Is this a good deal - 20 years fixed @ 2.6%

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02 May 2015 08:31 by adiep Star rating. 5 posts Send private message

What do people think, I can have 20 years fixed at 2.6% or 25yrs at 2.6% FIXED

 

No setup fee and can pay off up to 20% a year without any fee.

 

Seem ok?





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02 May 2015 10:15 by Mickyfinn Star rating in Spain and France. 1839 posts Send private message

It depends how you think interest rates generally across the Eurozone will fare over that time period. Remember 2.6% is over the odds now so you are paying up front for jam tomorrow when they will inevitably rise. However given the state of the world economy that could be some time. Even then interest rates (Euribor) of around 2.6% -3% will likely be the norm. So the deal you have been offered is OK but lock yourself into it and there is no room for movement in the future.



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02 May 2015 18:54 by adiep Star rating. 5 posts Send private message

The best of the best deals right now only gives 1.25% above Euribor, which works out to be about 1.5% - however to get that rate (variable) you need to take the banks home insurance, pension pan and life assurance - which is a fortune.

If someone was offering 0.25% above Euribor variable that would be a nice deal, but when the best variable rate is only 1% below a 20 year fixed, seemed like a no-brainer. 

I looked that the historical average of Euribor, its currently at about 3%, so 1.25% above that - 4.25% would be the average over the 20 years I reckon if the past is like the future... 

At 2.6% im hoping inflation eats into that if they get inflation back up to 1.5 - 2%, in which case I should be onto a winner..

 

 





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19 May 2015 17:54 by jhassman Star rating. 1 posts Send private message

It seems like a good deal and doesn't expose you to future interest rate increases. What bank is offering that? I am also looking for a mortgage.





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19 May 2015 19:03 by Hephaestus Star rating in The Peak District Na.... 1237 posts Send private message

Well that's belt and braces plus a length of string, just incase the other two fail, I would go for it, how much lower could interest rates go in the next 20 years? 



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19 May 2015 23:35 by Sanchez1 Star rating. 853 posts Send private message

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