Mortgage interest rates reach a 3-year high and more hikes are on the way

Mortgage interest rates in Ireland soared to a 3 year high in January. The latest data from the Central Bank shows the weighted average interest rate on new Irish mortgage agreements at end of January was 2.93%, up from 2.69% in December. This leaves rates in the Republic at their highest level since October 2019.

The next ECB Meeting is on the 16th of March, and another 0.50% hike is to be expected. This will be the 6th increase bringing the ECB rate from 0% to 3.50% in 8 months and the likelihood is there are more hikes on the way.

315,000 mortgage holders are currently on a tracker mortgage or variable rate and over 400,000 mortgage holders are on fixed rates. Of the 400,000 borrowers on fixed rates, 60% of these customers have less than 3 years remaining on their fixed term agreement. This means they could potentially be rolling on to a rate of 5% or higher when their contract expires.

If you are a Bank of Ireland existing customer, you are in a fortunate position as their current 1, 2, 5 & 10 year ‘existing customer’ rates are the lowest rates on the Irish market at present.  As a mortgage holder with this bank, you could renegotiate your fixed rate now and secure the same rate as their new business offering or lower.

To do this you will need to contact the Customer Relationship Unit on 01 6113333, quote your mortgage account number and request your options to be posted to you for consideration.

As an existing customer with less than 3 years remaining on your fixed rate, we would suggest that you evaluate your mortgage options to see if it is worth breaking free from your current contract early.  If you decide to opt into a new contract, there is very little required on your behalf. Simply sign the requested paperwork and return in the time period allowed. Of course, we advise that you check first that you have no early exit penalty charges but from previous cases we have seen these charges to be nil.

By doing this you will have achieved the lowest rate on the market today, secured a longer-term fixed rate period, incurred no legal or valuation fees and no mortgage support paperwork requirement. 

At Biograph Wealth Advisors we have an experienced mortgage advisory team who are available should you require a sense check on the rates offered by your existing provider. This exercise has proven to be valuable to our clients over recent months.