Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie

Fixing during current volatile period

  • 09-04-2025 08:24AM
    #1
    Timistry
    Registered Users, Registered Users 2 Posts: 780 ✭✭✭


    Hi all,

    We have been on a variable rate for a few years (3.75%). There have been 6 ECB rate cuts over the past year and the variable rate has not reduced by a single percentage point.

    I am in the process of fixing for 3 years at 3%. However, I am reading commentary this am that a further rate cut in April is most likely and if the trade war really escalates and stagflation takes hold, the odds are that rates will be cut further. You would imagine that banks would be pressured to cut the variable rate should this happen but Irish banks have a very poor record in this regard.

    I know its crystal ball stuff, but what how do you think this will all play out?



Comments

  • #2
    thebiglad
    Registered Users, Registered Users 2 Posts: 1,722 ✭✭✭thebiglad


    The Financial Institution's own Economics team have tried to consider exactly the same in setting their Fixed Rates - 3 years is actually quite a short period so, they clearly reckon over the course of those 3 years they can turn a small profit.

    When I fix my mortgage I consider the stability of the monthly repayment balanced against the possibility that I may pay more in year 3 if interest rates reduce below my fix, I was always happy to swallow that, if I was fixing for 5 or 10 years I may take a different view.

    In reality if the ECB continues to lower its rate there is no assurance that Mortgage Rates will follow in a linear fashion or, when those discounts will be applied.



  • #3
    [Deleted User]
    Posts: 0 ✭✭✭ [Deleted User]


    ECB will be lowering rates again OP.

    Im much like you. 3.5% for 3 years with 10 months left on it. I'll keep my powder dry for now. I think in the next 3 months i should be able to get 2.8%.

    My advice is to ring your bank. They might offer you a rate not advertised.



  • #4
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,949 Mod ✭✭✭✭Henry Ford III


    Fix for certainty, and not for profit.



  • #5
    Jim2007
    Moderators, Business & Finance Moderators Posts: 10,823 Mod ✭✭✭✭Jim2007


    https://www.boards.ie/discussion/2058405592/fixing-during-current-volatile-period

    Nobody can tell you how this will pan out there are simply too many parameters. The EU is committing to spending up to 700b on rearming, that is money that will not be available for lending to the public, if it is financed by borrowing. On the other hand it seems some countries are looking to European bonds to replace US treasuries, while others are estimating that there is about 3T worth of corporate bonds that need to be refinanced…. The only thing a fixed rate does is give you certainty.

    One think I would point out is your expectations on banking are flawed. There is a very weak relationship between rates offered by a bank on it's products and the market rates. The biggest factor being their own portfolio - if they already have sufficient exposure to the mortgage market there will be little motivation to significantly drop rates, like wise their ability to securities and finance the lending will come into play. Generally speaking Irish banks tend to have an over exposure to the mortgage market, which may be the background to your comment on banks.



Advertisement