time, after which it’ll switch to your lender’s standard variable rate .
  3. Interest rates are currently at all time lows. However, the situation might change in the future, which means there’s a risk your monthly repayment could become unaffordable.
  4. The interest rate of a variable rate mortgage can fluctuate, which affects your monthly mortgage repayment.
  5. Your choice of mortgage is a question of personal preference. Don’t just base your decision on the interest rate, but also on other factors such as fees and terms and conditions.
  6. Give due consideration to remortgaging or switching provider as a viable option, in case your circumstances change.
  7. Fixed rate mortgages also lack the flexibility you might find with other mortgages. They tend to have steep exit fees, at least during the fixed term period. This might act as a deterrent for anyone thinking of changing mortgage.

As always, an open and frank discussion with a mortgage broker , analyzing in detail your own financial circumstances  and  your preferred property and timing,  is the prudent approach. I’d be delighted to help you understand the Irish mortgage market , take a balanced look at your options and share my experience and knowledge:

tel.+353 1 7070 000     or email


Seaspray Financial Services Ltd trading as Seaspray Private and Seaspray Mortgages is regulated by the Central Bank of Ireland with registered number C165527

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