Mortgage Interest Rate Increase

oB1

I know I and the rest of the coutry are in the same boat, but, I had drawn down a new mortgage in November 2021 and fixed the rate at 2.60% for 2 years thinking " ah sure might be better rates available by then "... it's two years later now, and the best rates available to me with Bank of Ireland are:

Current Rate: 2.60% @ €930.00 a month

• Variable @ 4.500% ( €1,204.21 ( increase of €274.21 a month ) )
• Fixed ( 1 or 2 years ) @ 4.150% ( €1,151.78 ( increase of €221.78 a month ) )
• Fixed (3 or 5 years ) @ 4.250% ( €1,166.65 ( increase of €236.65 a month ) )
• Fixed (10 years) @ 4.750% ( €1,242.32 ( increase of €312.32 a month ) )

Should I fix again and for how long or should I stay on variable for a while to see if rates go down? - will rates go down do you think ? - I really don't know what to do and either way I am screwed. If only I could go back in time!

:'(

Facthunt

I’d go fixed for 2 years …. Give yourself peace of mind! I think the mates will stay high for a while!

Daith

Yeah it's pretty frustrating. Fixed for a short term probably.

Can you switch or is it all the same rates?

JVince

2 years.

Rates will be on a downward trajectory at some point next year which will lead to lower fixed rates.

I can't see 2.6% returning though.

4.15 seems decent

Ron75

I've heard rumours that the rates should go down in the next 1-2 years. However, we'll only when it's actually happening. I personally would fix it as rates might go up a bit more before coming down.

It'll also give you more control of your monthly expenses.

howiya

To the OP there is a piece on Today with Claire Byrne right now about switching etc. Might be worth having a listen back to.

Mac-Chops

In the same boat as OP here coming out of 5 years at 2.9%.

Am inclined to take the 1 or 2 years @ 4.15% rather than 5 years again @ 4.25% and hopefully things will have settled down a bit over the next while.

Recently started a new job and switching options are limted for now anyway.

daheff

i'd fix for 1 year at most. 2 rate cuts and variable rate is lower than the fix rate.

reasonably speaking you would need rates to be cut quite quickly to have a variable rate beat a 1 year fixed rate (assuming only 2 cuts in 12 months).

From what I'm reading, ECB aren't likely to cut rates before next summer.

Personal view is that we'll see rates drop to ~3.5% by end 2024. Possibly Sept & Oct rate cuts.

Q&A

Second guessing ECB rates is one thing but an ECB rate cut, whenever it may occur, will not automatically be passed on to mortgage customers. That's up to your lender. Don't confuse variable rate mortgages with tracker mortgages. The latter is very much defined by the ECB rate.

Current mortgage rates on offer is one thing but the ability to repay is another. Id prefer to lock in a higher - but affordable rate - if it gave me certainty for a period of time.

Red Silurian

I would recommend a 1 year fixed if it's the same rate as a 2 year fixed. I don't see rates increasing so worst case scenario I think they'll be the same next year and you might fix at the same rate in 12 months

lau1247

Have a look at this and see if you qualify for the relief/credit (The new one). It might lessen the pain a little.

https://www.citizensinformation.ie/en/housing/owning-a-home/buying-a-home/mortgage-interest-relief/

dxhound2005

If it is in any way relevant to Ireland ? UK lenders announced mortgage rate reductions on 03 January 2024.

HSBC joins mortgage rate-cutting drive with deals below 4%

Five- and 10-year fixed-rate remortgage offers announced as lenders big and small reduce rates

Padre_Pio

https://www.boards.ie/discussion/comment/121566900#Comment_121566900

"I don't see rates increasing"

Do you see them coming down this time next year? I doubt it.

L1011

https://www.boards.ie/discussion/comment/121569653#Comment_121569653

UK rates couldn't be less relevant to Ireland at this stage.

ECB rates might start to fall from the summer but many banks here have not put fixed and variable rates up by anything close to the rises in the ECB rate; and our variables are now some of the lowest in the Eurozone. I'd expect them to stay around the current level for a few ECB drops.

Red Silurian

https://www.boards.ie/discussion/comment/121569662#Comment_121569662

I think they'll be stable at their current rates until at least this time next year. The ECB rate isn't going to change until mid-summer at the earliest according to the projections. When they drop it will be a few months before the Irish banks do similar, except in the case of trackers of course

-=al=-

2 years @ 4.15 from the options would be my preference. Smallest increase and can reassess in 2 years when hopefully it improves