Mortage Advice - Stay put or switch

L

lillady

Guest
Hi all
I have a mortgage with 257,000 left over 32 years. Am currently on a tracker mortgage of 2.25% above ECB which makes my rate 3.25% currently. However I am worried about the fact that rates are set to raise and we are quite high over ECB if rates were to go up. Our mortgage is currently 1004.00 a month. Have looked around and have been approved with BOI for a fixed rate of 4.64% for next 5 years and also reducing mortgage to 30 year term. This will cost approx 1300 less interest relief and am wondering should I go with it. This would be about the max I could afford and am afraid if ECB went up to around 4% which would be classed as normal that our rate would then be 6.25% so really dont know what to do. Any ideas appreciated.
 
ECB may increase rates by .25 per 1/4 which would mean it would take 3 years for the rate to go that far.
 
You are currently being charged 3.25%

Permanent tsb is charging a standard variable rate of just over 5% which is probably the rate which all the banks will move to in time.

I reckon that the rate you are on is 2% cheaper in the long term.

So even if you fix for 5 years, you may have 25 very expensive years after that.

If you are intent on fixing, ask Bank of Ireland will they switch you back to the tracker when the fixed rate period ends.
 
Thanks for the advice. Know everyone is saying stick to the tracker but what turned me off was an article eddie hobbs wrote about people should try to fix trackers as the rates will increase steadily and was looking for advice. Its just if rates went up steadily Id be afraid we would struggle to pay. Does anyone think that the rate of 2.25% above ECB is a hindering factor or would you still see benefits in keepin it.
 
If the rates go up the variable rates will go up to and when you come off what might seem like a good fixed rate now the offerings will be even higher if the banks have to compensate in a few years to too low of fixed rates.
Have heard many financial advisers on the radio shows saying trackers are like gold dust.
You have to think of the long term of the mortgage. if you have say 20 or even 30 years to pay I would hold onto it.
Try to put extra away now each month so you have a fund to help if it gets a little too much for you. Look for other ways to cut back where you might be wasting funds.
 
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