....When rates increase does the SVR increase immediately or do the fixed and promotional rates go first?
In theory, all rates should go the same way in a relatively short space of time, but at this stage you cannot rely on the Banks to do anything you'd expect.
Personally, this is what I would consider:
Can you afford the repayments if interest rates went up 1% or 2% from your current rate (there are lots of annuity calculators on the internet, if you want to run the numbers and see what it would mean based on your current mortgage) ?
What does your crystal ball tell you that European interest rates are going to do, over the next few years (if you think they will increase and if so, by how much and to what timeline ?) ?
What do you think the future holds for Ulster Bank and your relationship with the Bank ? Do you think there's a chance that Ulster Bank may want to keep their rates low, to try and grow their loan book, or do you think there is a chance that they may become satisfied with their market share, so have no incentive to keep their rates particularly competitive and by extension, hike up their SVR ? What influence, if any, do you think their parent company RBS might have on their strategy or lending rates ? .. RBS has been going through the wars for a hell of a long time now, could always benefit from increased profitability and dividend income from it's subsidiaries, might like to sell Ulster Bank in the future (although they claim they are keeping it) etc.
Personally, I don't see European interest rates increasing anytime soon and certainly not by a substantial amount - whatever about the possibility of a 0.25% interest rate hike over the next 12 months. My thinking would be along similar lines to that of
Sarenco's (above).... and I would be hoping that competition might increase, with the possibility of the Credit Unions, An Post, Frank Money or whoever entering the market to help bring in more competition - not to mention a more aggressive AIB looking to grow it's loan book with the government wanting to sell it's shares etc.