to fix or not to fix and for how long???

lilgirl24

hello all this is probably a very frequently asked question on boards but just wondering if it definitely the way forward to fix my mortgage and if so for how long???

confused:eek:

napapa

just got my fixed options today..
2 year...3.5%
3 year...3.95%
5 year...4.75%

3 year looks most appealing to me.

Davy

If they are aib rates, you wont get them tomorrow

napapa

Davy wrote: »

If they are aib rates, you wont get them tomorrow

BOI

Have until the 19th of the month to decide. From your tone, I'm guessing this is a good option?

Davy

napapa wrote: »

BOI

Have until the 19th of the month to decide. From your tone, I'm guessing this is a good option?

Im not going to say ye go fix, but they aren't the worst fixed rates around.

napapa

Davy wrote: »

Im not going to say ye go fix, but they aren't the worst fixed rates around.

not the worst if I go the 3 year fixed....i'm betting that the ECB raise interest rates more than 0.5% in the next 18 months along with at least another 0.5% increase from BOI in next year and I'll save money by fixing now.

dlambirl

My VARIABLE rate is 4.19% with Permanent TSB!:eek:

napapa

dlambirl wrote: »

My VARIABLE rate is 4.19% with Permanent TSB!:eek:

I guess that's what a normal mortgage interest rate would be looking at EU rates. Not that that makes a difference to you...

km79

hi . am coming out of a three yr fixed rate with ulster bankd on 1st september. the rate was 4.65% so missed all the cuts :mad:
variable rate at moment is 3.85%. 2 yr fixed 4.2%, 3 yr 4.3% and 5 yr 4.95%.
i had decided i would not fix again but looking at difference between variable and 2 yr fixed one hike would probably even it up. however having overpaid for last couple of years fixed i am unsure.
any advice appreciated

titular

Banks already have a very good idea what is going to happen with rates over the next few years. Inevitably, this is already priced into the fixed rates. Historical studies have shown that anyone who fixes rates for any period will always end up paying out more over the course of the mortgage than someone who has remained on the variable.

So why fix at all? Well, the reality is that for many, month to month living is more important than the total paid after 25 or 30 years. To safeguard a monthly surplus, people are willing to pay a premium to insure against possible short term rates spikes.

The real question is how much extra per month am i willing to pay to protect my monthly surplus. If it seems a good deal, consider it, if not, stay on the variable.

Regards

T

Gurgle

titular wrote: »

Banks already have a very good idea what is going to happen with rates over the next few years.

Quote of the day nomination right here.

I agree with the rest of your post 100% though, fixing will generally cost more but gives you the reassurance of knowing exactly what your repayments will be.

daveyboy_1ie

I panicked after the last increase around about May and got fixed options of (read an article that AIB planned 2 more increases this year alone, and sure enough there has been one so far):

1 yr fixed rate 3.09 %
2 yrs fixed rate 3.25%
3yrs fixed rate 3.65%
4yrs fixed rate 3.95%

It was a whole 1.25% increase at the time from our variable rate but we went to 4 years and although it hurt us getting used to the extra amount monthly it now looks as if we done well, especially with the fixed rates they offer now. Even the variable rate has gone up so the difference is now 'only' 0.80% The only consolation was because we were paying more interest we were getting more TRS back, which helped ease the payments. They sound fantastic rates in hindsight but the problem is the huge drop in household incomes, but we are not alone there. I think we were lucky tbh. Fair play to the Independent and Today FM (The Last Word) for scaring the cr*p out of me.

titular

Gurgle wrote: »

Quote of the day nomination right here.

We are one of only two countries in the Eurozone who are not experiencing sharp inflation.

We have a heap of banks with holes in their balance sheets.

The government guarantee is going to be wound down meaning the cost of funds for banks is going to increase.

All of these factors mean that interest rates are going to go up over the next few years. The banks are aware of this and it's not a secret. What is a secret, however is when they will raise their variable rates and by how much. They will have this projected now for at least the next 24 months - it may be fine tuned once the ECB turn the screw.

The may not have a clue about much else, but they definately know when they are going to take the next pound of flesh.

yammagamma

remember though as some1 just said when you fix your household income will fall and you could be waiting for a year if ever for variable rate to level out with fixed.. and dont forget you cant pay off a bit more every month or every few months if you have some spare cash which would have saved you on interest payments as well.... use karl`s mortgage calculator and play around with extra payments , if you can afford the higher fixed rates now why not stay on variable and pay the difference in extra payments,get that principal down as fast as you can..