Fixed term v Variable for Mortgage

AdrianG08

Coming to end of our 5 year fixed term rate for our mortgage (2.85%).

Cannot avail of any green rates unfortunately, standard variable rate with AIB is 4.15% which is a nice bump in repayments.

With a valuation report they have a PDH LTV Variable >50% <80% at 3.95% which seems to be best option at minute.

My question is, does anyone envisage variable rates going up for any of the Irish banks? The equivalent fixed term to suit us is between 4.3 and 5.3% which seems mad.

Do we expect interest rates to fall much in next few years? And do we expect to see greater reduction in fixed rates or standard variable rates with Irish banks?

Vittu

In the same boat nearly, we were fixed which ended in March 2024. I decided to go variable as it seemed the ECB were going to drop interest rates further, which they have. I have been meaning to check to see does our mortgage holder bank follow suit by dropping interest rates in line with the ECB.

Henry Ford III

Nobody knows with certainty. Fix rates for certainty not for profit.

Vittu

Do Irish banks have to follow what the ECB do in regard to dropping their interest rates?

Q&A

https://www.boards.ie/discussion/comment/122778593#Comment_122778593

Outside of specific products directly linked to an ecb rate (i.e., a tracker product) then no.

Simi

Generally they will drop to stay competitive. But there's nothing to stop them acting like the insurance or electricity providers and keeping rates artificially inflated for profit.