We have been advising people for longer than we care to remember to opt for a long term fixed rate if they are on a standard variable (people on trackers should not take the same decision lightly). The move comes as part of an overall shift towards repricing risk and ensuring that margins on loans are appropriate versus the market, the need for operational profit and to act as a buffer towards impairments which are arising as other borrowers who cannot pay fail to meet their mortgage obligations.
The increase will affect both existing and new customers, our guide and opinion is contained in a release we have prepared (click on the image to the left).
The only option presently available in our opinion for people on a variable rate mortgage with Bank of Ireland is to call the bank this week and enquire about getting a fixed rate immediately, the changes only come into effect on the 16th of April, so the window of opportunity is closing rapidly.
New customers are in a bind as the offered rate is based on your closing date, however, for existing customers there are some definite ideas – your variable rate will be going to 3.2% you can lock into a 2yr fixed at 3.15% right now (meaning you’ll be better of instantly), if you choose to opt for longer lasting protection there is still good value in the 5 year price. Bear in mind that this is the ‘first’ and not the ‘last’ margin rate hike you can expect, so don’t be turned off by the short term increase, it may well prove to be the cheapest choice of all!