Should I fix my tracker mortgage

I don't think anyone can really answer that but I will say one thing.

Interest rates are being raised in order to curb inflation. Inflation has mainly gone mad because energy prices have gone mad. I just cannot see how raising interest rates will have any effect on energy prices.

I've a feeling the whole thing won't settle down until the war in Ukraine ends.

Nobody can say with any certainty but the whole tracker thing is in Irish psyches now because of the crash.

Realistically if you just look at it objectively and say what's my current rate, what's on offer to fix and what am I able to absorb if you factor in another rate rise or two. Then just make your decision based off that like you would anything.

Forget about the past and the 'omg you've got a tracker, you lucky duck' mentality. Just work with the facts of today.

Rising energy costs aren't the main reason for inflation, it's one of many but it certainly is not the main. Inflation was always going to happen after Covid-19 and lockdown. Governments can't take loans of billions and billions and pump in into the economy without any effect. The estimated cost of this is estimated to be at least €37bn for 2020 & 2021.

It's a simple principle of economics that when people have more money, it leads to an increase in demand which leads to higher prices. People's savings had risen massively during Covid as they weren't able to spend it during lockdown, once the lockdowns were finished it was inevitable that the economy would get over stimulated as demand for goods and services became very high. This is called demand-pull inflation.

But you also had cost-push inflation across the economy. The housing sector had to deal with a shortage of construction materials, which increased construction costs and these increases have been passed onto the consumer with increased housing costs. Shortage of construction workers, you guessed, lead to an increase in wages and thus an increase in house prices.

And obviously you had to Ukraine war, which limited the supply of many goods, not just gas, which has lead to an increase in their prices as supply was lower.

And once again the Government is getting funding, taking loans out, now to provide support and accommodation to refugees, over 25% of all hotel rooms in the country are being paid by the government. Obviously this has lead to an increase in hotel room prices but there's the knock on effect too, billions is being added to the economy without an increase in production capacity which only leads to inflation.

Now we're also seeing build in-inflation. Workers are expecting pay increases to cover the cost of inflation, which will in turn lead to increased costs of goods and services in the economy. This can be a vicious cycle of increased costs leading to an increase in wages which leads to increased costs and so on.

So mortgage interest rate increases are being implemented to reduce the amount of money being introduced to the economy while also resulting in negative consumer sentiment so there'll be reduced spending.

It won't.

Banks will be under pressure to start paying interest on deposits and once that starts they will be back to their normal 2-2.5% margins over ECB.

The risk is the 13 or so years in the future where you don't have a tracker and subject to the bank's rates then.

If op only had 10 years left, that would lead to different advice as only the final 3 years (and small balance) would be subject to the bank's rate policy after the fixed term

Unless you're overpaying it I'd be comparing fixed rates with another 1% onto the current rate. Whichever is cheaper is your answer.

If you're overpaying then theres a little more to workout

Interesting thread. Interested on opinions on my situation.

€150,000 outstanding

2.25% tracker

15 years left. Any thoughts? I'm leaning to breaking to a 10 year fixed.

Your tracker is worthless if it's 2.25% above ECB which would mean 4.25% rate from next month.

If it is 2.25% fix immediately and go for as long as possible for any rate of 3% or lower

Was in a similar situation, 17 years left on tracker ended up fixing it for 5 years at 2.35%. I plan to wipe most of the mortgage when the 5 years fixed rate is up. Good advice on this thread

https://www.askaboutmoney.com/threads/i-have-an-ulster-bank-tracker-%E2%80%93-should-i-consider-fixing.228533/

0.75% - leave it as it is.

In the UK they now expect inflation to be under 2% by early 2024 (BOE statement today) and the market is pricing in rate reductions at that time.

BTW, if you are KBC, they won't give you the 2.95% - they give you 4% but allow you back on the tracker.