Variable now but when would be the right time to go Fixed

BigPineapple

I'm interested to hear what would people do in my situation.

About 110K left on the mortgage. 45K fixed for 3 years (2 years left) at 2.35% and 55K variable on the remaining at 2.75%. I do overpay every month on the variable by quite a bit even though the interest rate is higher. With the news of inflations and everything else. Looks like interest rate rise will be the cards very soon, much sooner than I anticipated.

I have very little experience with general market rate change since the last few years have been going nicely without any the rate change. My thought process is if and when the ECB announce interest rate rise, I would switch the variable rate to fixed rate straight away for the variable portion. Lets face it, we don't really know how far the increase will go right? Certainly make sense to fix it then

So I do wonder if it is too late by then to make the change? and how quickly does bank change the interest rate once ECB make an announcement?

JTMan

The first step is to ask your bank what their break fee is.

If the break fee is low, then consider switching now. Fixed rates might increase before the ECB rate increase.

Avant Money (via "Gold Brokers" such as Doddle.ie) offer 1.95% and 1,500 EUR cashback but only if you borrow at least 100k and get approval in principal before 31 March 2022.

Jim2007

On top of everything else I would be very much surprised if you could still get the old rate once the knew is announced.

Danzy

Interest rates will go up, the only query is how many times.

As soon as the ECB announce, it's too late.

Why not fix it now, it's as low and insanely low as interest rates will be.

BigPineapple

https://www.boards.ie/discussion/comment/118625628#Comment_118625628

I'm happy enough with my fixed portion as it is with two years to run. Could potentially break and re-sign to the 5 years Green mortgage which would give better rate at 2.10%. Will give them a call tomorrow and see.

I would like to switch the but I'm on the AIB split mortgage, I don't think I can move only the Variable portion to other lender while keeping the Fixed portion with them.

I wonder if anyone has done it?

BigPineapple

https://www.boards.ie/discussion/comment/118625863#Comment_118625863

That is what I'm afraid of, I think I need to get in gear and fix it in the next two weeks or so to ensure I get locked in before the Variable rise out of hand, although it would throw my plan to overpay out of kilter.

I supposed I could save those money up for the next few years and pay off in one lump sum when the fixed ends, not the end of the world, just a bit more interest than I had anticipated initially

BigPineapple

https://www.boards.ie/discussion/comment/118625874#Comment_118625874

Yes, that is my worry, hard to predict how often and how much since there is no limit to variable.