mortgage interest rates

[resjudicata]

@boagz57 The expectation right now is the ECB will not raise interest rates any higher. This is obviously not guaranteed but if this is the case they have peaked and will only go down from here. Again obviously not guaranteed as who knows what the future holds and how long it will take for them to go down again. My bet however (not recommending this to anyone!) is to stick with my relatively low rate for as long as I can and lock in a hopefully good rate end of 2024 / early 2025. Doing a 20 year fixed when rates are at peak does not seem like a good idea to me.

 

[boagz57]

@resjudicata was listening to eoin mcgee podcast the other day and he was chatting with an economist. they reckon that rates will stabilise at 4% in a year or so for the forseable

 

[norwegianvikinh]

@boagz57 I doubt it will hold at 4%. They love printing money & growth too much.

 

[boagz57]

@norwegianvikinh u think higher?

 

[resjudicata]

@boagz57 Lower. 4% stifles easy money creation.

 

[roseofsharon38]

@boagz57 Similarly on year 2 of 5 fixed at rates that likely won’t be available when fixed ends.

Because my current circumstances allow I’m saving with a view to paying down/off at the end of the fixed. If yours allow, you could be putting extra aside now to reduce the principle.

If it’s allowed I’d be using the savings to pay off the car loan since the interest is likely higher than you’d receive just saving and also assuming 18K would be enough savings should things go wrong

 

[boagz57]

@roseofsharon38 yes, I will prob pay off the car. just hard to part with the cash. its like a security blanket!

 

[roseofsharon38]

@boagz57 Oh I know, but you can add those repayments to your savings and it’ll grow again quickly!

 

[boagz57]

@roseofsharon38 ya, I guess I will have another 500 a month to throw into cash savings and get a good emergency fund going

 

[alltimeis]

@boagz57 Do you think you might get a small raise each year? After 5 years it might be significant. That's my plan

 

[boagz57]

@alltimeis I'm not sure. any raise we get will be small, maybe ten euro a week extra a week after tax between us!

 

[kitcatrn]

@boagz57 With 20 and 25 years before retirement, could you not work towards a promotion? If you’re not expecting much by way of increments one or both of you must be near the top of your salary scale. I know it’s not easy but 3 years is a decent lead time to prep for a competition/promotion.

 

[jdsenn]

@boagz57 We were on one of those lovely low green rates until this month. Now we’ll be paying an extra €200 a month I’d stick with the low rate for another 3 years.

 

[boagz57]

@jdsenn ya i suppose it makes sense to stick it out. hopefully the rates come back down!

 

[resjudicata]

@boagz57 That's guaranteed, the only question is when.

 

[jimoski]

@boagz57 I recently ringed to learn my potential fixed after mine is ended. I'm on year 4 of 5 fixed at 2.85%. They told me fixed is 5 and variable is around 4.15 now lol.

I guess its time to check the mortgage switch.

 

[boagz57]

@jimoski that interest rate increase will make a massive difference to your repayments I imagjne

 

[jimoski]

@boagz57 I hope I can switch and see better options

 

[shuffle]

@boagz57 If my calculations are correct, you're netting €76k/annum or €6.3k/month. So I'd be surprised if you'd be anywhere close to being in financial stress with only a €1.4k repayment. I would think you'd have plenty left over to save and invest. What are your typical monthly outgoings?

Also, pay off that debt on the car with your savings! That interest rate would be far higher than the mortgage.

 

[boagz57]

@shuffle would you advise that we continue with avcs? I will prob pay the car loan I think. I'm currently putting 125a week directly from wagesinto savings account and 125 car loan off my wages too. they are paid automatically from payroll.

monthly expenses

mortgage is 1k a month,

car loan 500 a month,

avcs 600 a month(costs 360 with tax relief),

diesel 400 a month,

groceries including baby stuff 1000 a month,

insurance and tax prob 120,

elec and gas 200 a month,

phones 26 a month,

broadband 50 a month,

pet food and groom 50 a month,

cash savings/ sinking funds 1k approx

family health insurance 360,

there are other expenses too that I prob left out here like clothes, medicine, hair appointments etc.