BoI Mortgage Rate Renewal?

abnormalnorman · 06-01-2023 1:20pm #1

Hi,

Time to renew my BOI Mortgage repayment rate (current rate expires end of Feb), and offered the following:

VARIABLE LTV <=60% RATE of 3.9%

3 Year Fixed LTV <=60% RATE of 3.0%

1 Year Fixed LTV <=60% RATE of 2.9%

2 Year Fixed LTV <=60% RATE of 2.9%

5 Year Fixed LTV <=60% RATE of 3.0%

10 Year Fixed LTV <=60% RATE of 3.3%

Iv about €90k left to pay in it.

Any advice on which rate to go with?

downburst · 06-01-2023 1:34pm

https://www.boards.ie/discussion/2058278449/boi-mortgage-rate-renewal

How many years do you have left? a forecast at the moment suggests 3 more hikes, somewhere between 1.25% to 1.5% extra by year end. GDP forecasts show next year very slow, but possible they could reduce .25 to .5 or more early 2024. Looking back at the 2000 to 2010 period base rates were around 2 to 4%. That shows what is normal, the last 10 years are not normal. For what it is worth, and I have paid off my mortgage, so no skin in the game, the 5 year looks acceptable given your low balance left. But if you want a bit of risk given the low balance the 2 has it's merits.

abnormalnorman · 06-01-2023 1:57pm

https://www.boards.ie/discussion/comment/120073465#Comment_120073465

10 years left in it.

downburst · 06-01-2023 3:31pm

https://www.boards.ie/discussion/comment/120073582#Comment_120073582

Well the bond market on 10 year euro bonds is about 3.2%. So without getting into debates with anyone, one can expect that as a good guidance plus or minus a .5% of where the market expects rates to be over 10 years. Source: 10-Year Eurozone Central Government Bond Par Yield Curve (ycharts.com)