martina hennessy discusses mortgage interest rates - rte prime time - doddl

Discussing Mortgage Interest Rates on RTE Prime Time

May 02, 2023

Thank you to the team at RTE Prime Time who asked doddl to join their panel to discuss the impact of increasing mortgage interest rates and what existing mortgage holders can do to safeguard against rising repayments.

To date tracker mortgage holders have been hardest hit by upward movement in rates with the ECB refi rate increasing by 3.5% in just 9 months.

However, those rolling off existing short term fixed rates will be faced with a much higher interest rate environment and need to address this now so that they can consider options.

It is now more important than ever to seek market based advice from doddl when reviewing mortgage rates.

Latest ESRI research shows that 46% of mortgage holders do not compare mortgage offers despite what it say are differences of tens of thousands of Euros in interest savings.

Brokers currently offer lowest market rates and will work with you to switch your mortgage if it makes sense for you to do so. Be sure to contact one of our mortgage specialists to see if you can save by switching, it will certainly be worthwhile.

See link to Prime Time video -> Watch Here

With the next ECB Monetary Policy meeting scheduled for 4th May here are some common questions asked by Tracker mortgage holders

What is the current ECB rate (as at 2nd May 2023) and what do rate increases mean for me.

ECB currently 3.5% was 0% last July

For every 0.5% increase it adds €25 per month to repay

Since July tracker mortgage holders will have seen an uplift in repayments of €175 per month for every €100,000 borrowed

Another 0.5% increase would bring that to €200 per month and c. €2,400 per annum

Should I give up my tracker mortgage?

Average tracker margin to ECB is 1.15% so average tracker rate now 4.65% with further increases expected.

Three rate further European Monetary policy meetings May, June, July by which time analysts expect the ECB to increase to 4.25% or 4.5% which would bring the average tracker mortgage holders rate to 5.65%

Sustained and significant increase by ECB has certainly prompted many to fix and by doing so forsake their tracker rate. To consider:

  • Mortgage balance,
  • Term remaining,
  • Rate on offer,
  • Affordability – can you withstand further increases or do you value security over repayments and willing to forsake tracker to lock down security,

All very individual. Last trackers in 2008 so 15 years ago at a time when terms were out to 40 years so many have 15-25 years remaining on their tracker.

Trackers long thought of as being valuable as you are linked directly to ECB rate as opposed to Irish banks prevailing rates.

It is important to get advice if considering moving off a tracker rate as once you move off your tracker it is foresaken, you will not get it back.

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