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Fix mortgage int. rate or not?

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  • 22-08-2011 11:19pm
    #1
    ashblag
    Closed Accounts Posts: 376 ✭✭


    Mods, please feel free to move if posted in wrong place.

    I've recieved notifiation that my fixed rate is up on my mortgage next month,and my mortgage will now be given at 4.2% variable.

    Should I fix it again? Mortgage rates seem to be on the increase! I will make an appt with a branch advisor next week just looking for general thoughts.

    Also, is it worth shopping around anymore for a better rate? Do banks want to know anymore?


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    #2
    cookie1977
    Registered Users Posts: 6,794 ✭✭✭cookie1977


    This is very difficult to give you a clear answer but some of the facts:

    The US fed has stated no rate increases until 2013 (a crazy move by any central bank to say this):
    http://www.telegraph.co.uk/finance/financialcrisis/8692206/No-US-interest-rate-rise-until-2013.html

    Europe is not doing well and there's unlikely to be interest rate increases for the foreseeable future but this could change quickly.

    While the ECB is not increasing rates at this moment in time the problem is that the individual Irish banks have been increasing rates periodically outside of ECB rate rises. This creates an unknown into the mix.

    What I tell people is that if the fixed rate is good and they can afford the fixed rate repayment then maybe it's best to go with that but only on a 3yr or more fixed rate.

    If you stay variable how many rate rises of 0.25-0.5% do you think you could absorb. If many then maybe consider risking variable for the moment especially if the fixed rate on offer is very high.

    It's always worth shopping around on your own or with a broker but if you're in negative equity then not many will deal with you.

    Interest rates will eventually have to move up as there will and is inflationary pressures. The ECB rate of 1.5 is too low now but when it'll rise is anyone guess.


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