Fixed rate loans a double-edged sword for homeowners
In Ireland and Britain we tend not to fix compared with the US and Europe.
The French, Germans and Spanish in general tend to fix, but the European Consumers Organisation said it has no view on the matter.
Fixed rate mortgage deals could be the way forward.
In Britain long-term fixed rate mortgages could be a blessing for homeowners as the cost of borrowing continues to rise, says financial information group Moneyfacts in Britain.
Home loans fixed for 10 years or more are looking increasingly attractive in the current climate, it claims.
However, mortgage broker Charcol said now was not the time to take out a long-term fixed mortgage.
"It looks as if base rates are going to peak at lower-than-expected levels," said Charcol’s Ray Boulger. From an Irish perspective Sarah Wellband of Rea Mortgage Services said over 90% of all mortgages taken out by her clients are still variable.
Getting involved in a fixed mortgage over three years at this stage involved an interest rate of 4.35%, she said.
That assumes ECB rates will rise by close to 1.5% in the next three years.
It was not obvious to her that fixing now would save borrowers any money over the period, she said.
