Buy 10-year mortgages to beat ECB, says expert

First time and existing borrowers should buy 10-year fixed-rate mortgages as the ECB prepares to hike interest rates by the end of 2019, a mortgage expert has said.

Michael Dowling, chair of the mortgage committee at the Irish Brokers’ Association, said he saw no logic in buying a two- or three-year fixed rates when those rates would expire just as the ECB was likely to be raising interest rates. He said a handful of lenders currently offer rates of around 2.9% fixed for 10 years for loan-to-value ratios of up to 80%, and two lenders offer a fixed rate of 3.5% for 10 years at a loan-to-value ratio of 90%.

“I am saying that borrowers should be looking at 10-year rates because they represent good value and because there is only one way that [ECB] rates can go,” he said. Following a meeting of the ECB this week, analysts predict the central bank will make its first interest rate increase, in late 2019.