Mortgages: Why Irish borrowers will remain exposed to interest rate swings
Smart Money: In many EU countries, borrowers can fix rates cheaply for long periods
The Central Bank is warning that funding and regulatory pressures could lead to a rise in longer-term fixed rates in future
The bulk of new mortgages being taken out now are fixed-rate products. Most borrowers are fixing for relatively short periods of time, though there are also now offers and new competition for longer-term fixed rate loans of up to ten years.
However, a new Central Bank paper has raised questions about whether the cost of these longer-term fixed-rate homeloans may in future have to rise. This is important, as it is about whether we will ever be able to move away from our current mortgage model which leaves borrowers exposed to most of the risk.