Tracker Mortgage query

brazen_dude

Is it true that banks in Ireland soon gonna scrap tracker mortgage? Does it affect the people who are already on the tracker? pls post your opinions...

djk1000

I don't know what a tracker mortgage is???

unclebill98

If your on a tracker your on a tracker. I would think any bank that removes this is just going to loose a lot of customers to which ever bank does it.

It would be a very negative thing for a bank to do imho

brazen_dude

Banks add some percentage (like +0.75% or +0.5%) to ECB lending rate... If ECB lending rate is 4%, banks offer it at 4.75 or 4.5% depends on your mortgage to value ratio.... As with my experience, ecb tracker rate is usually cheapest mortgage available in irish market... compared to variable and fixed rates...

homer911

Banks are withdrawing Tracker Mortgages as a product because EURIBOR is no longer tracking the ECB rate. They used to track each other, +/- 20 basis points. The Credit Crunch has pushed up EURIBOR while the ECB rate is unchanged. As banks have most of their funding linked to EURIBOR, they are not making any money on existing trackers

Ogham

Existing customers on trackers will not be affected - just people taking out new mortgages will have either less trackers available or higher rates .The lenders will either scrap them or make the rates less attractive than the "standard variable" rate. If you are looking for a mortgage and can get a tracker of ECB plus 1% or less - take it before it goes.

Villa82

Hi,

I'm in the process of buying a house and will be drawing down the loan in the next month. I got my mortgage with E*S. A tracker at 5.69% (Variable ECB Base + 1.44) over 35yrs. But I just noticed a note in the small print that I don't understand. Any ideas?
"We (E*S) dtermine that the 1 month EURIBOR rate is more than 0.25% above the ECB rate for a period of greater than 30days, then at our sole discretion we may substitue the 1 month EURIBOR rate for the ECB rate. This means that from a certain date, the interest rate on your Loan wil track the 1 month EURIBOR rate in place of the ECB rate. If we determine that the 1 month EURIBOR rate is less than 0.25% above the ECB rate for a period of greater than 30 days, the tracker interest rate will revert back to tracking the ECB rate.

stepbar

Villa82 wrote: »

Hi,

I'm in the process of buying a house and will be drawing down the loan in the next month. I got my mortgage with E*S. A tracker at 5.69% (Variable ECB Base + 1.44) over 35yrs. But I just noticed a note in the small print that I don't understand. Any ideas?
"We (E*S) dtermine that the 1 month EURIBOR rate is more than 0.25% above the ECB rate for a period of greater than 30days, then at our sole discretion we may substitue the 1 month EURIBOR rate for the ECB rate. This means that from a certain date, the interest rate on your Loan wil track the 1 month EURIBOR rate in place of the ECB rate. If we determine that the 1 month EURIBOR rate is less than 0.25% above the ECB rate for a period of greater than 30 days, the tracker interest rate will revert back to tracking the ECB rate.

It looks fairly simple to me. Means that they can charge you a higher interest rate if certain certain conditions apply. Surely there are better rates out there than what EBS has to offer. Has to be and even some fixed rates would be better.

Villa82

Cheers. I think this is a sneaky little add on which wasn't mentioned to me at the start. So realistically the Euribor will nearly always be higher and I won't be getting the ECB rate that I thought I was getting in the 1st place.

H*llifax have offered me a tracker of ECB+1.30% gaurnteed for the life of the mortgage or 5.4% standard variable. We don't want to go with a fixed as we can deal with raises if they do happen, we just think in the long term the variables will win out.