# new rate increase rumours- is it time to fix?



## Hoolers (6 Jul 2006)

We've all been been fairly clued in as to the potential for rate increases before year end (likely two more; 0.25% each). Or at least, so I thought. Heard an economist reporting on Newstalk this morning and he indicated that as far as he could gather from ECB "indications" (whatever they are)  we shouldn't rule out the potential for a total of a 1.5% increase over the next 18 months. When will it end?!?!? 

Was prepared to ride out the next two 0.25% hikes but now with threats of more in the offing am wondering if I should just bite the bullet and fix my mortgage interest rate, even for a year or two. Am currently on tracker and once I switch from this I can't go back but am also worried that by sticking with it I may end up paying more in the long run. Also have an investment property on a variable rate. 

All thoughts on this subject welcome.

Thanks.


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## room305 (6 Jul 2006)

Well the banks will have done a lot of research into this so a fixed rate mortgage will have factored in this risk. So over the course of the two years you will probably pay approximately the same as you would with a variable mortgage.

However, if things are tight, the peace of mind from having rates fixed could be welcome. You could also look at IIB's capped tracker mortgage. This way you have a tracker mortgage but your maximum repayment rate is limited to 4.99% APR. 

Btw, I have no affiliation with IIB I just thought it was an interesting product.

As for when it will end? Who knows? If I was betting I would say the top of the cycle will be around 4.5% ECB base rate. However, nobody knows for sure and many would say it will end earlier than that. I guess it depends on inflation data.


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## CCOVICH (6 Jul 2006)

Search AAM for 'fixed rates' 'when to fix' 'fixed vs. variable' etc.

Loads of discussion.


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## Hoolers (6 Jul 2006)

CCOVICH said:
			
		

> Search AAM for 'fixed rates' 'when to fix' 'fixed vs. variable' etc.
> 
> Loads of discussion.


 
thanks. will do that. had a quick look at the thread titles on a few forums here but didn't notice there was a search facility for the whole website.

apologies for posting a topic that has been discussed before.

thanks.


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