My Mortgage

The current ECB rate stands at 3%, which is quite a hike from the rate in May 2013, which was 0.5%. However, to put this in perspective, the US Fed Rate is currently 4.75%, the Bank of England rate is 4%, and the Australian Central Bank rate is 3.35%.

The ECB rate is predicted to rise to 3.4%, with a downward trajectory in 2025 to below 3%.

In January 1993, the Irish Central Bank had an eye-watering rate of 25% but the average from 1991 to 2023 has been 3.63%.

This proves that interest rates will always be cyclical, and being tied to the ECB gives us the comfort of knowing that the European mainland would not have a historical tolerance for sustained high rates.

While having a fixed rate gives the mortgage holder the comfort of being able to predict their monthly outgoings, there are disadvantages.

A variable rate allows the borrower a much greater degree of flexibility. For example, if one finds themselves with a higher disposable income, they can increase their monthly repayment and thus reduce their mortgage term, or if they find themselves with a lump sum, putting this against the mortgage can either reduce the monthly payment or reduce the mortgage term.

Therefore, before making a decision, weigh up the pros and cons and speak to your mortgage adviser before making a decision.