Mortgage Rates (Crystal Ball)

Hey,

My wife and I are at the latter stage of purchasing our first house and are starting to doubt our original idea of fixing for 5 years.

Were hoping to get our mortgage through BOI and currently we have been given the rate of 4.64% STD (4% APR). This will leave our mortgage pretty much at the same price as our rent (excluding mortgage interest relief). However, I’ve read in a few place that long or in our case semi-long term fixing is always a bad idea, I’ve never understood why, but I guess we will be paying approx 1.3% more than the current variable so will guaranteed to be more interest than needed until the mortgage rates change, or if they change again.

Anyone got a crystal ball out there for interest rates? Or can anyone enlighten me as to why fixing for long periods is seen to be a bad idea?

The Duck.

Applying some of my new-found knowledge here..

Fixing makes things like switching provider or paying off some of your mortgage early very expensive. If you don't plan on doing either of those the only problem is that you may be stuck with a higher rate than the standard variable.

General consensus is that ECB rates are only going one way - up. Most seem to predict a raise of up 1% this year (going up in increments of .25% - starting perhaps as early as next month), with a further .5-1% next year. After that, it's anyone's guess. Have a google and do some of your own research on this.

Lots of banks seem to be pulling their fixed rate products or making them prohibatively expensive. For me, that seems to be evidence that fixing on a decent rate right now would be a good idea.

I'm in the same position as you and am very much considering fixing for 5 years.

FYI, I believe AIB has a better 5 year fixed rate, at 4.39%. If anyone knows of a better rate than that, please let me know.

leonmahon said:

Applying some of my new-found knowledge here..

Fixing makes things like switching provider or paying off some of your mortgage early very expensive. If you don't plan on doing either of those the only problem is that you may be stuck with a higher rate than the standard variable.

General consensus is that ECB rates are only going one way - up. Most seem to predict a raise of up 1% this year (going up in increments of .25% - starting perhaps as early as next month), with a further .5-1% next year. After that, it's anyone's guess. Have a google and do some of your own research on this.

Lots of banks seem to be pulling their fixed rate products or making them prohibatively expensive. For me, that seems to be evidence that fixing on a decent rate right now would be a good idea.

I'm in the same position as you and am very much considering fixing for 5 years.

FYI, I believe AIB has a better 5 year fixed rate, at 4.39%. If anyone knows of a better rate than that, please let me know.

Click to expand...

That's a great 5 year fixed rate. My Permanentt TSB variable rate is 5.19%!

well so much for that!

We recently also are in the process of purchasing. The rates available are 3.7% for a 2 year fixed or 4.34% with ICS for a 3 year fixed.
The 2 year option seems too good to be true or is it a good deal?