PIBA warns mortgage holders that lenders could increase interest rates
The Professional Insurance Brokers Association (PIBA) said over zealous lending criteria is blocking first-time buyers from entering the mortgage market at a time when properties have shrunk in value. It also advised mortgage holders on variable rates to consider fixing them for longer periods.
“Mortgage holders would be well advised to consider fixing for periods of five years or longer. Fixing at a good rate for longer terms gives security and enables better planning. It’s likely that the low cost fixed rates on offer now will rise at the same time that variable rates increase, meaning you may miss out on taking advantage of such low rates,” said PIBA’s director of mortgage services, Rachel Doyle.
She added: “It is increasingly difficult for first-time buyers to get a foothold in the market and this is happening at a time when properties are much more affordable.”
Permanent TSB came under fire for increasing its variable mortgage rates by 0.5% last summer. It said, towards the end of the year, while there were no plans for a further increase, it could not be ruled out.
Last autumn, Fianna Fáil TD Frank Fahey said a key aspect of the Irish economy recovering would be for domestic interest rates to be kept in line with the ECB rate as much as possible.
PIBA also warned that people still on tracker mortgages, which are tied to ECB rate movements, should “resist attempts by lenders to surreptitiously move them on to less attractive variable rates”.
