10 yr fixed vrs variable

Deiseboy01

Keen to get opinions on whether or not I should move into a fixed rate mortgage.

Surprised to see BOI are offering 2/3 & 5 yr fixed rates below my current variable. 10 yr just 45bps over.

Current rate is 4.05.

I cant see a whole lot more downward movement in rates. Government are locking in 30 yr money at today's rates. Maybe interbank competition in Ireland may push rates down. Overall I can see more potential for rates to rise significantly in the medium term there peace of mind for ten yrs at 45bps doesn't seem too bad a deal

Thoughts?

euroboom13

IMO

I would fix it long term(10yr).(if I was well rooted)5yr fixed wont average out to any Hugh saving and if it did your rate after 5 yrs could be penal .

I also think anyone whom has a rate of less than 5% ,will at some point in the next 10yrs , be looked at with great envy.(and sooner than most think)

Low rates can't hold indefinitely

GLA

For ever odd

The consensus is that the ECB will not start to raise interest rates until 2017. The rate is currently 0.05%, to say the banks are screwing you is a understatement!
http://www.irishtimes.com/business/financial-services/only-ecb-can-help-cut-mortgages-but-don-t-bank-on-it-1.2023197
It begs the question as to why they are offering such deals?

ixus

What are the possibilities?

Lending competition = lower fixed.
Risk off in Europe = higher.
Euro breakup = messy. See Polish mortgages in chf for some indication

Depending on your bank, you could split fixed & variable %.

Morleystreet

The 10yr fixed rate looks to have gone up to 4.5% now. Just wondering was it 4.05% back on 6th February when op posted or was that a typo?

Deiseboy01

Morleystreet wrote: »

The 10yr fixed rate looks to have gone up to 4.5% now. Just wondering was it 4.05% back on 6th February when op posted or was that a typo?

firstly thanks for all the replies to date. Still looking at options so if anyone wants to add their opinion please do so.

The rate was 4.05%, thats for a less than 75% ltv mortgage.

Looking around Ulster bank are offering 3.7% for seven year fixed with a ltv if less than 60%. Seems a decent deal although I'd be interested in opinions.

Value Hunter

Rates from the ECB practically cannot go lower. Getting these low rates passed onto the mortgage holder is another issue altogether.

A case in the paper today of a couple taking a case of their variable mortgage rate being excessive due to low ECB rates. Rate of 4% p.a is 80 times the ECB rate they argued.

4.5% over ten years sounds good, but when BOI are getting it at 0.25% it really shows the margin!

SouthBank

Maybe you should consider the spread as well as the ECB rate.

Trish56

I think you should hold off fixing until the outcome of the court case as it is thought that if the couple win the case that banks will have to reduce variable rates for existing customers. Irish banks are charging 4.50% standard variable in comparison with European banks who are charging 3.50%.