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Tracker Rate after fixed

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  • 29-07-2010 10:40pm
    #1
    Dublinarea
    Registered Users Posts: 32 ✭


    Hi i would appreciate any advice from anybody in the know.

    I am in a fixed rate which i left a tracker for a few years. The tracker rate was .75% above the ECB. I found out today that i am eligible to go back on the tracker however the rate will now be 1.5% above the ECB.

    Can they set the rate this high or should i be offered it at the previous rate?

    The girl on the phone said the tracker rate is 1.5% now and kinda implied that it may be increased. So it may be worth buying out to lock in at the lower rate. Currently my rate is 5%.

    Cheers


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    #2
    Drumpot
    Registered Users Posts: 19,306 ✭✭✭✭Drumpot


    Dublinarea wrote: »
    Hi i would appreciate any advice from anybody in the know.

    I am in a fixed rate which i left a tracker for a few years. The tracker rate was .75% above the ECB. I found out today that i am eligible to go back on the tracker however the rate will now be 1.5% above the ECB.

    Can they set the rate this high or should i be offered it at the previous rate?

    The girl on the phone said the tracker rate is 1.5% now and kinda implied that it may be increased. So it may be worth buying out to lock in at the lower rate. Currently my rate is 5%.

    Cheers

    With banks its always about reading the small print. In truth I am not sure, I would request a copy of the original agreement where it states that theh tracker rate will be decided on when your fixed rate finishes.

    Also, ECB +1.5% is still a fantastic deal, dont let this offer go as you will not get anythingt remotely near this figure. .


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    #3
    adcom
    Registered Users Posts: 36 ✭adcom


    Yes, the banks can do this. When you enter a fixed rate is is considered to be a short term contract. generally the fixed rate agreements would state that at the end of a fixed rate you will be offered the banks new rates whatever they may be.

    In addition the tracker you were on orginally may have been based on loan to value and these rates have changed in the last year or two.

    Contact the bank again and ask them what your rate of .75% (which by the way was amazing) was based on. Often as well tracker rates were based on how much was owed- i.e. someone with €501K left to pay back got a better tracker rate than someone with €499k left to pay back. Cruel but true. Also they were based on the loan-to-value of your mortgage. These rates have changed.

    But in essence yes, the bank can increase their margin on tracker rates. However if you had not fixed your mortage (and therefore "Broke" your tracker contract) you would still be on the .75% (unless the above applies)

    Hope helps! Contact you bank for clarification! And remember- you arer lucky to be offered a tracker at all at the moment and if you go onto 1.5 then even if teh tracker rates chnge your tracker shouldnt. Contact the bank to coinfirm this though- i left the sector 4 years ago and things may have changed!


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