Will you be overstretched when interest rates increase? If the answer is yes then you should think about fixing. Just be aware you can get a 5 year fixed rate for 3.86%, seems better value than 3.54% for 3 years.
Are you fixing because you think rates are going to increase and you want to fix to try and save money? In this case I would say stick with the variable rate, do not try and time the market.
"Are you fixing because you think rates are going to increase and you want to fix to try and save money? In this case I would say stick with the variable rate, do not try and time the market"
Yes I am, but only because its what all the news articles and papers are telling me to ha! I thought it was high advisably cause rates are gonna shoot up in the next year? I dont have a clue to be honest.
Yes I am, but only because its what all the news articles and papers are telling me to ha! I thought it was high advisably cause rates are gonna shoot up in the next year? I dont have a clue to be honest.
Personally I cannot see rates shooting up, most experts agree that they may start to rise around the middle of next year and then in small increments of 0.25% to test the water.
If you fix at 3.54%, you will need the ECB to raise rates by 0.89% (3.54% - 2.65%) before fixing saves you money. A 0.89% increase could be spread over 4 separate 0.25% increases. How long could this take is anyone's guess but say it takes a year from mid 2010, this means it will be mid 2011 before your fixed rate is in the money but you will have been paying a rate of 3.54% since the end of 2009.
This is just my view and it could be completely wrong but so could all those articles by the experts
Instead of worrying about the future direction of interest rates it could be wiser to take advantage of the low variable rate by overpaying your mortgage if possible.
Why make it an 'either - or' question - why not consider both? Fix a portion - and let a portion stay on variable - you could even sub-divide the fixed element in to say two or three chunks - say some on 2 year, 3 year and five year...
All the news articles suggest interest rates are not going up until Q3 2010 at earliest...BUT any Irish bank can decide to increase their interest rates without ECB increase.. So i think that is a good suggestion by pjmn on splitting into part fixed, part variable if you think you wont be under pressure