Is it time to set your mortgage interest rate?

As the European Central Bank prepares to raise interest rates this summer, is it time to consider fixing your variable or tracker interest rate?

Daragh Cassidy, head of communications at, said for most people the answer is yes.

Speaking on RTÉ’s Morning Ireland, he said there was at least good value for money ‘by Irish standards’, with 10, 15, 20 year fixed rates which might not be there in some months.

“Repairing for such a long time can give you peace of mind for the next decade that no matter what happens in the world, your mortgage payments won’t change. That certainty is going to mean a lot to people.”

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The trailing rates are tied to the ECB rate, so when the ECB rate rises, the trailing rates also rise.

“If you have a tracker mortgage and are paying a 1% margin, you’re probably better off sticking with the tracker for now because when the ECB starts raising rates it’s unlikely to be by much. – maybe 1-2% more the next two years, so if you have a tracker you’ll still only pay 2-3%.”

This means that if someone, for example, has €200,000 on their 20-year mortgage, if the ECB raises rates by 0.5%, mortgage holders face an additional €45 per month. If the ECB raises its rates by 1%, that’s double.

“It’s not a huge amount of money to start with, but the question is how far will the ECB continue to raise rates? How far will it go?” he said.

Cassidy advises people to consult a mortgage broker and get good professional advice if they are considering fixing their mortgage interest rate.

“There are potentially breakout fees if you want to get out of a fixed rate sooner, so fixing may not be for everyone, but it looks like it will be the right option for most people.”

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