Advice on fixing rate

El Gato De Negocios

Hi all.

Ive just completed a self build property and AIB are my mortgage provider. Final draw down came in this week so all funds have been released.

As we were on a staged drawdown we couldn't look at fixing the mortgage rate but I just spoke to an advisor and we can do so now.

Current variable rate (that we are paying) with them is 3.55% and as our house has a BER of A2, we can avail of their "green rate" and fix it at 3.25% for 5 years.

That seems like an absolute no brainer to me. There are headlines today about likely increases in the coming year so I want to try and get something fixed so is there anything Im missing about fixing at that rate for 5 years as its seems to make the most sense.

Wheety

I would fix for 5 at that rate if it was me. I haven't a clue what rates will be available when your fixed period ends though.

We fixed for our main mortgage with AIB on the green rate at 2.15% a few months ago. We're in the process of drawing down a top up loan and that will be variable until we draw down all of it, like you said. Hopefully rates don't go up too much by then.

El Gato De Negocios

Cheers. Ya, I ended up sending off the forms this morning with the BER cert. The way Im looking at it is that rates have only really increased in the last 12 months and with ongoing inflation and what not they are unlikely to come down in the next 2 to 3 years at a minimum. Hopefully they wont be too mental when the 5 years ends.

walterking

Rates will come down - probably in 2024, but it is highly unlikely that you will get much better than 3.25% in the next few years.

Currently there is an anomaly in the mortgage market and Ireland is one of the cheapest in the EU, especially on fixed rates.

This is due to the massive deposits the bank's have and the low rates they are giving depositors .

As banks are overflowing with deposits there's no real competition and no need to offer good deposit rates.

That will change at some point, but in the meantime borrowers can get excellent fixed rates

Wheety

Is that an AI chatbot?

Jim2007

https://www.boards.ie/discussion/comment/120293353#Comment_120293353

Taken care off.

thehamo

I might weigh in here instead of starting a new thread

Our KBC mortgage has transfered over to Bank of Ireland in Feb. We're locked in to a 2.35% rate until August 2024. Would we be mad to lock in at a higher rate for a longer period now, or should we play it for the year and a half and see how the market looks then??

walterking

https://www.boards.ie/discussion/comment/120352917#Comment_120352917

Enjoy that rare for the next 18 months.

ECB has stated that rates will drop when inflation comes down to their target of 2%

I suspect you will get at worst the fixed rates available now and likely a little better.

FutureGuy

Instead of a near-identical thread, may also ask.

We are coming out of Fixed mortgage of 2.55% and cheapest fixed rates with AIB is 4.1% VAR is 3.3%. We could use the switch to VAR to get some money put into the capital of the loan?

walterking

https://www.boards.ie/discussion/comment/120356226#Comment_120356226

The current issues with some banks is causing the ECB to rethink according to the market with 0.25% increase now expected by some people rather than the 0.5% previously expected.

That decision will dictate what the market will do next, but we're near the top of the increase cycle.

Maybe go variable initially and keep an eye on rates. You can go from variable to fixed with just a phone call.

Some market "experts" are also expecting a far more dramatic fall in inflation next year to under 2% and under 1% in 2025. That would see a quick drop in ECB rates to under 2%.

I'd certainly be avoiding fixing for more than 2 or 3 years at the current elevated fixed rates. (Of Over 4%)

DB83

https://www.boards.ie/discussion/comment/120356226#Comment_120356226

Without knowing specifics of your situation, I would highly recommend getting your property revalued ahead of locking in to a new fixed rate if there is a possibility that your mortgage is in a lower LTV bracket than when you previously fixed.

TheW1zard

Don't forget to revalue the house to get a better LTV

Q&A

https://www.boards.ie/discussion/comment/120356226#Comment_120356226

It's a gamble. The bank is free to up the variable rate at any time or any amount. The question I would ask is how far can you play the game before you're at risk of not being able to meet your repayments. If you're not particularly constrained then what harm but if you're sensitive to interest rate movements you might be better off fixing - albeit at a higher rate -and not having to worry for a few years.