5&10 year fixed rates

Hi All,

More a point of info: rang AIB this morning to check what changes were being made in light of last ECB cut.
I was advised that there were only changes to SVR; No reduction to 5 &10 year fixed rates.

Any opinions on this? Would you read it that they expect no more cuts and actually increases?
Or is it simply the state of our banks and to expect bettering of fixed rates is wide of the mark?
Any opinions on whether any other banks will better the 5 and 10 year rates at 3.6 & 4.25?

Thanks in advance, m.

I think they're pretty obliged to do something about their variable rates when the ECB makes a move. Purely for administrative reasons they might choose not to change their fixed rates.

In any case the 5 and 10 years rates will not necessarily move in line with the overnight rate.

I'm pretty sure longer term rates have fallen since AIB last set their 5 and 10 year fixed rate, though, so I would not be surprised to see these fall by up to 0.5% in the coming months. Then again, who really knows.

Hmmm, interesting reading. I know I'll be keeping an eye out over the next few months.

Thanks

AIB have in fact raised their 5 and 10 year fixed rate to 3.69% (from 3.60%) and 4.41% (from 4.25%) respectively presumably as they have had a lot of interest from mortgage holders to move onto these fixed rates.

Yeah I just spotted that today. Grrrrrrrr
Right, will be looking at other banks now and switching when we want to fix. Unless they all start this craic?

Does this mean it's just the interest in the product, or do they expect the cost of money to rise significantly- i.e are the pricing in a long deep recession?

DerKaiser said:

I think they're pretty obliged to do something about their variable rates when the ECB makes a move.

Click to expand...

True for trackers, but for "standard" variable AFAIK they do what they want.

It depends on what rate they can buy the money long term fixed and what percentage they will take on top of that. A lot of banks put their long term fixed rates up in January, only by 10 to 20 points but that was a result in the costs of borrowing rising and opposite to the ECB current downward trend.

When lots of people are taking about fixing (its even been on the news regularly) that normally means you missed the best time to fix. The best time to fix was around xmas when the only talk was about getting out of fixed rates and the mention of fixing was met with comments like "why would you? the rates are dropping".

I would say we have a long time of downward and level inflation across the eurozone, so it is possible that long term fixed rates will drop further, but i cant see a 10 year fixed being much lower than +/- 4.30%, so current rates wont be a bad choice.