Interest Rates Up or Down???

C

columt

Guest
Hi there, I am about to sign a mortgage and can’t decide whether to go fixed for a few years or hold off for a better fixed interest rate in the New Year if interest rates fall as some are predicting. I currently have an offer of a tracker of .75 which is a good rate but should I go for fixed? I have one investment property worth €280K and am definitely leaving that at the tracker rate. My second mortgage would be my own new house and that will be €547K.
Any info would be greatly appreciated, thanks
 
5.39 from First Active. I know you can get 5.0 from PTSB and 5.08 from BOS.
 
columt,

is your investment property interest only? if not you should read the threads relating to this on AAM
 

It's nigh on impossible to predict ECB interest rate direction at the moment. The ECB are caught between market turbulence (increasing need for lower interest rates) and rising inflation (increasing need for higher rates). Honestly, the flick of a coin would give you as accurate a prediction as anything, despite certain VI's predictions.

If ECB do reduce rates it's unlikely they'll drop them more than 0.5% given inflation threats. If they rise them it's unlikely they'll push them up more than 0.5% given slowing growth.

In general I'd recommend caution at the moment rather than trying to predict either way and/or get a better rate. Having said that I don't see what's to lose if you stick on an ECB +0.75% tracker rather than fixed of approx 5.2%. As I said more than a 0.5% increase is unlikey in the medium term (although not entirely impossible) and a 0.5% decrease is more than possible but not much more.

It's very much a holding pattern at the moment.
 
well,

the best way to look at this is 0.75 is a good rate, the US and the UK are going to or allready dropping rates, the biggest thing that will drive the ECB to drop rates is the stength of the EURO. a strong euro works against inflation but too strong and the us will stop importing VW,s, bmw's etc. so i think well see a fall next year which will help the property market if not theyll wait at the same level all year!
 
You don't see any chance that it could go up?

The BoE and the Fed are stuck in the same hard place as the ECB - worried about inflation so they don't want to lower rates, worried about growth so they can't raise rates.
The ECB and the BoE have a single mandate - keep an inflation target of about 2% (so somewhere between 1.5 and 2.5). Monthly inflation is above target in both the Eurozone and the UK.
The Fed has a dual mandate, keep inflation low (with no target specified) and promote growth (with no target specified).

The BoE MPC voted 7-2 to keep rates the same at the last meeting, changed from 8-1 at the previous meeting.
I don't believe the ECB and the Fed publish the voting information.
 
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