The ‘best rate’ is a misnomer because interpretation of what is the ‘best’ is a subjective question, for a very conservative person a 10 year fixed rate is ‘the best’ and from that point the ‘best’ will likely be whatever is the cheapest ten year fixed rate, having said that, after careful consideration the best 10 year fixed rate mortgage might be one that allows you to pay off a lump sum during the fixed period without any penalty thereby ensuring that you can eat into your capital quicker, is a feature like that worth extra money each month if it isn’t the cheapest? To some people it may be, to others it isn’t.
If you are considering a property purchase and are not a cash buyer then you will need financing, and this comes at a ‘price’, the interpretation of that price is generally the rate, so which rate is better (we’ll assume you want a 1 year fixed rate), 2.5% or 2.6%? Naturally you’d be inclined to say it is the 2.5% one, but it is also important to look at the variable rate margins banks charge historically because if you go with the 2.5% option (which on a house purchase of €220,000 [mortgage of €198,000] would make a difference of a tenner a month) and then are faced with a variable rate which tends to be 100 basis points higher in institution A v.s. B then you will have chosen wrong.
And that is where research comes into play, obviously we spend our whole day contemplating the mortgage market in Ireland and we make a living on people coming to us for advice, but you can also do the research yourself and look things up on the internet or in the papers. The thing you probably won’t do is have the innate understanding of differing criteria and specific points on the mortgage offerings in the market but at the same time, you might not care, in fact, about 40% of people don’t use a broker – which we think is a shame but we are also a highly vested interest so take that with a pinch of salt.
The thing that a broker can do that you can’t do for yourself has to do with presentation of your case when dealing with a mortgage provider, I know many intelligent financial advisers in other non-mortgage fields and we have clients who are accountants and tax advisers, even some who are lecturers of finance, the fact is that a practising mortgage broker will do a better job than an inexperienced individual when presenting a mortgage, I suppose it’s the same as a carpenter hanging a door versus a first time ever DIY enthusiast, it isn’t to say the DIY person will get it wrong, they just won’t be as efficient and it may take a few attempts with lots of time being lost.
Time, or at least the understanding of the value of it is interesting, many people don’t really value time and yet it is the one resource which is totally finite for all people, that cannot be replenished, ask any person dying whether they would like more time or money and most of them would opt for time. Anyway, given that time is in fact an asset, using a mortgage broker makes sense if you are confident in their advice and trust them, if you don’t trust a broker just don’t use them, the same goes for any professional.
Anyway, we were meant to be talking about the best mortgage rates: the fact is that there isn’t any one ‘best rate’, we can help you find the best rate for your circumstance and we’ll do that gladly, just call or mail/smoke-signal/tweet etc. We are here to help.