To fix for 5 or 10 before monday??

S

shergar

Guest
i need to fix my mortgage with aib and have been looking at their rates for five and ten years. i currently pay 3.25% on my variable. I have been offered 5 years at 4.39% and 10 years at 5.2% not bad after hearing of last weeks rises by some lenders. I am erring towards the 10 year option but am unsure and need some advice. I am worried if i dont make my mind up before monday i may well miss the boat. I am no expert but from what i have been hearing the ERC rate should rise to 3/4% soon enough and i am currently paying 2.25% over their rate so a ten year option seems to make sense. I have no knowledge of the markets or interest rates and would really appreciate any advice i can get. Would 5 years be long enough to ride out the storm??
 
A hard question to answer. 4.39% certainly looks an appealing rate for a 5 year fixed because you can see variable rates going way above this. Whether 5.2% is a good 10 year fixed rate nobody knows. You're in to guessing territory. Will markets rebound over the next couple of years and then we go through another recession and interest rates start coming way back down again. Anybody that can work this out could make a lot of money...
 
Dont think ECB rate will rise by 4% anytime soon.

Are you on a tracker?

the five year 4.39 looks like great value to me,

Im no expert

Paying 5.65 fixed over 5 years myself
 
another question to ask your self before fixing for 10years is are you going to stay there for 10 years. If you want to sell it could be expensive to get out of the mortgage
 
Thanks for the feedback,i am on a variable rate unfortunately how i wish i had got a tracker a few years back now! I cant see myself moving but ten years is a long time and i am currently living in an appartment so you never know. I was sure i was going to go for the ten year option but i am having trouble making that leap of faith now. I keep telling myself that 5.2% is historically a low rate but that is about as much as i can afford to pay at the moment and wages are not likely to rise in my job and taxes are only going up .....
 
For what it's worth, most lenders will refund the break penalty if you get your next mortgage with them, if you do need to trade up during the ten years. Check if AIB do this.
 
if you can afford the 5.2% then go for it.
i wouldn't gamble on something as important as a mortgage.
 
Does anybody know is there a requirement for an institution to give advanced notice of a fixed rate hike? Did I read somewhere that there was now a requirement of one month notice?
 
Who knows what could happen in ten yrs? Personally I wouldn't sign up for anything that long.
 
horusd said:
Who knows what could happen in ten yrs? Personally I wouldn't sign up for anything that long.
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Agreed.

Have a search for terms like "getting out of a fixed rate". It's only a few years since people here were vowing never to fix again due to breakage penalties.

We have short memories, we live in a boom and bust society. Unless you are 100% sure that you will not need to alter your mortgage in the next ten years then don't fix it for ten years. If you are considering this course of action then at least give yourself some flexibility by putting a portion of it on a variable rate.

www.moneybackmortgages.ie
 
Hi all,

I am in an similiar situation to shergar but unfortunately not as lucky with the interest rates. Currently we have to decide whether to go for a 3 year fixed rate at 4.4% or 5 year fixed rate at 5.2%, I would really appreciate anyone's advice on whether to go for a 3 year or a 5 year fixed rate.

If we go for the 5 year rate we will be paying about €3,901.58 extra over the 3 years but if we don't go for the 5 year rate, what state are the interest rates going to be in 3 years time?

We have been advised by our bank that 2014 (when our 3 year fixed rate would be up) is going to be the turning point for the Irish economy but I don't know if it will turn around that quickly.

Also the bank we are going with increased their fixed interest rates on the day we received our loan offer so I am feeling a bit frustrated with them anyway.

It would be great for us if 'county' was right with regards to the one months notice of a fixed rate hike but I doubt that.

Shergar, if I were you I think I would be more inclined to go for the 5 year fixed interest rate of 4.39%, that is a very good rate for 5 years and 10 years is a long time.

Thanks
 
We have been advised by our bank that 2014 (when our 3 year fixed rate would be up) is going to be the turning point for the Irish economy but I don't know if it will turn around that quickly.
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Lol - They are impartial no doubt and have a track record for getting things right. :D
 
Yes exactly Elcato. They advised us to go for the 3 year fixed term but call me cynical I just don't trust them and would like some other advice.
 
if i could get 4.39% for 5 years fixed today i'd take it, but that's because i've been paying 5.18% since mid 2008 on a fixed rate.

that's the thing with fixed rates, timing is everything. if i'd have fixed a few months later the rate would have been much lower (i fixed just before ECB rates dropped).

coming out of my current contract in July this year and god knows where rates will be but i imagine higher than 5.18% for fixed.

personally i prefer the comfort / forecasting ability that fixing gives. but the rates are getting prohibitive.
 
Hi all sorry for taking so long to get back and thanks for all your feedback its much appreciated!
I eventually decided to fix for 5 years @4.39% because i was one hundred percent comfortable with that and could not say i felt the same way with the ten year option,even though i kept telling myself it was a good deal @ 5.2%.
However only time will tell but i am completley happy with my decision.
I found it very stressing making this decision and the input you gave really helped.
Thanks again!
 
Did you fix the entire mortgage?
If you have not to worry but for anyone reading my advice would be to leave part of it on a variable rate say 10-20% so as it allows for an overpayment if you were to come into money with out there being a penalty.
 
yeah i did the whole mortgage not to worry but thats good advice for someone else on here.
 
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