What advantages to variable mortgages have over trackers?

Bottle_of_Smoke

Now I do know what a tracker mortgage is, I'm just basically wondering - why would someone choose a standard variable over a tracker ? Any advantages?

stepbar

Tracker mortgages are generally only available to customers who have a low property LTV (Loan To Value). E.g. a customer may have an existing mortgage of 100k on a property valued at 500k. LTV => 20%. The better rate is often a reflection of the reduced risk; there is a v.good chance that if the customer defaulted, there would be enough equity available to pay off the loan in full.

In short, customers often don't have a choice as to which type of mortgage they can apply for.

Hitchhiker's Guide to...

can't think of a good reason to not choose a tracker mortgage if you are allowed one, provided the margin is low.

homer911

Tracker rates will usually go up automatically within 3 days of an increase in standard ECB rate - equally they come down as quickly. Variable rate changes are independently decided by the relevant bank - In the case of the recent market turmoil, the interbank rate went up causing banks like AIB to increase variable rates, even when the standard ECB rate was unchanged

On balance, I'd opt for tracker wherever possible (Fortunately have just cleared my mortgage after just 12 years) - had a tracker myself for the last 6 years