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Mortgage Term Question

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  • 30-07-2019 1:45pm
    #1
    RitaPoon
    Registered Users Posts: 24 ✭


    Hi Folks,

    Looking to get some advice on how long I should fix my mortgage rate for.

    I'm currently in the process of switching mortgages and it is all approved in principle where they are offering me either 2.8% fixed for 3 years or 2.9% fixed for 5 years.

    My question is - what's the better option here given the likelihood of a downturn/recession in the next couple of years. Am I best taking the longer option to protect against any increases in fixed/variable rates should a recession hit or is it the opposite case that rates would actually go down to stimulate the economy and I should fix for a shorter term length to take advantage if this was the case?

    Thanks

    RP


Comments

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    #2
    antix80
    Registered Users Posts: 2,419 ✭✭✭antix80


    If you're expecting a downturn, go with 2.9% fixed for 5 years.

    Even if the ECB cut interest rates (to negative) your bank will still hike interest rates reflecting risk/uncertainty/their reserves/profit for shareholders/they'll get away with it.


  • Options
    #3
    Bandana boy
    Registered Users Posts: 4,327 ✭✭✭Bandana boy


    depends on how tight to your collar the payment will be.

    I fixed for three years two years ago because I fancied I would have a lump sum to pay off and with market still increasing might be able to get a better loan to value calculation.

    if I was buying today with market stabilising and Brexit worries I would probably fix for the 5 years .
    they are both very decent rates , so i dont see the 2.8% falling substantially in the interim but a significant raise is not unfeasible


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