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Mortgage fixed Rates

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  • 20-08-2018 1:24pm
    #1
    JimmyMW
    Registered Users Posts: 695 ✭✭✭


    I am thinking of fixing my mortgage for a long period 5-10 years. My current mortgage provider does not offer the best fixed rates or fixed terms north of 5 years. I am in a good position, LTV rate well below 50% etc, my question is can I negotiate with my current mortgage provider or is my only option to go to the alternative providers with the better rates and longer terms, ie can the banks only offer you their advertised rates & terms?


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    #2
    SozBbz
    Registered Users Posts: 1,889 ✭✭✭SozBbz


    Well, you've not said who your current lender is so hard for anyone to give their experience.
    That said, I know BOI offer 10 year fixed terms, currently offering 3.5%
    Why do you want to fix for so long anyway? if you look at any of the banks it seems that 3years ish is where the lowest rates are. After that, its like you're being penalized for committing long term. Are you not worried about locking yourself in for such a long time?


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    #3
    JimmyMW
    Registered Users Posts: 695 ✭✭✭JimmyMW


    SozBbz wrote: »
    Well, you've not said who your current lender is so hard for anyone to give their experience.
    That said, I know BOI offer 10 year fixed terms, currently offering 3.5%
    Why do you want to fix for so long anyway? if you look at any of the banks it seems that 3years ish is where the lowest rates are. After that, its like you're being penalized for committing long term. Are you not worried about locking yourself in for such a long time?

    Current lender is AIB. As to why I want to fix for so long, interest rates are amongst the lowest they have ever been in Ireland, 2004 was the last time they were as low as they are now (stats from 1975 to now). Therefore I believe now would not be a bad time to fix. From a personal point of view having a defined payment for the next 10 years would be beneficial as we are at a stage in our life which will be financially challenging with kids etc.

    I am lead to believe our rates are higher than the rest of Europe currently, however I don't know if that will have any real affect on the ground here. I would love to hear the views of others about it.


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    #4
    SozBbz
    Registered Users Posts: 1,889 ✭✭✭SozBbz


    Our rates are still higher than the EU norms however as you point out, this seems to always be the case in Ireland. If the economy continues to grow at speed then its likely that interest rates will rise, however we are part of the eurozone so as such the performance of the irish economy is not of much relevance.

    I'm currently looking at fixing for 2 years with Ulster Bank for 2.3% as its by far the best rate in the market. I'm not opposed to fixing for a long term but I'd like to get value, and I just don't htink the banks are incentivising it as they obviously don't want a lot of the customers locked into low rates should conditions change.

    In short, even if eurozone rates go up a bit, I think think theres plenty of fat built into the Irish pricing models to allow the banks to keep rates in and around current levels. We're beginning to see some competition in the market for switchers (like UB above who are offering €1500 towards legal fees) and hopefully we will start to see some international competition coming back into the market again soon.


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    #5
    JimmyMW
    Registered Users Posts: 695 ✭✭✭JimmyMW


    SozBbz wrote: »
    Our rates are still higher than the EU norms however as you point out, this seems to always be the case in Ireland. If the economy continues to grow at speed then its likely that interest rates will rise, however we are part of the eurozone so as such the performance of the irish economy is not of much relevance.

    I'm currently looking at fixing for 2 years with Ulster Bank for 2.3% as its by far the best rate in the market. I'm not opposed to fixing for a long term but I'd like to get value, and I just don't htink the banks are incentivising it as they obviously don't want a lot of the customers locked into low rates should conditions change.

    In short, even if eurozone rates go up a bit, I think think theres plenty of fat built into the Irish pricing models to allow the banks to keep rates in and around current levels. We're beginning to see some competition in the market for switchers (like UB above who are offering €1500 towards legal fees) and hopefully we will start to see some international competition coming back into the market again soon.

    Its a tough one, back in 2008 interest rates reached nearly 6%, which I know was the height of the crisis. If I calculate the difference between the current variable to the lowest 10 year fixed the difference across the 10 years is the equivalent of the increase of 20 months repayments if interest rates were to rise to 4.5% from what they are at now. 2006-08 saw interest rates above the 4.5% mark, while 2009-15 saw interest rates above 4%. So fixing at 3 or 3.1% for 10 years seams like a good bet to me, and if I'm wrong the security of same has not cost me a lot, unless variable drops way down to the 1-1.5% mark.


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    #6
    SozBbz
    Registered Users Posts: 1,889 ✭✭✭SozBbz


    True, although I'm not sure which lender is going to give you circa 3% for 10 years. BOI is the best I could find at 3.5%. 
    I suppose its a matter of whether the certainty that brings is worth paying what appears to be a premium rate in the current climate. 
    Personally I'm going to continue fixing for 2/3 years at a time and if I see the writing on the wall about big increases coming down the line, then I might look to extend.
    Its also worth asking any lender what the breakout cost would be from any such loan. I had asked this of BOI previously and it was surprisingly less than expected, but this will differ from bank to bank, so wouldnt take anything for granted.


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    #7
    JimmyMW
    Registered Users Posts: 695 ✭✭✭JimmyMW


    SozBbz wrote: »
    True, although I'm not sure which lender is going to give you circa 3% for 10 years. BOI is the best I could find at 3.5%. 
    I suppose its a matter of whether the certainty that brings is worth paying what appears to be a premium rate in the current climate. 
    Personally I'm going to continue fixing for 2/3 years at a time and if I see the writing on the wall about big increases coming down the line, then I might look to extend.
    Its also worth asking any lender what the breakout cost would be from any such loan. I had asked this of BOI previously and it was surprisingly less than expected, but this will differ from bank to bank, so wouldnt take anything for granted.

    KBC are offering 2.95% fixed for 10 years for LTV<60%. Good point about the break clause, i will add this to my list of considerations.


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    #8
    Samuel T. Cogley
    Registered Users Posts: 10,684 ✭✭✭✭Samuel T. Cogley


    Fixed for 10 years with KBC @ 2.99% still delighted with the security for the next decade.


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    #9
    hmmm
    Registered Users Posts: 11,205 ✭✭✭✭hmmm


    I tried negotiating with AIB and they wouldn't budge - but what have you got to lose in asking? I went with someone else in the end, their loss. I value the peace of mind of long-term fixed rates, so went for 10 years also.


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    #10
    JimmyMW
    Registered Users Posts: 695 ✭✭✭JimmyMW


    hmmm wrote: »
    I tried negotiating with AIB and they wouldn't budge - but what have you got to lose in asking? I went with someone else in the end, their loss. I value the peace of mind of long-term fixed rates, so went for 10 years also.

    I was thinking that was the case alright, ill chance asking anyway. Yes the peace of mind is appealing.


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    #11
    Marcos
    Registered Users Posts: 473 ✭✭Marcos


    FYI I was speaking to a mortgage adviser with KBC last week and he told me that they intend cutting their rates on Sept 3rd.

    So if anyone is dealing with them just ask for confirmation of that.

    When most of us say "social justice" we mean equality under the law opposition to prejudice, discrimination and equal opportunities for all. When Social Justice Activists say "social justice" they mean an emphasis on group identity over the rights of the individual, a rejection of social liberalism, and the assumption that unequal outcomes are always evidence of structural inequalities.

    Andrew Doyle, The New Puritans.



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    #12
    Crimsonred
    Registered Users Posts: 99 ✭✭Crimsonred


    Sorry to bump an old thread but I have a quick question regarding fixed rates.

    My fixed rate comes to an end this month and I was going to fix again for two years at a particular rate which I had decided upon but my question is what is the likely effect that the Covid-19 situation will have on mortgage fixed rates over the short term?


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    #13
    Cuddlesworth
    Registered Users Posts: 13,980 ✭✭✭✭Cuddlesworth


    Crimsonred wrote: »
    Sorry to bump an old thread but I have a quick question regarding fixed rates.

    My fixed rate comes to an end this month and I was going to fix again for two years at a particular rate which I had decided upon but my question is what is the likely effect that the Covid-19 situation will have on mortgage fixed rates over the short term?

    It was pointed out before, usually interest rates are high in a boom and low in a recession. We are just out of low rates(relatively) in a boom and we are slamming into a recession hard.


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