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to fix or not to fix? KBC Homeloans

  • 17-06-2009 9:16am
    #1
    toodelies
    Registered Users, Registered Users 2 Posts: 80 ✭✭


    Hi all,

    am looking for opinions on this one, i can't decide what to do.

    i am currrently on a variable rate with KBC and everyone is saying fix! Their fixed rates aren't the best plus i don't really have the extra money to cover the raised cost of fixing. at the end of the day i would find the extra cash to cover the fixed rate repayment if the variable rate was going to rocket...

    taking a long view on it (i will be living in the house for at least the next three years) what is the general opinion out there, do people see the variable rates going up? should i fix? i don't know what to do!

    HELP! Crystal ball anyone?


Comments

  • #2
    maxwell smart
    Registered Users, Registered Users 2 Posts: 1,940 ✭✭✭maxwell smart


    I'm with KBC myself, my gut feeling is that the rates will drop another quarter percentage point, it may of course not be passed on! But I don't think I'm going to fix for at least 6 months. Of course, that is only my view and I'm not a financial advisor!

    As an aside, they are a bit of a rip off but I'm too lazy at the moment to move, and in current economic environment might not get approved by anyone else!


  • #3
    Toots
    Administrators, Business & Finance Moderators, Society & Culture Moderators Posts: 16,957 Admin ✭✭✭✭✭Toots


    Would you be in a position to switch your mortgage to another institution? A lot of places are offering good introductory rates for new customers (both FTBs and switchers) so it might be worth checking out if you could switch and then fix at the lower rate.


  • #4
    ferga_com
    Closed Accounts Posts: 159 ✭✭ferga_com


    Fixed rates are priced using the markets' best assessment of what will happen to rates in the future. Fixed rates are currently pricing in the anticipation of future interest rate increases. In other words, the markets believe that interest rates will rise over the medium to long term and this is already priced into the fixed rates currently on offer.

    Check with KBC if your mortgage allows you to re-draw overpayments. KBC mortgages on sale at present offer this - I'm not sure if it applies to all KBC loans. It basically is a clause they have that means you can overpay your mortgage and save on interest by doing so, but can withdraw your overpayments on request.

    So instead of fixing at a higher rate, you could consider putting the extra money as an overpayment. If rates do go up, you can redraw the overpayments to help you paying the increased amount.


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