ICS Mortgages are increasing their fixed and variable mortgage rates this Saturday.
“What does this mean for me and will other lenders or banks increase?”…
With ICS’s fixed rate increasing by 0.5pc across all loan to value bands and variable rate increasing 1.25pc… This won’t be the last increase by lenders or banks.
While we’ve enjoyed low interest rates for a long time, due to the rise in inflation – lenders are now increasing rates for their customers.
Banks are also likely to follow suit and increase rates after October. With September’s ECB statement explicitly stating more rate hikes would be needed, and markets continue to expect at least another 50 basis points at the ECB’s meeting in October.
We covered ECB rate hikes back in August, recommending to switch to the longest term fixed rate possible.
But we still recommend switching now, as soon as you can. If you’re still not sure if switching is for you have a look at our articles Why You Should Consider Switching Your Mortgage Provider and Is Switching Mortgages in Ireland Still a Good Idea?
“Why?”…
- There is going to be more ECB rate hikes before the end of the year.
- These rate hikes will transfer to the customer for certain banks and lenders. This is down to the discretion of the lender, but by switching now you’re guaranteeing that your payment remains the same for your new fixed period and not taking the chance that your lender “might not” increase your interest rate
- More lenders are likely to increase their rates.
- Delaying your application means you could potentially miss out on the current fixed term rates available due to lender delays.
How will this affect your mortgage rate?
If you’re on a variable rate –
Any increases by the ECB will be transferred onto you if this is decided by the bank or lender. This makes it a gamble if your lender is going to increase your Mortgage repayments or not.
Fixing your rate now for the longest term available to you ensures you’re paying the lowest you possibly can for your mortgage for your new 5, 10 or even 15 year term.
Having a variable rate means you have no certainty of your outgoings and with inflation so high, choosing to move to a fixed rate provides you financial peace of mind when it comes to your mortgage.
If you’re on a fixed rate –
Let’s say you’re on a 5 year fixed rate with 1 year remaining. You might have a decent rate and repayments now, and it might even seem better than what’s available on the market currently.
But the problem arises when your fixed rate ends…
There will be more increases from banks & lenders. Meaning that the lowest fixed rate in a year’s time will be a worse deal than you can currently get. The money saved over the new fixed term if you switched now is much more than any potential savings you might make over the next year until your term ends.
It’s certainly worth exploring exiting your current fixed rate as in our experience we’re seeing a lot of customers being able to exit a fixed rate with no penalties or fees.
If you are currently in a short term fixed rate, we advise contacting your bank to see if there is an exit fee and then of course – contact us for advice on proceeding with your switch – we deal with every major lender in Ireland.
If you’re on a tracker mortgage –
All ECB rate hikes will be transferred onto the customer. With ECB rates after increasing on the 14th of September to 1.25%, this won’t be the last increase –
As I mentioned above, In the ECB’s September statement they explicitly stated more rate hikes would be needed, and markets continue to expect another 50 basis points at the ECB’s meeting in October and more potential increases into 2023.
Make the smart choice and switch today by calling our award winning mortgage advisors for free on 1800-828-800 or apply for your new mortgage entirely online:
