Is Now The Time To Get A Fixed Rate Mortgage

Bronte

Frequent Poster
Messages
13,859
one bank then refused to let people out of fixed rates for any reason,
I don't understand this, if you pay the penalty they have to let you out of the fixed rate?

Ajapale

What is a coller and cuff mortgage?

In relation to the fixed rate debate, fix if you want peace of mind, if you know what the penalties are for breaking it and if you think you can't handle much of a variable rate rise.
 

NorfBank

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2,103
I don't understand this, if you pay the penalty they have to let you out of the fixed rate?

Back in February, PTSB tried to stop people coming off a fixed rate even if they paid the penalty.

Collar and cuff is where interest rate boundaries are put on a mortgage, it cannot fall below x or above y.

Say you have an ECB + 0.5% tracker, collar of 6%, cuff of 2%.

Today your interest rate will be 2% not 1.5% as on a normal tracker.
If ECB rises to 7%, the highest rate you will pay is 6%.




www.moneybackmortgages.ie
 

Timbo

Frequent Poster
Messages
65
I must admit I am tempted to get a fixed rate. By that I mean 10 years. Anything less completely defeats the purpose and could leave you coming to end of term as the policy cycle heats up and variable and short-term rates increase sigificantly.

It will all come down to your own personal views, but the type of emergency monetary policy being propogated in Europe could have potentially dramatic implications for inflation over a 5-10 time horizon if the ECB don't judge things well (and possibly even if they do). If inflation pushes up to 5% or above, you could be looking at variable rates of 8-9%, or more if inflation really takes off.

I am trying to formulate my own views at the moment on what I think the probablity of that happening is. the sub 5% 10 year rates I have seen quoted would be a nice insurance policy.
 

maggieO

Registered User
Messages
20
We came off a three year fixed with NIB recently and switched to AIB, thought long and hard about whether to fix and for how long. Eventually decided to go for the three year fixed although the five year was attractive. I think its important to think of the possible situation with rates when your fixed rate ends, we thought rates could still be reasonable in three years so we could fix lowish again whereas in five years things could be very different and rates could be very high which would be a huge financial shock. Of course its impossible to predict but thats how we gambled and hope it pays off. Last fixed rate we got was 3.69 which was brilliant when rates started to rise the last few years, at least with a fixed rate you can plan your outgoings over a cetain period.
 
G

Guest116

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It will all come down to your own personal views, but the type of emergency monetary policy being propogated in Europe could have potentially dramatic implications for inflation over a 5-10 time horizon if the ECB don't judge things well (and possibly even if they do). If inflation pushes up to 5% or above, you could be looking at variable rates of 8-9%, or more if inflation really takes off..
Would you think about staying with a tracker and saving money in a high interest deposit account in the meantime. If your timeframe is 5-10 years could you save a decent chunk of money and use that if you wanted to reduce your mortgage down the line. You would also hope that in 10 years time your salary would go up espiecially if inflation rises.

For me the main concern is the cost of the repayment each month, I don't really care what the interest rate is. If rates go to 8% I can use some savings to reduce the mortgage. But you dont need to gamble by taking a fixed rate today and throwing away a low margined tracker mortgage.

Actually, how does that work. Say I have 50k and want to take it off the mortgage will my mortgage term be reduced or will my repayments be reduced? How does it work? Do I have a choice?
 

NorfBank

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2,103
Actually, how does that work. Say I have 50k and want to take it off the mortgage will my mortgage term be reduced or will my repayments be reduced? How does it work? Do I have a choice?
It will be up to you, paying off a lump sum will reduce the term if you keep up the same repayments or you can reduce the repayments over the original term.



www.moneybackmortgages.ie
 

zod

Frequent Poster
Messages
14
I must admit I am tempted to get a fixed rate. By that I mean 10 years. Anything less completely defeats the purpose and could leave you coming to end of term as the policy cycle heats up and variable and short-term rates increase sigificantly.
This is great advise, IMO interest rates will balloon in about 3-5 years time, but will remain low untill then. If your not fixing for a long time stay on your tracker and save money.
 
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