Does it make sense to fix mortgage now whilst unemployed?

Currently unemployed and have my mortgage with First Active, variable rate of 4.2%, payments being covered partly by Payment Protection Insurance and balance by savings at the moment, although PPI due to finish up in around 3 months.

Given that First Active have not passed on all ECB rate reductions in full so far and they have not decided on yesterdays reduction yet I am feeling a bit uneasy about the uncertainty of payments.

I am considering put my mortgage on a fixed rate for 3 years (once they've made their announcement on yesterdays rate change) to allow me to know exactly what my payments would be for the foreseeable future. My main worry is that the rates would start to climb again, (talking about First Active and not ECB) and the payments would be outside of my control.


Does this make sense to do or am I just in a state of panic with all the uncertainty, thanks?

Controlling your payments makes sense so you have the right idea but I think your timing is a bit off.

In the coming months it could be time to fix but I would say hold off for now. Rates are at worst going to remain where they are for the foreseeable and at best will reduce again in June.
I think the ECB will make it pretty clear if they are going to raise rates.
My advice, keep with the variable for now.

Check with First Active how long it would take to change to a fixed rate and what documents they will need. At least you could have these ready.
Hopefully you just need to request to go on the fixed rate but better to be prepared.

Thanks Norfbank, I agree my timing is not ideal but if I understand it right, First Active or any other Financial Institution would be well within their rights to increase rates at any time irrespective of ECB and thats what concerns me.

Unfortunately as I have no job I cannot seek out an alternative and more competitive mortgage as I think First Active/ Ulsterbank have one of the worst variable rates and with a LTV of around 50% I'm sure I could get a much better deal somewhere else but I must grin and bear their interest rate for the foreseeable future, thanks for the reply.

Cashstrapped said:

Thanks Norfbank, I agree my timing is not ideal but if I understand it right, First Active or any other Financial Institution would be well within their rights to increase rates at any time irrespective of ECB and thats what concerns me.

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There is this risk involved and RBS are not under the state guarantee but I can't see them raising the variable rate not when everyone else is cutting theirs. I could be wrong though.

If you can afford and feel the need to fix now, do it.

If you attempt to time the market, you could find that fixed rates have risen in the meantime, thus wiping out any 'gain' from holding off on your decision. The chances of beating the bank to the punch so to speak are slim indeed.

While I would be somewhat surprised to see Irish banks raising variable rates, nothing would shock me-especially considering UB/FA are not beholden to the Irish Government for their survival and so aren't subject to the type of political pressure the other banks could find themselves under if they were to raise rates. That said, the possibility appears remote at the present time. My crystal ball is no better than the next man's.....

I would hedge your bets and look at fixing after the next rate drop in June. We are probably looking at two more drops this year so if I were you I would at least take the above course of action.

I`m also with First Active(not for much longer hopefully) and have fixed with them in the past. Just call them up and ask them to send out their fixed rates to you and they will send them out in the post. All you have to do to check the box of the length of fixed term, sign the document and return it. They are ususally valid for 14 days or something like that.

Good luck with them and also finding another job.

Thanks all, I see they've passed on .25% from yesterdays ECB reduction, better than nothing, will wait out and see if there is another reduction and what they pass on before committing myself to the fixed rate.