Focus on ‘limited choice’ in Irish fixed rate mortgages as ECB debates rate hikes

Irish mortgage holders face ‘limited choice’ to take advantage of long-term real fixed rates and prepare for likely interest rate hikes by the ECB this year, the senior mortgage broker has said Michael Dowling.

Only two lenders, Finance Ireland and Avant Money, offer a full range of 15+ year fixed rates at rates below 3%, while the major banks continue to offer fixed rate home loans over much longer periods. short, Mr. Dowling said.

“People are aware that rates are going up and now is the time to negotiate a long-term fixed rate or switch,” he said.

The remarks come after the ECB no longer ruled out following other central banks in raising interest rates to tackle global inflation.

Goldman Sachs said it expects interest rate hikes of seven quarter-points from the US Federal Reserve this year, up from its previous forecast of five and the update. of its forecast after Thursday’s US inflation data.

Consumer prices in the United States jumped 7.5% last month, marking the largest annual increase in inflation in 40 years, which has further increased pressure on the Fed to increase its limits. rate more aggressively.

HSBC US economist Ryan Wang said the bank now expects the Fed to accelerate rate hikes more than expected, with a 50 basis point hike in March and four more rate hikes in March. a quarter point in 2022.

Traders are betting that the ECB will be forced to end its eight years of negative interest rates, sending the euro higher.

ECB policymakers, including President Christine Lagarde, have since adopted a more dovish tone. But many traders believe the shift in mentality is evident and markets need to catch up with an ECB finally poised to tighten, even if not as fast as its rivals.

“Anyone expecting the ECB to completely undo the hawkish policy change announced by Ms Lagarde at last week’s meeting will have been disappointed by the many policy statements this week,” said Chief Economist Andrew Kenningham. for Europe at Capital Economics.

“Admittedly, Ms Lagarde herself struck a more balanced tone with EU parliamentarians and told the media that the ECB planned to ‘shift into high gear in stages’ rather than take a handbrake ride. “, did he declare.

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