Borrowes advised to cap interest

BORROWERS have been warned that they should now be considering the impact European Monetary Union will have on interest rates, particularly if they are thinking about converting to a fixed rate loan.

Mr Alex Brett, assistant director at Lombard Property Finance, told delegates at a property conference yesterday that long term interest rates could drop significantly in the run up to EMU, if events go to plan.

"While there is uncertainty surrounding EMU, one option might be to cap your interest rate," he said.

Investors will have the security of knowing what the maximum rate will be over the next five years but also the possibility of gaining from lower variable rates" according to Mr Brett, whose company sponsored the conference.

Another speaker, Mr Pat McArdle, head of economic planning at Ulster Bank Markets, warned that businesses should now start preparing for the introduction of EMU, putting strategies in place to deal with the conversion to the euro.

I believe that with the political will that exists right across Europe, it will start on time, and that Irish businesses should start thinking about the single currency now, Mr McArdle said.