Would you consider 2 year fixed rate of 4.25% nominal rate justifiable?

E

erick

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Would you consider 2 year fixed rate of 4.25% nominal rate justifiable!.....an offer by permanent TSB. Do you think Permanennt TSB has the good offer at the moment, any good lender that you can suggest and have a reasonable interest rates. Im a first time buyer and needs badly your assistance...thanks !
 
Re: I need your point of view....

ecb rates are going to be at least 3.5% in one year and mortgage rates will be over 4.5%
 
It's probably justifiable alright, as in it's not pure lunacy. But as an FTB, you should be able to secure a better New Business rate than that, I would have thought.

ECB rates will probably hit 3.5% in the next year or so as bearishbull says, so you could end up in a situation whereby you're paying more than you need to this year where you could get variable rate of 3.75% or so, in order to possibly get a better deal for the second year, if variable rates were to hit 4.5%-plus.
 
I would switch to the NIB I got a 2 year fix there a few weeks ago for 3.29 %. I switched from the Ulster bank and they paid the legal fees. I believe the 2 year fix is now 3.59% and they can hold this rate for you, but only for another few weeks if the application form is in soon.
 
Latest inflation figures show prices rising at 3.8% per annum so the real cost of funds is much lower than is implied by the rates quoted above.
 
demoivre said:
Latest inflation figures show prices rising at 3.8% per annum so the real cost of funds is much lower than is implied by the rates quoted above.
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yes but the real return on property/other assets is also lower by that same inflation amount.
 
just remember that banks are probably pretty well clued up on the forthcoming interest rate hikes etc and they are'nt in the business of losing money. Remember also the biggest problem with fixed mortgages - the loss of flexibility re overpayments, early redemptions etc. But if you are happy enough your circumstances won't change too much over the next few years and want the peace of mind (never mind the "oh, did rates go up again, I fixed a couple of years ago" statement which you can gleefully relay to your work colleagues as an indictment of your financial acumen) then go for the best fixed rate you can get.
 
There's loads of discussion on fixed vs. variable/tracker rate mortgages elsewhere on the site.

For a comparison of what other lenders offer, check out the following:

Finfacts

[broken link removed]

The Indo but requires registration

Or [broken link removed]
 
Re: I need your point of view....

bearishbull said:
ecb rates are going to be at least 3.5% in one year and mortgage rates will be over 4.5%
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FYI the market expects the ECB rates to hit 3.25% by the end of this year, but head back down to 2.75% by the end of 2007.

There is even some doubt about 3.25% as Germany is giving off some very mixed signals about the health of it's economy and recovery.

The banks wouldn't offer 3 year fixed rates between 3.95% and 4.75% if they thought that mortgage rates were going to be over 4.5% for most of this period.

Of course all the predictions is just guess work by the financil people. Do what is most comfortable for yourself but do shop around.
 
Re: I need your point of view....

brian1 said:
but head back down to 2.75% by the end of 2007.
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Where did you hear that? Everything I've heard / read has stated the exact opposite.
 
PTSB Fixed rates as an example....
APR:
5 Year Fixed 4.4%
10 Year Fixed 4.9%

seems to suggest they don't expect rates to go much beyond 3.5 - 4% for the next 10 years anyway. Haven't heard any indications of rates returning to 2.75% in 2007. Though it's not impossible, I think it's speculative at best to say it's "expected".
 
We are in a position whereby we have to take a 95% mortgage and the rate offered for 2years fixed is 4.39%. Is that really high? I dont tihnk we have any huge choice right now though.
 
Newbie! said:
We are in a position whereby we have to take a 95% mortgage and the rate offered for 2years fixed is 4.39%. Is that really high? I dont tihnk we have any huge choice right now though.
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Did you take the time to look at any of the links I posted earlier?

Do you have to take a fixed rate? I doubt it.
 
Re: I need your point of view....

brian1 said:
FYI the market expects the ECB rates to hit 3.25% by the end of this year, but head back down to 2.75% by the end of 2007.

There is even some doubt about 3.25% as Germany is giving off some very mixed signals about the health of it's economy and recovery.

The banks wouldn't offer 3 year fixed rates between 3.95% and 4.75% if they thought that mortgage rates were going to be over 4.5% for most of this period.

Of course all the predictions is just guess work by the financil people. Do what is most comfortable for yourself but do shop around.
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my friend in treasury department of a large bank just checked rates for me
and market is expecting
18 months....split between 3.5%and 3.75%
24 months....3.75%
36 months ...split between 3.75 and 4%
then longer term rates are predicting close to 4% so after rates hit 3.5% next year(or maybe this year) they wont be below that much if any for next decade.
 
On the other hand nobody, not even the treasury departments of large banks, can predict the future with any accuracy.
 
ClubMan said:
On the other hand nobody, not even the treasury departments of large banks, can predict the future with any accuracy.
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True, but their predictions are made with an eye on investing billions, if not tirllions, of Euros, rather than buying a 2 bed apartment in Tallaght.
 
ClubMan said:
On the other hand nobody, not even the treasury departments of large banks, can predict the future with any accuracy.
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The treasury departments dont predict the future,these rates are what the market as a whole expects, of course things change but based on all info in market at present this is best estimate of future rates.
 
Let's not get bogged down in a discussion of what rates may or may not be (in this thread)-it's pure speculation.

The OPs issue is basically this:

1. Do I need to fix at all(a search will throw up loads of discussion, and there is no need to go into it again here). Remember that fixing an interest rate in anticipation of future rises is arguably facile as they are already priced into the rate, and there is an element of 'timing the market' to it.
2. If I do, is 4.25% the best rate I can get ('justifiable' is meaningless as it is a matter of opinion)-the answer to which can be found in the links I posted above.
 
CCOVICH said:
Did you take the time to look at any of the links I posted earlier?

Do you have to take a fixed rate? I doubt it.
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CCOVICH,

I have read some of the posts already but alot refer to NIB and rates for people borrowing 92% or less I think?

And no, you are of course correct, we dont have to take a fixed rate but im afraid that if we take a discounted or tracker that we may regret it at a later date if rates go up....
 
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