New Interest Rates this month?

costacurta

Hi guys,

Currently in the process of buying a house and i'm considering fixing my mortgage for 3-5years as interest rates are quite low at the moment, but i was talking to our brooker and he said that there are a new set of figures out this month. Does it look like interest rates are going to continue to fall or do people think that they are likely to start increasing soon?

The_Conductor

costacurta wrote: »

Hi guys,

Currently in the process of buying a house and i'm considering fixing my mortgage for 3-5years as interest rates are quite low at the moment, but i was talking to our brooker and he said that there are a new set of figures out this month. Does it look like interest rates are going to continue to fall or do people think that they are likely to start increasing soon?

First of all- none of us have crystal balls in here- so nothing we say is gospel.

Irish Life and Permanent significantly increased the margins on their products last week- the other lenders have sat on the fence thus far. It is thought that as soon as the dust dies down they will increase their margins in a similar manner.

This is speculation- but would appear to have a foundation in fact.

If you can lock in lower rates now I'd be inclined to do so. If you are expecting further falls- you are probably in a very select few who are expecting further falls- I am not aware of any economists, at all, who think rates could fall further.

D3PO

Firstly re your brokers comments.

Interest rate numbers are discussed by the ECB every month by their monetary commission are the rate is agreed. This isnt new. Just wanted to clarify incase there is/was some misunderstanding with your broker that makes you think this is an unusual occurance.

secondly as SMS has said nobody has a crystal ball, however it is a fact that rates right now are at an unprecedented low and there is very little room for rates to move but up.

HOWEVER my cavet here is that banks are not in the business of losing money. Therefore banks fix their rates at what they believe will be beneficial to themselves for the term of the fixed rate. They dont gamble on this and have teams of exonomists projecting where they believe rates will be and what the Eurobar rate will be to ensure they are still making their margins.

In a long winded way what Im saying is I dont see there ever being any benefit in fixing your rates. The house always wins. (pardon the pun )

The_Conductor

An article in today's Indo here is speculating about major consolidation in the mortgage industry over the next few weeks which they imply will spell much higher rates for all.......

D3PO

smccarrick wrote: »

An article in today's Indo here is speculating about major consolidation in the mortgage industry over the next few weeks which they imply will spell much higher rates for all.......

yep read that article yesterday. I dont see it happening certainly not in the short term.

The_Conductor

D3PO wrote: »

yep read that article yesterday. I dont see it happening certainly not in the short term.

Its not going to happen until the NAMA bill goes through the Houses of the Oireachtais- which will probably be late Sept. and even then there would be war. Why should the likes of the EBS be punished for prudent lending practices- and forced to use its comparative strength to rescue PTSB and others?

D3PO

smccarrick wrote: »

Its not going to happen until the NAMA bill goes through the Houses of the Oireachtais- which will probably be late Sept. and even then there would be war. Why should the likes of the EBS be punished for prudent lending practices- and forced to use its comparative strength to rescue PTSB and others?

thats exactly why I dont see it happening. Not to mind another 3,500 odd people on the live register. I know this government is on its last legs but it would be political suacide for them to even contemplate this.

gurramok

To the OP, I'd fix for 5 years at least on a 3-4% rate range or less if you can get it. Just be prepared in 5 or 10 years time when you come off the fixed rate that repayments will more likely rise for you assuming the rates are retailing at 4%+ then.

Basically, its a gamble on what will happen and you have to calculate how that will affect your personal finances now and in the future.

Senna

EBS made a statement that they have no intentions of raising the SVR at the moment, but it is going to be reviewed in October. I would take that as advance notice that the SVR will rise in October, and probably a similar timescale (if not before) for all other banks.