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Fixing Interest Rates

  • 05-03-2009 10:22am
    #1
    Dovers
    Closed Accounts Posts: 161 ✭✭


    Hi All,

    Looks like ECB will reduce the main lending rate to 1.5% today. With this in mind do you think it would be a good time to take out a three year (or maybe 5 year) fixed interest rate for a first time buyer? AIB and Bank of I have 1 yr special "fixed" rates for first time buyers which revert back to the variable rate after yr one (whatever it may be at the time).
    I know fixed rates are generally higher but are they better value overall in the current climate?


Comments

  • #2
    veryangryman
    Registered Users, Registered Users 2 Posts: 5,708 ✭✭✭veryangryman


    No no and no.

    Things are going to get worse before they get better. ECB hasnt reached its bottom rate just yet - and the banks know it. I regularly get asked to move to fixed from my bank (because my tracker rate is crucifying em :D)

    My advice, ask for a variable (assuming they no longer offer trackers). Being the governments b!tch, the banks have an unwritten obligation to keep the variable rates in line or thereabouts.

    Wait until ECB reaches zero - THEN maybe move to fixed. Obviously this does not take into account any oil crisis, world war or alien invasion that may disrupt the current market in the meantime. :pac:


  • #3
    Dovers
    Closed Accounts Posts: 161 ✭✭Dovers


    ok thanks for that. If the rate does go that low (0%) then the fixed rate will likely be somewhere between 1.5-2.5% (assuming 3 yrs fixed for example) ? Its hard to know whether the eurozone economy will recover significantly in this time frame to a point where the fixed rate would be better than the variable. Whats your view?


  • #4
    Drumpot
    Registered Users, Registered Users 2 Posts: 19,306 ✭✭✭✭Drumpot


    Dovers wrote: »
    ok thanks for that. If the rate does go that low (0%) then the fixed rate will likely be somewhere between 1.5-2.5% (assuming 3 yrs fixed for example) ? Its hard to know whether the eurozone economy will recover significantly in this time frame to a point where the fixed rate would be better than the variable. Whats your view?

    Thats the €24million Question ! !

    The general consensus appears to be a .5% rate cut today (just announced) and probobley a .5% rate cut in the summer.

    Its difficult to invisage the rates going anywhere but down in the near future.


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