2-3 ECB Rate Increases Expected by Year End

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Lightning

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m.independent.ie

ECB keeps rates on hold at 2pc

The European Central Bank (ECB) kept key interest rates unchanged, at 2pc,on Thursday, as expected, but bets of rate hikes are increasing.
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The market has fully priced in 2 rate increases and there is a 50% change of another increase in December. With the market, according to Bloomberg, expecting more increases in 2027.

If correct, it might be worth holding off opening new term deposits right now, as term deposit rates might be about to reflect the change in situation.
 
Lightning said:
it might be worth holding off opening new term deposits right now, as term deposit rates might be about to reflect the change in situation.
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Came to the same conclusion around the time Trump got duped into the Iran war. I have a few term deposits maturing around now, so have opened temporary homes for the funds with Moco, Advanzia and Bankinter where I’ll get the short lived new business bonus and hopefully by the time this road runs out the term rates will have increased. I’d like to be gettting 3% APR for 2 years, or better.
 
How do I compare my current mortgage rate with rates that banks are currently quoting?

I have a tracker mortgage currently 3.4%. On the Bank of Ireland website they have a 4 year fixed rate that is 3.2% and 3.9% APR. Despite googling I still don't really get the difference between the two?

Anyway do I compare my existing 3.4% with 3.2% or with 3.9%? Thanks.
 
CharlieMac said:
I have a tracker mortgage currently 3.4%. On the Bank of Ireland website they have a 4 year fixed rate that is 3.2% and 3.9% APR. Despite googling I still don't really get the difference between the two?
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Depends on how long the remaining mortgage term is. APR assumes 20 years I believe, so it factors in what's likely to happen after the 4 yr fixed period ends, all other things being equal.

You need to weigh this against your competitive floating rate.
 
From googling around I see that APR includes the interest rate, mortgage insurance, origination fees, closing costs, and points. It reflects the total cost of credit over the loan's term.

But I also read there is no charge to fix your mortgage rate with your existing bank. So the APR rate doesn't really apply in this case does it? Term and loan amount stay the same so I assume the mortgage protection policy will stay the same. No plans to break out of the fixed rate or pay off early before the 4 yrs are up.

I don't know what you mean by ".. your competitive floating rate"? You mean the rate I am on now or standard variable rates currently on offer or what these may be in 4 yrs time?
 
CharlieMac said:
From googling around I see that APR includes the interest rate, mortgage insurance, origination fees, closing costs, and points.
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I wouldn't have expected it to include the cost of mortgage protection life insurance. I don't know what you mean by "points".


I thought that @Brendan Burgess was always telling people to compare based on repayment amount rather than APR?

Edit: I was mistaken. He said the very opposite! :D
Brendan Burgess said:
I am sick and tired of saying this but I will say it again - ignore the payments - just look at the interest charged.
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In the last interest rate upward cycle, AIB, BoI, PTSB and State Savings came in for much criticism for not passing on the increases to deposit holders. Let's see if the same thing happens in this cycle. There have been some small changes in a very limited number of products by BoI and PTSB in recent weeks but the vast majority of deposit rates are unchanged thus far.
 
Lightning said:
n the last interest rate upward cycle, AIB, BoI, PTSB and State Savings came in for much criticism for not passing on the increases to deposit holders. Let's see if the same thing happens in this cycle.
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Bear in mind that the flood of deposits in the Irish system means that the banks don't compete much for deposits, but this had another effect - the banks did not pass on all the ECB increases to their mortgage holders.

The mortgage holders benefit from the banks having a large pool of sticky deposits.
 
I wonder what the impact will be on the new state savings/investment scheme to be launched later this year...
 
redstar said:
I wonder what the impact will be on the new state savings/investment scheme to be launched later this year...
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Isn't a key thrust of that proposed scheme to encourage people to invest in funds/equities rather than keep money on deposit? I don't think that prevailing ECB rates are going to have any significant impact on how the scheme is ultimately structured.


We want to make investing simpler, clearer, and more accessible for ordinary people, and help their hard-earned money work harder for them over time.
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With increased inflation, we see the value of money held in savings accounts diminish and this highlights the value of diversifying these savings.
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Not sure if this is the right place but are we likely to see movement (up) on interest rates off the back of this? Based on previous increases. I have 4 months left at 2.4% but am wondering if I need to look jump before it expires. We might have a bit of cash come our way before the end of the year and was thinking we might pay down some before signing back up. Have 20 years left for about €225k.
 
faketales said:
Not sure if this is the right place but are we likely to see movement (up) on interest rates off the back of this?
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Are you referring to mortgage interest rates rather than deposit interest rates? Obviously trackers will go up on foot of the ECB change. I presume that some or all standard variable rates may increase imminently. What happens with fixed rates depends on longer term economic forecasts/speculation.
faketales said:
Have 20 years left for about €225k.
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You mean that you have 20 years left and €225K outstanding on your mortgage?
 
Protocol said:
No direct impact, as that scheme will/should be about encouraging people to move some of their savings out of deposits.
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But if savings/deposit rates increase would that be a disincentive for people to move out of savings into investment products, especially with the addition of global turmoil on the markets.
 
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