Variable or fixed ?

[cadence]

Hi,

This is an opening question ( as I don't have specifics to hand ).

Basically I see interest rates rising over the next few years.

I am currently on a variable mortgage.

is there any ready reckoner that I can use to make an educated decision regarding changing from variable to fixed and to what period.

For example.

If I have a variable mortgage at the moment of 3.81%

staying with the same institution, I see

1 Year fixed 3.88 %
2 Year fixed 3.97 %
3 Year fixed 4.10 %
4 Year fixed 4.24 %

I think I need to do the following ( correct me if I am wrong )

1. Calculate on my current repayments the actual cost of percentage point rises.

2. Look at personal circumstances and pick a pain point that I am uncomfortable at.

3. Having done that, look at the above rates and if the pain point is above a specific fixed rate, the the rate below that is the relevent rate ( assuming that fixing for less that this is not a good idea ).

4. Take an educated guess as to rate rises, over the duration of the fixed period. This is where I certainly need some input - from what the current european rate is and expected rates over next 6,12,18,28 months to figure out to stick or not ?

Additional info.

I do not anticipate selling within the next 5 years, so fixing and then being stuck regarding getting out of this is not a problem.

Thanks for any pointers..

 

[Merrion]

If you use the Search facility there are loads of discussions on this

 

[CCOVICH]

is there any ready reckoner that I can use to make an educated decision regarding changing from variable to fixed and to what period.

Try Karl Jeacle's calculator.

Basic rule of thumb is only fix if you need to be sure of the repayments.

As loughquinn says there are loads of other discussions on this.

 

[CCOVICH]

There isn't really much new in this query, so I'm locking the thread. A search will throw up loads of results.