Central Bank is examining the possibility of banning future variable rate mortgages.

Central bank to get rid of variable rate mortgages

Did i just hear right on the rte news at 5 oclockthe central bank want to scrap variable rate mortgages in favour of fixed rates. What will that mean for mortgage holders
 
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They are talking about future mortgages, not current ones. In effect it would mean that in times of high interest rates, the mortgage holder would be in a better position and vice versa when rates are low. No different to taking out a fixed mortgage now
 
Do people not think this would be a good thing? Having say 30 year fixed rates similar to, say the US or most of Europe. Once over that time period, the fixed rates should be lower than normal 5 year rates as it'll take account of the normal economic business cycle.
 
It stems from the EC's review of Ireland just published.
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A second report covering the use of certain types of credit limits, from a prudential point of view,is at an early stage of development. ​
This would take under consideration policy tools including
Mortgage Insurance Guarantees and Loan-to-Value (LTV) limits, as well as potentially fixing all​
interest rates for certain products such as mortgages. It would also consider the use of some​
portfolio/concentration restrictions on high-risk property lending. Due to low levels of lending at present, the urgency for completion of this report is reduced. The credit team intends to present a discussion document before the end of the year, outlining a wide range of policy options and assessing the associated benefits and disadvantages. The Financial Stability committee would then be able to decide on the key priorities for further research, with conclusions and recommendations for implementation to be agreed by the end of Q1 2012.
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Ronan Lyons has been proposing this for some time and it was discussed on askaboutmoney in June in this thread.

 
yeah but what happens when u want to trade up/down?

currently there are penalties (some fairly hefty if u have a long period of time left on the fixed rate) for breaking the fixed term early
 
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