Last weekâ€™s disclosure that Bank of Ireland had withdrawn the only 20-year fixed rate mortgage in the Irish market has been explained as a result of a lack of consumer appetite for long-term fixed rate mortgages.
It turns out that borrowers werenâ€™t exactly queuing up to pay 5.8 per cent APR over 20 years when the standard variable rate mortgage was priced at just 5.4 per cent.
But Iâ€™ll bet there would be plenty of Irish consumers willing to pay for the security of a fixed rate mortgage if the pr ices charged were comparable to what is charged in France.
Last week, you could get a 20year fixed rate mortgage in France for just 4.55 per cent, compared with the best available variable rate of 4.40 per cent, according to French price comparison website www.meilleurtaux.com.
Put another way, the French are charging their customers a premium of about 15 basis points for the privilege of fixing their mortgage over 20 years, whereas Bank of Ireland was charging a premium of about 40 basis points in July, while the premium had earlier been even higher.
**Fixed-rate: the French lesson **
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