Experts in the mortgage market have warned that the European Central Bank plans to raise lending rates two more times before the end of the summer. These rate hikes could result in higher monthly mortgage payments, potentially adding up to €200 per month to the average Irish mortgage. If you currently have a variable rate or a fixed rate mortgage with less than two years left, it's crucial to act now to avoid the impact of these hikes on your mortgage repayments. By switching your mortgage and securing a long-term fixed rate at the best available rate, you can safeguard yourself from rising mortgage costs.

A fixed rate mortgage is a type of mortgage where the interest rate remains the same for a set period of time. Typically, fixed rate terms range from 1 to 10 years, although some options may extend up to 25 year, or even up to 30 years as offered by Avant Money.

Short-term fixed rates initially offer lower monthly repayments, but after the short-term period ends (e.g. 3 - 5 years), the rates can change. Long-term fixed rates provide low fixed repayments for the entire term (e.g. 15 - 25 years).

Given the current trend of increasing interest rates, it is advisable to consider fixing your mortgage if you are on a variable rate or approaching the end of a fixed rate period. By fixing your mortgage rate, you can protect yourself from potential future interest rate hikes, save thousands of euros in the long term, and avoid the stress of adjusting your budget to accommodate higher mortgage repayments.

Deciding between short-term and long-term fixed rates depends on your specific circumstances and the level of predictability or flexibility you want for your repayments throughout the duration of your mortgage.

If you, like many other households, are in a position where your finances are unpredictable or strained because of interest rate increases and general cost of living increases, you may prefer a longer fixed rate. By fixing on a long-term rate, you can gain certainty and stability with your mortgage repayments and feel less strain on your household budget. However, if you see a house move in your future, a shorter term may be preferable to avoid early redemption penalties.

When making the decision to switch to a fixed rate, it is important to keep in mind that if you have a fixed rate mortgage and interest rates decrease during the fixed period, you will not benefit from lower monthly repayments. However, in light of the market trends, such a scenario is unlikely in the near future. So, fixing your mortgage provides the assurance that your repayments will remain unchanged.

To begin your mortgage switching journey, start by using our Switching Mortgage Calculator. Our mortgage calculator will provide an estimate of the potential savings you could achieve by switching to a fixed rate. We offer helpful resources that explain the switching process in detail, allowing you to make an informed decision.

Once you have gathered all the necessary information, schedule an appointment with us to receive personalised advice on the best options for your situation.