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Move to variable or fixed rate?

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  • 23-04-2013 8:54pm
    #1
    Katy Daly
    Registered Users Posts: 14 ✭


    Hello,
    We borrowed just under 200k for our mortgage three years ago next month, and we have enjoyed a fixed 3.75 rate. Our fixed rate ends next month, and i don't know what we should do then. If we go to the banks variable rate of 4.25, or repayments will increase by 45 euro for us, as the rest is paid by mortgage interest relief.
    I have a meeting next week with the bank, and I have no clue what to do. I know the ECB is rumored to be decreasing the rate by .25% next month, but will the bank (EBS) pass this onto the customers? What fixed rate would be considered attractive?
    All advice is appreciated.


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    #2
    Bullseye1
    Closed Accounts Posts: 5,731 ✭✭✭Bullseye1


    It's unlikely the banks will pass on any drop in interest rates to any of their non-tracker customers. Unfortunately those of us on fixed or variable are being hit hard as the banks are bleeding money through their trackers. What rates are they offering for 3, 5 or 10 year fixed rate?


  • Options
    #3
    Katy Daly
    Registered Users Posts: 14 ✭Katy Daly


    Hi Bullseye1
    The 3 year fixed will be 4.9%
    The 5 year fixed would be 5.4%

    I will enjoy mortgage interest relief for the next four years?

    What do you think?


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    #4
    Bullseye1
    Closed Accounts Posts: 5,731 ✭✭✭Bullseye1


    Well it looks like interest hikes are coming in for AIB (0.4%) and EBS (0.25%). Personally if you can afford it I would go with fixing for 3 or 5 years as you know exactly what you will need going forward. I would expect AIB and EBS to raise their interest rates at least once more this year and maybe again next year. They are not taking ECB rates into account for mortgage holders not on trackers. The ECB may actually reduce rates by 0.25% (great news for trackers) in the coming weeks but with both of the above banks in serious trouble people not on trackers are getting hammered.

    http://news.eircom.net/breakingnews/21122062/?view=Standard


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