Will ECB Interest rates come down

BillyGoatGruff

Anyone got any thoughts on this. As mentioned in a previous thread i am just about to renew my mortgage and wondered whether to go fixed , variable or tracker.

aoraki

That would be the 64 million dollar question alright. There's been an unprecedented amount of turmoil recently, who's knows what's gonna happen tomorrow, let alone in a few weeks or a few months time.

And I wouldn't go by what the papers are saying either, they've got it wrong on the last few occasions. (Probably wishful thinking on their behalf).

Ogham

No one can say for sure - but the latest forecasts I have seen suggest that a drop is more likely than a rise. It stayed the same today.
Avoid standard variable - they can put those up whenever they want.
A tracker would be my personal option - but a fixed rate can suit some people who like to know that outgoings will be the same for a couple of years.
AIB, NIB and Halifax have some of the lowest trackers - but the rate you get depends on the value of the property and the size of the loan

Clytus

There seems to be consensus amongst commentators that Trichets language today was suggestive of a rate cut before years out....although inflation is still way over what the ECB would like to see.

unclebill98

Well somethings brewing alright. Should be interesting to see what there next move is.

Scottie99

Seems that way. There's talk of one in December and a further one next year. I think we all deserve break!:)

gurramok

They may well cut but will the banks pass it on?

The Euribor is still sky high!

Jaysoose

If the indo is to be belived then the ecb rate will be cut....on the other hand though the banks are going to screw the customers to the wall by introducing new charges on everything from current account charges to loan interest rates.

Basically they will be handed a load of taxpayers money to cover their arse and we will pay double on charges. Somebody in the office made a good point today that if the alledged rescue package was handed out to the people with mortgages there is enough to cover all irish mortgages outstanding at the minute....sucks to be us!

Ogham

gurramok wrote: »

They may well cut but will the banks pass it on?

The Euribor is still sky high!

If people are on an ecb tracker they have to pass on any drop in rates.
They may not reduce standard variable rates though .

gurramok

Yes. It won't help new customers though as banks are losing money on trackers and will do everything to discourage take up of them for newbies.

daveirl

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uberwolf

OP - if you can select tracker do, even if it appears to be at a slight premium to variable. Read small print about the banks options to alter basis of rate depending on adverse or extraordinary market situations.

Clytus

daveirl wrote: »

This post has been deleted.

just watching Bloomberg there and one banker reackons on a 200 point drop within 6 months due to the reactive nature of the ECB in dealing with the credit crisis.

grungefreak1

Hi,

I am in the same boat as others. My handy little 3yr fixed rate is is over in 2 weeks. I was at 3.55% and now they are offering 5.99% tracker (not to ever go over 1.68% above ECB int. rates). They are also offering the same rate of 5.99% on a 5,7 or 10 yr fixed. It means my mortgage rises about 100 euro a month. Not too bad and I am thinking of fixing it to buy a bit of peace of mind. I wouldn't be in trouble at 6% but I would be kicking myself if they came down and stayed down!

In light of the above situation, can anybody please help me stop tormenting myself over this decision? Any constructive views would be most welcome.

Thnks

GF

dobsdave

grungefreak1 wrote: »

Hi,

I am in the same boat as others. My handy little 3yr fixed rate is is over in 2 weeks. I was at 3.55% and now they are offering 5.99% tracker (not to ever go over 1.68% above ECB int. rates). They are also offering the same rate of 5.99% on a 5,7 or 10 yr fixed. It means my mortgage rises about 100 euro a month. Not too bad and I am thinking of fixing it to buy a bit of peace of mind. I wouldn't be in trouble at 6% but I would be kicking myself if they came down and stayed down!

In light of the above situation, can anybody please help me stop tormenting myself over this decision? Any constructive views would be most welcome.

Thnks

GF

As an aside,
You seem to have quite a low mortgage (less than 100k), based on the repayments only going up 100 euro despite a 2.5% increase.
You should be able to get a better rate than the one offered.

grungefreak1

dobsdave wrote: »

As an aside,
You seem to have quite a low mortgage (less than 100k), based on the repayments only going up 100 euro despite a 2.5% increase.
You should be able to get a better rate than the one offered.

Thanks. Yes my mortgage is around the 100k, I suppose nowadays that would be considered low.

I asked the guy on the mortgage team at my bank for a lower rate and he said they can't do it. Do you reckon we can haggle with banks over this? I mean it's a tracker and they have set rates for that.

Any advice or thoughts much appreciated. Would I be mad fixing it at 6% for 5 years honestly?

gf

gurramok

It sounds like you also have low ltv which means you can haggle alot.

Jet Black

Along with a few others..

US Fed cuts by 50bps
Bank of England cuts by 50bps
ECB cuts by 50bps
Bank of Canada cuts by 50bps

Good news for mortgage holders.

Jet Black

Along with a few others..
Brings it down to 3.75%.

US Fed cuts by 50bps
Bank of England cuts by 50bps
ECB cuts by 50bps
Bank of Canada cuts by 50bps

Good news for mortgage holders.

daheff

Also Switzerland and Sweden cuts by 50bps

http://www.bloomberg.com/apps/news?pid=20601087&sid=aXSJ6B94iw3M&refer=home

BillyGoatGruff

Happy days. Thats all i say...happy days... Mortgage due for renewal on the 18th and stil hadn't decided which way to go. Am i right in saying that if i go tracker that the rate will come down immediately but if i go variable it could take ages to be passed on.

Jet Black

Well Variable is the banks own rate so they can change it whenever they want. Tracker changes in line with ECB.

Ogham

BillyGoatGruff wrote: »

Anyone got any thoughts on this. As mentioned in a previous thread i am just about to renew my mortgage and wondered whether to go fixed , variable or tracker.

ECB rates are down today to 3.76% (0.5% cut)

Scottie99

http://www.rte.ie/business/2008/1008/mortgage.html

daveirl

This post has been deleted.

grungefreak1

gurramok wrote: »

It sounds like you also have low ltv which means you can haggle alot.

when you say haggle, do you mean I can for example ask for a lower fixed rate or something? I have been offered a tracker also but I presume you can't haggle about the rate on a tracker? i.e. they won't set interest rates more than 1.68% above ECB rates. Or can I haggle on the tracker rate issue too?

I know people will say that you can haggle about anything but realistically can you?

GF

PoolDude

Tell the Bank Manager to get on the broker center and get you the rate you want or your transfering to another bank (whichever has the best rate you can get). They may ask if you have an offer letter from that bank and the terms of it but probably don't have to see it as its a private document.

I'm currently paying .75% above ECB based on that type of discussion.

Tarakiwa

Can we be assured that the banks will pass this rate reduction on to us poor mortgage payers??

PoolDude

Only if your on a Tracker. That said some of the banks have already said they are passing it on the varialbe rate holders (Halifax & AIB so far I think)

delly

Gave my mortgage provider, Irish Nationwide, a ring to see if there's any word on passing it on as I'm on a variable rate, and he said that they have been told by management that the full .5% will be passed on. So i'll wait until I get the letter in the post, but sounds good so far.

dobsdave

grungefreak1 wrote: »

when you say haggle, do you mean I can for example ask for a lower fixed rate or something? I have been offered a tracker also but I presume you can't haggle about the rate on a tracker? i.e. they won't set interest rates more than 1.68% above ECB rates. Or can I haggle on the tracker rate issue too?

I know people will say that you can haggle about anything but realistically can you?

GF

Anything is negotiable.
Call a few mortgage lenders and see what they will offer you.
Then get back to your current one and tell them you are considering changing, and what can they offer you.
At 100k mortgage, I'm guessing your house/apt is worth at least 200k?
which gives you an ltv of 50%, a very good bargaining chip.
A tracker of 1.68 above the ECB is not great in anyones book.

mobpd

Are Tracker rates immediately changed each time the ECB rate changes? I'm with EBS on a tracker rate- they havent updated the website and the call centre is now closed. I wondered if they had some leeway over delaying the reduction in rate or is it supoosed to be effective from the start of the following month etc?

Ogham

mobpd wrote: »

Are Tracker rates immediately changed each time the ECB rate changes? I'm with EBS on a tracker rate- they havent updated the website and the call centre is now closed. I wondered if they had some leeway over delaying the reduction in rate or is it supoosed to be effective from the start of the following month etc?

The actual ECB rise isn't effective till next Wednesday - so don't expect many lenders to change trackers till then. They should normally change tracker rates within 4 weeks max of an ecb change.

Scottie99

There is talk of a second round of cuts happening this or next week.

Lets see if the banks start lending to each other

Ogham

Scottie99 wrote: »

There is talk of a second round of cuts happening this or next week

Where did your hear this (or read it) ?

gurramok

It looks like the budget will claw back those cuts especially for those on the higher tax rate according to speculation in the papers.

Give with one hand, give it back with the other

Scottie99

BBC4 radio Money program (podcast). Worldwide cuts.

Seems further cuts might now take place at the next meeting in Nov