Rising fuel costs and energy bills in addition to record high inflation, is putting increasing pressure on already-stretched households
Nervous homeowners in Carlow and across Ireland are bracing themselves for increased variable interest rates are expected to switch providers and seek fixed rates to cope with increased home repayments.
Many mortgage holders are switching to lock down security over repayments according to an expert, after new figures from Banking & Payments Federation Ireland (BPFI) reveal a 28% increase in mortgage switching activity year on year.
News that house repayments are set to increase during a cost of living crisis has created further worry for hard-pressed homeowners
Rising fuel costs and energy bills in addition to record high inflation, is putting increasing pressure on already-stretched households.
“One key factor driving the surge in switching presently is the expectation that rates will start to increase in the near future," said Martina Hennessy, managing director of doddl.ie.
“With concerns also mounting about the rising cost of living, mortgage holders are looking to lock down security over repayments.
“For most homeowners, their mortgage is their largest outgoing and if you are exposed to an increase in interest rates it can have a big impact on your pocket.
Hennessy says that the main way to safeguard against rate increases is to switch to a fixed rate with some very strong medium to long-term fixed rates available right now.
“Fixed rates have been very popular over the last five years as they have generally been set lower than variable rates.
“84% of new agreements were on fixed rate terms, according to the Central Bank and we are seeing very high demand for these at doddl.ie.
“Terms of 7 and 10 year fixed are proving more popular in the last 18 months as they have started to be priced more competitively and are being offered more widely. There are also fixed mortgage terms available from 1 to up to 30 years.
Speaking of mortgage holders currently in the middle of a short term fixed rate and who may be concerned about what level rates will be when they roll out of their current arrangement, Hennessy says:
“It is worth calling your mortgage lender to see if there would be a break penalty and, if it makes financial sense to switch, you should lock into a longer term fixed rate to provide greater security.
“Rates are currently as low as they have been for 14 years so now is the time to review rates, in particular fixed-rate options.
“Don’t just accept the first rate offered to you, look to achieve the lowest rate available to you to avoid paying more than you need to during the fixed term,” Ms Hennessy advised.
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