Many homeowners are still benefiting from low interest rates despite the recent rate rise by the European Central Bank.
Several lenders have yet to raise their lending rates in response to that rise and are probably waiting for the next move from Frankfurt which is expected at the end of March or April.
As a result variable interest rates below 4 per cent are still available from Tusa, Bank of Scotland and AIB. There are discounted variable rates below 4 per cent available from Bank of Ireland, EBS, First Active and TSB.
In contrast, Irish Nationwide, Irish Permanent and Irish Intercontinental Bank are all closer to 5 per cent at 4.64 per cent and 4.65 per cent. Surprisingly EBS is one of the more expensive lenders at the moment with its variable rate at 4.5 per cent. However, it will be some time before the dust settles and all the lenders react to the latest hikes.
Fixed rate loans are not particularly good value. One year fixed rates now vary from 4.2 per cent at TSB to 5.3 per cent at the most expensive EBS. It is true that interest rates are on the way back up but few observers expect rates to rise by more than one percentage point, which should mean mortgage rates around 5 per cent at the end of the year.
Three year rates are also far higher than several months ago and borrowers have missed the best deals that were on offer. But there is still a very large variation in three-year loans. Once again TSB, Tusa and AIB are cheapest, offering rates of 5.5 per cent, 5.7 per cent and 5.75 per cent respectively. Again EBS is among the most expensive with a three-year rate of 6.3 per cent along with IIB. Irish Nationwide is again close behind with a rate of 6.25 per cent.
EBS has been hit by the greater competition in the markets since Bank of Scotland arrived late last summer. Its problem is that it has to pay savers a good return, particularly in an era of such low interest rates. It simply cannot afford to squeeze its margins the way a telephone and mortgage broker based business like Bank of Scotland can.
Five year rates are more expensive again and few people are taking them out. However, if you are very sensitive to rising interest rates this option could be worth thinking about. Most five year rates are around 6 per cent so you would have to believe there is a good chance that mortgage rates will rise to 7 or 8 per cent over the next few years before they would make sense. The cheapest five year deal is National Irish at 6.05 per cent with EBS and IIB most expensive at 6.7 per cent and 6.75 per cent respectively.
All of this detail and much more is now available at the touch of a button on Irish Mortgage Corporation's website which is at www.irishmortgage.ie.
This allows you to rank the lender through nine product categories from discounted variable to 10 year fixed rates and through three different criteria including the nominal rate which is quoted above, the cost per thousand pounds borrowed and the APR.
The service also provides a wealth of information on various mortgage packages and news as well as the latest offers from all the main lenders. There is also an on line application form which saves going through personal information over the phone and an approval-in-principle facility. Of course IMC does not offer mortgages itself so this has to be taken with a grain of salt. But a spokesman said it knows the criteria used by the lenders and thus can gauge quite accurately.
Borrowers should also remember that IMC gets commission from lenders for placing mortgages and some pay more than others while others do not pay any at all. However, the best buys section is certainly very useful.
