Interest Rates, whats the consensus

Bluefoam · 05-09-2019 2:17pm #1

What are peoples thoughts on interest rates at the moment? Obviously rates are different per bank, but: Variable; Fixed 3 year; Fixed 5 year...?

I think they'll probably go down slightly with the world economy prossibly going into recession & Brexit... But I'm still debating whether to fix for 3/5 years.

aloooof · 05-09-2019 3:01pm

I've very little insight into whether they are more likely to go up or down but there are 2 additional things worth considering:

1. There's the option to split your mortgage part-variable, part-fixed.

2. Over-payment capacity could also play a part in deciding. You can only over-pay by 10% for Fixed (with BOI, at least) but can overpay any amount you like for variable.

If you can afford to overpay by more than the 10%, it could be very worthwhile having a variable portion of your mortgage.

antix80 · 05-09-2019 3:31pm

aloooof wrote: »

1. There's the option to split your mortgage part-variable, part-fixed.

2. Over-payment capacity could also play a part in deciding. You can only over-pay by 10% for Fixed (with BOI, at least) but can overpay any amount you like for variable.

Not with AIB.

I've a variable rate mortgage with them and they recently told me the option to split is only available to new customers. They put it down to limitations in their system but I'm sceptical of that excuse.

I think overpaying even by 10% isn't available on AIB's new offering.

aloooof · 05-09-2019 4:03pm

antix80 wrote: »

Not with AIB.

I've a variable rate mortgage with them and they recently told me the option to split is only available to new customers. They put it down to limitations in their system but I'm sceptical of that excuse.

I think overpaying even by 10% isn't available on AIB's new offering.

Fair point, which emphasises an even bigger consideration. Always confirm with your bank.

Samuel T. Cogley · 05-09-2019 6:20pm

For me a fixed rate sub 3% for 10 years suited as it gave us security.

Chris_5339762 · 05-09-2019 8:16pm

I'd be tempted to fix for the first few years of the mortgage just so you get used to paying it and then go variable and overpay after that.

No idea what rates will do but if you are variable and can overpay a goodly bit you'll save more money than you ever could by fixing at a lower rate.

whatever76 · 05-09-2019 8:27pm

I've fixed with BOI @ 2.9% for 2 years and plan to over pay up to 10% once I get sorted after the initial costs of moving in - taking a risk that Interest rates don't go significantly up after the 2 year term to decide then what to do - Minefield to know what the right thing to do is - am sure hindsight will come into play in 2021

antix80 · 05-09-2019 8:35pm

2.9% is manageable.
Some people were insulated from the worst of the bust. Other's took the brunt. Lost jobs, negative equity and banks literally doubling their interest rates. Ptsb were up around 6% on their standard variable rate despite advertising competitive rates for new business.

ted1 · 05-09-2019 10:04pm

Talk about another even cut. And the Irish banks are still over charging compared to European banks. If they sort out evictions, cuts may happen

Browney7 · 05-09-2019 11:27pm

No one has a crystal ball but if you can get a good fixed rate for a year it's hard to see you going too far wrong. Overpay by the amount that you would have to pay on a higher fixed rate % if possible.

Another year's time the % of outstanding lending linked to trackers will have dropped by a few % and more new lending will be on more profitable rates. Difficult to see ECB rates increasing so the only thing that will cause rates to drop will be competitive pressures.

baldbear · 05-09-2019 11:37pm

Fix for 2 years?

We are moving from AIB variable 2.95 to UB fixed 2.3% for 2 years and will see what rates are then & move again.

You can overpay by 10% with UB fixed I think.

Peregrinus · 06-09-2019 6:51am

Anybody who is borrowing money is not already fantastically wealthy. Which they would be, of course, if they could reliably predict future interest rate movements.

S never make this decision based on beliefs about whether interest rates are about to go up or down. Make based on a recognistion of the fact that they could go either up or down, but you cannot know which, or when, until it happens.

So the question is, if they went up, would that put me under severe financial strain, even jeopardise my solvency? If the answer to that is "yes", then a fix looks like a good idea.

ted1 · 06-09-2019 6:59am

baldbear wrote: »

Fix for 2 years?

We are moving from AIB variable 2.95 to UB fixed 2.3% for 2 years and will see what rates are then & move again.

You can overpay by 10% with UB fixed I think.

Are you actually getting 2.3% is that the interest or the APRC rate?

Be careful, at the end it jumps up to over 4% so if you don’t change as soon as it finishes by the end of the first month of 4+% you’ll have cancelled out a good bit of the savings from the 2.95% rate

aloooof · 06-09-2019 8:59am

ted1 wrote: »

Are you actually getting 2.3% is that the interest or the APRC rate?

Be careful, at the end it jumps up to over 4% so if you don’t change as soon as it finishes by the end of the first month of 4+% you’ll have cancelled out a good bit of the savings from the 2.95% rate

Interested in this in practice (and sorry for the derail). If you were coming towards the end of your 2 year fixed period, how long typically does it take to switch to another bank / mortgage so you can avoid the increase? Any suggestions / advice?

browne_rob5 · 06-09-2019 9:23am

antix80 wrote: »

Not with AIB.

I've a variable rate mortgage with them and they recently told me the option to split is only available to new customers. They put it down to limitations in their system but I'm sceptical of that excuse.

I think overpaying even by 10% isn't available on AIB's new offering.

Yeah I got the same from them so I am in the process of moving to KBC. You can overpay 10% of the principal over the term of the mortgage with KBC. Think I'll fix for 2 years at 2.25% as don't see the rates going up much if at all in the next 2 years and can also pay off a lump sum at the end of the 2 years and fix again. 3k cashback also so should have 2k left after legal fees.

ted1 · 06-09-2019 10:00am

browne_rob5 wrote: »

Yeah I got the same from them so I am in the process of moving to KBC. You can overpay 10% of the principal over the term of the mortgage with KBC. Think I'll fix for 2 years at 2.25% as don't see the rates going up much if at all in the next 2 years and can also pay off a lump sum at the end of the 2 years and fix again. 3k cashback also so should have 2k left after legal fees.

The ECB are expected to cut rates this month

Bluefoam · 06-09-2019 8:41pm

Ulster Bank just dropped their rates... Hopefully it'll encourage the others to do likewise...

2.65 for 5 year fixed

handlemaster · 07-09-2019 7:21am

ted1 wrote: »

Talk about another even cut. And the Irish banks are still over charging compared to European banks. If they sort out evictions, cuts may happen

Eviction period for non paying tenants and mortgage holders in ireland is crazy

PokeHerKing · 07-09-2019 11:10am

browne_rob5 wrote: »

Yeah I got the same from them so I am in the process of moving to KBC. You can overpay 10% of the principal over the term of the mortgage with KBC. Think I'll fix for 2 years at 2.25% as don't see the rates going up much if at all in the next 2 years and can also pay off a lump sum at the end of the 2 years and fix again. 3k cashback also so should have 2k left after legal fees.

I switched 2 years ago but 1.2k was the cheapest solicitor I found. If you're based in Dublin could you PM me your solicitor details please? Going to switch again soon.

baldbear · 08-09-2019 7:11pm

ted1 wrote: »

Are you actually getting 2.3% is that the interest or the APRC rate?

Be careful, at the end it jumps up to over 4% so if you don’t change as soon as it finishes by the end of the first month of 4+% you’ll have cancelled out a good bit of the savings from the 2.95% rate

Yeah we are getting the 2.3% but as you said it will jump to 4.3% after 2 years. I will have to shop around again then or try & change to another low UB rate. As long as we get under 3% I'll be happy.

Irish_peppa · 10-09-2019 11:23am

ted1 wrote: »

The ECB are expected to cut rates this month

Analysis: Interest Rates could well be still at zero come 2030
Interesting article re ECB rates

One has only to look at Japan to see that rates can remain extremely low for a very long time. It was in February 1999 that Japanese interest rates first hit zero, and 20 years on little has changed. “Japanification” is one of the current buzzwords in capital markets as investors and analysts wonder if Europe can avoid following in Japan’s footsteps.

Although some would argue that Japan’s ageing population has a lot to do it, personally I wouldn’t be surprised if Europe heads in the same way in terms of the length of time it holds rates at ultra-low levels. Even if European rates do go up in the next few years, it is likely to be only by a small amount.

And with another economic downturn more than possible over the next decade, rates will probably fall again over the period. So come 2030, rates may be little different to where they are now, which will have profound implications for both borrowers and savers.

https://www.irishexaminer.com/breakingnews/business/analysis-interest-rates-could-well-be-still-at-zero-come-2030-947643.html

Frozen Veg · 10-09-2019 12:51pm

Some banks in Denmark are now offering negative mortgage interest rates.

A sign of things to come perhaps.

mariaalice · 10-09-2019 1:45pm

Frozen Veg wrote: »

Some banks in Denmark are now offering negative mortgage interest rates.

A sign of things to come perhaps.

How dose that work?

BIGT4464 · 10-09-2019 2:00pm

BOI, was on a fixed 3% last two years, offering 2,9% now for 1 or 2 years, deciding which on to go for. Might do the 1 year now, so I can be flexible again next year. Was overpaying by 300 on our Variable 4.25% before we fixed two years ago, same monthly payment now as was when on the variable.

antix80 · 10-09-2019 2:01pm

mariaalice wrote: »

How dose that work?

Have a read:
https://www.theguardian.com/money/2019/aug/13/danish-bank-launches-worlds-first-negative-interest-rate-mortgage

Jyske Bank is able to go into money markets and borrow from institutional investors at a negative rate, and is simply passing this on to its customers.

Borrowers will make a monthly repayment as usual – but the amount still outstanding will be reduced each month by more than the borrower has paid

There are still fees and charges to pay to compensate the bank for arranging the deal

10-year deal at -0.5% (I'm not sure what the LTV has to be)

browne_rob5 · 10-09-2019 2:11pm

PokeHerKing wrote: »

I switched 2 years ago but 1.2k was the cheapest solicitor I found. If you're based in Dublin could you PM me your solicitor details please? Going to switch again soon.

PM sent. Who are you switching from/to?

Frozen Veg · 12-09-2019 9:50pm

https://www.google.com/amp/s/www.rte.ie/amp/1075112/

evosteo · 17-09-2019 10:32pm

antix80 wrote: »

Have a read:
https://www.theguardian.com/money/2019/aug/13/danish-bank-launches-worlds-first-negative-interest-rate-mortgage

Jyske Bank is able to go into money markets and borrow from institutional investors at a negative rate, and is simply passing this on to its customers.

Borrowers will make a monthly repayment as usual – but the amount still outstanding will be reduced each month by more than the borrower has paid

There are still fees and charges to pay to compensate the bank for arranging the deal

10-year deal at -0.5% (I'm not sure what the LTV has to be)

Wow

Interest Rates, whats the consensus

How Long Should We Keep Going On? 70 votes

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