Thursday 22 March 2018

Charlie Weston: Lock in now or you'll pay the price later

Charlie Weston

Charlie Weston

HOMEOWNERS vulnerable to the rising mortgage rates have been warned: you have seven days to act.

If you are a new buyer, or are coming off a fixed rate, or are on a standard variable rate then you should lock in now.

This is especially if you can get a fixed rate for less than 4pc.

By this day week Bank of Ireland and EBS will have followed AIB in hiking their standard variable and fixed rates for new and existing customers.

Permanent TSB has already twice increased its standard variable rates.

At the moment, and for the next seven days, Bank of Ireland's fixed rates are the best in the market.

The bank has around 200,000 residential mortgage customers, or one in four of the homeloans in issue.

Until next Friday it will offer a three-year fixed rate of 3.39pc for existing customers who want to lock in. Its five-year rate, for existing customers, is 4.25pc.

The rates for new customers are even lower, and are also the best in the market.

New customers of Bank of Ireland can lock in for three years at 3.39pc, if they act before Friday. After that the rate shoots up to 3.79pc.

It is estimated that as many as 300,000 people have standard variable rates.

Many of these want the security of locking into a fixed rate but they are encountering two problems; the rates on offer are often higher than 4pc, and they are unable to switch to another lender to get a better rate.


This is because the switcher market is effectively closed off to most people, with only KBC Homeloans and EBS/Haven prepared to take on switchers.

Those who can switch can get a three-year fixed rate of 3.69pc with KBC Homeloans. Haven has a three-year deal of 3.54pc, but EBS's fixed rates for longer than two years are more than 4pc.

However, if you are in negative equity you will not be able to switch and will have to look to your own lender to see what fixed rate they offer.

The following lenders have some fixed rates of less than 4pc (either three, four or five years): Bank of Ireland, AIB, Haven, ICS, Irish Nationwide and KBC.

The time to act, if you are considering fixing, is now.

Irish Independent

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