Fixed v Variable in 2011

RonanBerg

Hi
I realise that there are lots of posts covering the same topic and i apologise but i really dont have a clue!!! We have been on a fixed mortgage for the last 5 years (a rate of 3.95%) and i must say the main reason was that we liked the not having to worry factor. However today is our last payment of this mortgage. We found out the new rates and the are

variable 3.83
fixed for 3 years 4.7%
fixed for 5 years 5.2%

We are in negative equity so cant move providers so the above are all our options and unfortuantly we dont have a clause that means we can move to tracker after our fixed term is up.

Does anyone have any advice for me?? Please?? I know everyone is in the same boat and have their own worries to think about especially after tomorrow but really would appreciate any advice from anyone who can!!

Thanks a million

robd

RonanBerg wrote: »

Hi
I realise that there are lots of posts covering the same topic and i apologise but i really dont have a clue!!! We have been on a fixed mortgage for the last 5 years (a rate of 3.95%) and i must say the main reason was that we liked the not having to worry factor. However today is our last payment of this mortgage. We found out the new rates and the are

variable 3.83
fixed for 3 years 4.7%
fixed for 5 years 5.2%

We are in negative equity so cant move providers so the above are all our options and unfortuantly we dont have a clause that means we can move to tracker after our fixed term is up.

Does anyone have any advice for me?? Please?? I know everyone is in the same boat and have their own worries to think about especially after tomorrow but really would appreciate any advice from anyone who can!!

Thanks a million

General advice is that rates will certainly increase over the coming months and years in order to pay for the mess the banks in Ireland are in. 6% is likely to be an average.

So it's about whether you want to pay cheap variable rate now and expensive rate later or semi-expensive fixed rate over the next 5 years. You'll prob end up paying about the same overall as the bank looks to have factored in variable increases into its fixed rates.

Senna

Seen you fixed in 2005, you should check to see if your original offer allowed for you to go onto a tracker when your fixed rate ended.

ZYX

RonanBerg wrote: »

Hi
I realise that there are lots of posts covering the same topic and i apologise but i really dont have a clue!!! We have been on a fixed mortgage for the last 5 years (a rate of 3.95%) and i must say the main reason was that we liked the not having to worry factor. However today is our last payment of this mortgage. We found out the new rates and the are

variable 3.83
fixed for 3 years 4.7%
fixed for 5 years 5.2%

We are in negative equity so cant move providers so the above are all our options and unfortuantly we dont have a clause that means we can move to tracker after our fixed term is up.

Does anyone have any advice for me?? Please?? I know everyone is in the same boat and have their own worries to think about especially after tomorrow but really would appreciate any advice from anyone who can!!

Thanks a million

Obviously no one really knows what rates are going to average at over the next 3-5 years. However, we can say with near certainity that your variable rate will never go below its current rate of 3.83% and may well go higher even if the ECB leave rates untouched.
You can also be nearly certain that the variable rate will go up with any rises in ECB rate.

Therefore the question is, will the ECB rate, currently at 1%, average 2.37% or more over the next 5 years? The smart money says it will be higher than this.

Dermotk8q

I am looking at the variable v fixed interest.

Variable 3.3 v fixed 5.3, if i go varaible for 2 years i will be saving about 300 a month until the variable hits 5.3.

even if the variable goes to 6.3% in year 3 i would still only have 2 years at the higher, but should have saved on the lower...

am i looking at this wrong