AIB 10 Year Fixed Mortatage 4.25%

[markwfitz]

this is a tough one, 10 yr rate at 4.25%. If it was 3.95% it probably is a slam dunk if you are concerned about the effect of higher interest rates. It does depend on the lenght of this recession. If rates start going up the recession will be lifting so people should be better off & able to pay the higher rates,
but 4.25% is quite a low rate.
The way I look at these in simple terms is 4.25% -2.45% = 1.8%. So you are willing to pay 1.8% extra at the moment. Lets say the recession stays for 3 years & rates stay, you have paid 5.4% extra. They they shoot up to ECB 4% [normal] You are on 4.95% so you are saving 70bps. You have to have 7 years at this to basically break even ..
Paying 4.25% is a real short term recession punt, personally & I work in Hedge funds, I would not do 4.25% 10yr unless I really needed the security.
3.75% - hmm not that would be interesting

 

[Senna]

its also very possible that the ecb rate could go up to 5-6%, 4% is what the ecb will aim for to level inflation, but it is by no means a top level.

 

[Bronte]

You are correct to realise that rates can go up as well as down and we are a historically very low rate currently. 10 years is too long to fix. What is the 5 year fix with your current institution? How about saving the 'extra' payments you can afford to make currently in a high interest account if it pays more than the cost of your tracker. In the meantime keep an eye on rates and if you think they are going to go up fix then and use the lump sum to pay off part of your capital and reducing the term of your mortgage.