Is the end of low interest rates near?
It’s not far off if today’s newspapers are to be believed.
According to the reports the days of 0% ECB rates is set to end in the not-too-distant future, which will lead to an increase in mortgage repayments for the 350,000 Irish households with a tracker mortgage and also, more than likely, for many variable rate customers as well.
Interest rates haven’t increased since 2011 with mortgage holders on tracker rates saving hundreds of euro per month as the rates were steadily cut down to a record low of 0%.
Prospects of the rate increases returning come after the head of the German Central Bank Jens Weidmann said that improving economic conditions in the Euro area could justify an ECB rate hike.
The one saving grace is that it could take another two years for this to happen.
The Bundesbank president said that conditions, including rising inflation in Germany, could now justify more normalisation of interest rates by 2019.
With that in mind should you be preparing for the possibility of higher interest rates.
Analysts expect an increase next year of 0.5% and possibly even 1%.
This could mean that first-time buyers might be better opting for fixed rates when take out a loan.
Or, are they as well holding off on a purchase?
Philip Lane, the Governor of the Irish Central Bank, has warned that prices – which have been rising steadily since 2012 – could go into reverse.
It all gives plenty of food for thought.
What are your thoughts on it…
- Could you afford to pay more for your mortgage?
- Would you consider overpayments to avail of the current low interest rates?
- Do you expect rates to rise in the next few years.
Have your say below…