Our mortgage interest rate options
Your AIB Mortgage Advisor can tell you exactly what our current interest rates are and how they translate into monthly repayments. Here is a brief description of the types of interest rates available:
(i) Variable interest rate
A variable interest rate can go up and/or down resulting in your monthly repayments rising and/or falling over the life of your mortgage loan.
A variable interest rate gives you more flexibility. You can make extra mortgage repayments or clear your mortgage earlier than agreed without having to pay any penalties.
You may have the option of switching to a fixed interest rate (if offered by us at that time).
Our Loan to Value (LTV) variable rate is available to owner occupier mortgage loans. We have a range of LTV variable rates depending on the amount you are borrowing relative to the value of your home.
As your loan to value may decrease over the term of your mortgage, you may be able to move between LTV rate bands
Our Standard Variable rate is available to all buy to let mortgage loans.
A variable rate mortgage loan may be repaid at any time in full, or in part, without penalty.
(ii) Fixed interest rate
While on a fixed interest rate, the interest rate and mortgage repayment remains the same for the agreed fixed interest rate period (typically 1 to 10 years). During this time the interest rate will not change.
At the end of your fixed interest rate period, you will have the option of moving to:
(a) a new fixed interest rate and period, (if offered by us at that time); or
(b) a variable interest rate, at our then prevailing rates applicable to your mortgage loan.
If you do not exercise a choice, our standard variable interest rate will apply to your mortgage loan.
(a) Repay the mortgage loan in full (including interest).
(b) Convert your fixed interest rate to an appropriate variable interest rate or another fixed interest rate (if offered by us at that time).
(c) Make a partial out-of-course repayment.
Definition of terms used in this formula:
(A) the amount of the premature payment or balance of the mortgage loan at date of conversion to another rate.
(U) Unexpired period is the period remaining to the end of the original fixed interest rate period.
(D%) Difference in interest rate is the difference between the fixed interest rate applicable at the start of the fixed interest period and the fixed interest rate applicable as at date of premature payment/conversion, for the unexpired fixed interest rate period.
A = € 100,000 the amount of the premature payment or balance converted to another rate
U = 2 years (24 months) on basis you fixed for 5 years (60 months) and are now breaking out of fixed rate after 3 years (36 months)
D = 2% on the basis you fixed at a 5 year rate of 5.25% and the fixed rate for the unexpired period (i.e. 24 months) is 3.25%.
So, applying the formula A x U x D: € 100,000 x 24/12 x 2% = € 4,000
We will also conduct a second calculation, where we will change one of the components that we use to calculate early breakage cost. The same formula (A) x (U) x (D%) = early breakage cost is used but (D) in the formula becomes: The difference between the market interest rate applicable at the start of the fixed period, and the market interest rate applicable at the time of the early repayment, for the unexpired fixed term period.
(a) The reducing balance nature of the Mortgage Loan from date of fixing to breakage date, where applicable, and
(b) The timing of the payment of the early breakage cost.
This means that the actual early breakage cost amount applicable to your Mortgage Loan may be lower than the indicative figure produced using this example.
(iii) Split interest rate
You may choose to have a portion of your mortgage loan on a fixed interest rate and the other portion on a variable interest rate. This will enable you to benefit from the advantages of each interest rate in whatever proportions you choose.
You or your legal representative can ask us to give you an idea of how your current or existing mortgage interest rate compares to any other rate we may offer at that time.