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I am on a variable rate of 4.7% on a repayment mortgage and wonder if I can get a better deal by getting a fixed rate. I feel that the rate is quite high compared to those on trackers and am not sure what the best thing to do are. The fixed rates are also high but if interest rates start creeping up in the next five years then it might be good. I’m just looking to sound people out who know the market better than I do.
Deirdre P, Dublin
Fixed rates are generally coming in at between 3.5% and 5.1% in the market. And with two more interest rate cuts expected within the next six months, it may not seem an attractive time to switch from variable to fixed, especially as the banks are under pressure to pass the rate cuts on to their customers.
A number of factors apply to the rate you will be offered – the ratio of the loan to the value of your home – LTV and whether you are an existing or a new customer of the bank. New customers generally get preferential rates because the bank is trying to buy your new and long term custom.
Bank of Ireland, for example, is offering new customers fixed term rates of 4.4% and 4.8% on three and five year fixed terms. Existing customers are being offered rates of 4.5% and 5.11% for the same period – all loan to value rates apply.
Its variable rates look a lot more attractive – all under 3.9% depending on the LTV.
Frank Conway, personal debt adviser at www.moneycoach.ie, believes it is a good time to fix. “The market is so volatile at the moment, we don’t know what is going to happen. For security and in terms of managing your finances, it may be a good time to fix.”