POLL: Could you cope it rates went up 3%?

S

Shawady

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Two years ago the ECB rate was 4.25%
Now it is 1%.
This drop must have been a great help to homeowners that have had pay cuts.
I'm just wondering how many could cope if the ECB rate went back up to that level. You would be looking at approx an extra €350 a month on a 200k mortgage.

It would be tough for me but in a couple of years when I am out of the creche fees I think I would cope.

Just wondering would this be enough to drive people over the edge?
 
I can cope all right but then I'm not really a follower of fashion and sold off my house when others were all buying. Hence I've no mortgage and interest rate rises are actually beneficial to me. It will push up deposit rates and further depress prices allowing me to buy a better house with a much smaller mortgage. Interest rates are too cheap for me at the moment as they're only going one way and that's up. Best to wait till they've risen.
 
I paid my tracker when it was at those high rates and it was hard but manageable.
Paying ecb + .75% at the moment and was paying over €300 more a month a few years ago and also getting TRS so it would be a jump. With the tax increases now it would be harder to come up with the extra money. My mortgage has approx €160,000 left on it. Those on variable rates are paying high rates now. PTSB's new fixed rates are similiar to personal loan rates imo i.e over 9% to fix for 10 years!
 
In my current situation I could not afford it if ECB went up another 3%.

In reality- your bank will have more increases than just 3% (unless you are on a tracker).

So a 3% increase in ECB will equate to about 4.5-5% increase in reality in mortgage payments.
 
My mortgage is roughly €350K but fortunately I'm on a tracker

A 1% increase would be about an extra €210 per month (based on recent reports that a 1% increase adds €60 per month to a €100K mortgage)

Could probably just about absorb a 2% increase but after that it would be a real struggle.
 
Our rate is currently 1.75% but paying back the equivalent payment of 3.25%, with the intention that when interest rates start to rise we will increase the payment but we have a margin there if needed. When taking out the mortgage I priced it at 7.5% and made sure that was affordable. It was 4.5% at the time we took it out.
 
On a tracker with PTSB ( thank god not their variable). I was overpaying it, but have stopped that, and saving the difference in a high interest deposit. If rates rise over what I get on deposit, I'll start overpaying again. Glad I'm in the position to do this.
 
looking2011 said:
am on a tracker of 0.5%...don't ask how we managed to get this rate, think pure fluke. however in severe negative equity so no point selling now. Could absorb another 1.5% rise but until the youngest get to the age where he is in free pre-school I would struggle. once the smallies get into school my current expenditure on childcare costs would cover a rise.
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That's kind of scary that you're struggling with an interest rate of 1.5% and would struggle with even 3%. ECB rates will normalize at 4 to 5% over the next few years, higher if inflation gets out of hand.
 
2% increase on top of our existing variable rate would cost an extra €690 per month for us and would change our lives considerably, for one I will probably lose a lot of weight cause I might not be able to afford to eat!!
 
Yep, god bless my tracker at +0.75%, which we're overpaying at the minute anyway
 
We are on a tracker so currently at 1.6% with a mortgage of 300k approx

We could afford an increase of about 1.5% at the moment with our current take home pay. However, as I am a public servant, I suspect my income will continue to decrease over the next few years. Add in decreased child benefit and having to pay property tax and water charges and we would be getting near to a siuation where we could not make incomings meet outgoings. I am hoping that by the time that day comes, my youngest will be in school, so we could decrease outgoing on childcare. If it comes before that, we will have to dip into meagre savings
 
We fixed today - we had been paying 3.83% since Jan 2010, having come off a two year fix then. We'll now be paying 5.2% for the next three years.
We'll manage, but I've recently been made redundant and we've a baby on the way. He's a civil servant so at least some stability for the moment (barring any major intervention from the IMF) but like MammyOf2, I wouldn't be surprised if his earnings are reduced (via tax/charges/reduction of wage or otherwise) over the next couple of years.
I fear that while we won't starve, we've a difficult couple of years ahead of us. Even if I still had my job, I'd be worried, let alone not having it and soon to have the expense of a baby!
 
Mpsox said:
Yep, god bless my tracker at +0.75%, which we're overpaying at the minute anyway
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I am so Jealous of all ye'r Trackers!! I think the reason the banks will squeez their variable rate customers so tightly might be because they are loosing so much money on all these Trackers that were given in the good times, I would mind those trackers like they are babies.... Sigh.. Wish I had a Tracker:(
 
Graftgirl said:
I am so Jealous of all ye'r Trackers!! I think the reason the banks will squeez their variable rate customers so tightly might be because they are loosing so much money on all these Trackers that were given in the good times, I would mind those trackers like they are babies.... Sigh.. Wish I had a Tracker:(
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yeah - 70% of mortgages being ECB tracker, 20% Varialble and probably 10% fixed means that banks have get the Variable guys to subsidise all those "lucky" ECB tracker ones. esp. the case in PTSB, as opposed to EBS.
 
It wouldn't make any sense when the deposit rate is higher, save your money on deposit and then use your savings to overpay your mortgage after a few years more bang for your buck this way, IMO
 
michaelm said:
Does it make sense to overpay on a loan @ 1.75% when 3% is available on deposit?
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I stopped overpaying my tracker mortgage and placed the overpayment amount in a regular savers demand account with UB @ 4%.Makes a lot more sense. If necc. I can pay down a lump sum from this at a later date.
 
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