Interest Rates

Chrissy

sorry if this is a really stupid question but:

Interest rates went up a few months ago. What percentage was that?

I hear people talking about them going up possibly twice more this year.

Is that true & does anyone know the estimated percentage they are to go up?

& lastly, does anyone know when these increases are due to happen?

Thanks.

LegacyUser

they've gone up twice, at .25% incriments.

so they've gone up .5%

they're expected to go up another 2 times, at .25% each time.

i've heard somthime this month, and then around september.

but who knows, could go up more, could go up less.

godtabh

stp wrote:

they've gone up twice, at .25% incriments.

so they've gone up .5%

they're expected to go up another 2 times, at .25% each time.

i've heard somthime this month, and then around september.

but who knows, could go up more, could go up less.

How does that realate to cost per thousand (in general terms)?

kluivert

Ok totally out of the wind here but look at the UK rates at the moment ok and expect that in the future ie 5 yrs > to improve the strenght of the Euro currency.

Lex Luthor

kearnsr wrote:

How does that realate to cost per thousand (in general terms)?

depends on how long your mrtgage term is....

I'm hearing we will probably see 3 increases of 0.25% over the next 18 months.

Noelie

stp wrote:

i've heard somthime this month, and then around september.

but who knows, could go up more, could go up less.

Didn't they only go up a month ago? and they usually go up in three month intervals.

I'm under the impression ( From a friend in the bank) that they will go up again in the summer and once more in the autumn. Analysts think they are going to go about 3-4 times in a row so that could be a 1% increase

godtabh

Lex Luthor wrote:

depends on how long your mrtgage term is....

I'm hearing we will probably see 3 increases of 0.25% over the next 18 months.

A 20 year mortgage.

I was looking in yesterdays times property section and it was saying the cost per thousand was 6.055 even though the APR was something like 4% (cant remember the exact figure). Just didnt seem right to me

Bluehair

ECB rate today is 2.5%, based on that plus 1.1% to get a rate of 3.6% average from the banks you'd be paying (before mortgage relief) on a 35 year mortgage;

€200k mortgage = €838pm
€300k mortgage = €1257pm
€400k mortgage = €1676pm

if rates go up another .25% then

€200k mortgage = €867pm
€300k mortgage = €1301pm
€400k mortgage = €1735pm

and a further .25% then

€200k mortgage = €898pm
€300k mortgage = €1346pm
€400k mortgage = €1795pm

and a very likely further .25% (at least by this time next year) then

€200k mortgage = €928pm
€300k mortgage = €1392pm
€400k mortgage = €1856pm

The above is conservative since some of you might be paying slight less than 1.1% above base rate (especially on a low ltv) but most of you are probably set for higher.

Basically though if you've a roughly €200k mortgage you're looking at an extra €90-€100 per month at least by this time next year. If its €300k then it'll be around €135 extra per month and those with a €400k mortgage will be paying an extra €180 or so per month.

Bear in mind that's conservative since by all accounts rates could go higher still.

Actually a handy way to work it out is whatever your mortage is today multiply it by 1.11 (i.e. an extra 11%) and that should roughly equate to a .75% increase in the ecb base rate. Very likely by the end of the year.

whizzbang

The chief economist in IIB bank suggested that May would be the next rate hike. Nobody knows for sure as they judeg it each time the ECB rates people meet up.

The_Conductor

Yes, I posted Austin Hughes' bulletin here last week.
Keep in mind that *apart from* mortgage repayment levels in Ireland, that as the economy with the highest inflation levels, we really could do with higher interest rates (and could have done with them 2-3 years ago).

Concensus at the moment is we will be looking at possible ECB rates of about 4% by December 2007 (that is a 1.5% increase between now and then).

The ECB does not necessarily increase (or decrease) rates in particular intervals- they are an independent central bank and guard that independence from politicians ferociously. They do not subscribe to the inflation mantra of the Bank of England- they are more likely to have sustainable growth levels in mind.

Of interest from a rates perspective- wage demands in France and a VAT increase in Germany. These (and not Irish or Dutch/Portuguese house prices) are events far more likely to impact on interest rates.

Providing people did not blatantly lie on their mortgage applications, and stress testing was carried out by the lenders (both pretty big assumptions) most people should be ok. My mortgage is stress tested up to a repayment rate of 5.5%- it would hurt like hell at those levels, but I could just about do it (my social life would be non-existant, but I'd have a roof over my head).

The big problem is the love affair that us Irish appear to have for floating rates- it was a wonderful way to get our hands on cheap money when the rates were low, but they are on an upward tragectory now. Our continental cousins are both bemused and helped by the fact that almost without exception they hold fixed rate products.

Is it any wonder that the Irish banks make so much money?