Tracker mortgages - Banks considering buying them out..?

seamus

buck65 wrote: »

Someone mentioned that anyone on a tracker interest only loan is fcucked , why is this?

I wouldn't necessarily say fcuked, but they're basically just paying rent on their property and nothing more.
With normal mortgage repayments, even when house prices are dropping, you're still paying off some principle, so at the end of the day the drop in house prices will affect you less.
Those on interest-only still owe whatever they borrowed and the value of the asset has collapsed.

buck65

Fair enough. I bought a house on an interest only tracker in 2006 (as advised by bank). The mortgage was in the region of 220k on a property cost of 245k. The property is worth perhaps 200k today but surely over the lifetime of the loan the property should be back into positive equity?

buck65

buck65 wrote: »

Fair enough. I bought a house on an interest only tracker in 2006 (as advised by bank). The mortgage was in the region of 220k on a property cost of 245k. Fair enough the property is worth perhaps 200k today but surely over the lifetime of the loan the property should be back into positive equity?

A property bought in 2006 at 245K may well be worth 200K now as you bought before the peak

Over the lifetime of the loan all propertied eventually will be in +ive equity unless the property is worth €0.

crazy woman

Hi there, only picking up on this now but what are your thoughts on this - we're currently on the market to sell and thought of looking for a settlement agreement from our bank - seeing as we're gonna lose it anyway..chancing our arm?

3DataModem

tHE vAGGABOND wrote: »

Regardless of what they offer you, say no to any offer!

Generally the right advice, but not always.

Depends on whether you want to sell / move / default / pay off early.

sodslaw

sorry for posting on an old thread but my bank (boi) have just taken me off my tracker mortgage after i took a 6 month payment holiday, i still paid the interest and after reading this i am wondering if they are allowed to do this.
if anyone could let me know what my rights are that would be great, hope you all had a good new year.
thanks
john
ps they just sent a letter saying it had been switched and that we are pleased to confirm that your new variable rate will be €800 a month! i am annoyed if they have done this and they are not allowed, i hate the banks with a fury!

William72

sodslaw wrote: »

sorry for posting on an old thread but my bank (boi) have just taken me off my tracker mortgage after i took a 6 month payment holiday, i still paid the interest and after reading this i am wondering if they are allowed to do this.
if anyone could let me know what my rights are that would be great, hope you all had a good new year.
thanks
john
ps they just sent a letter saying it had been switched and that we are pleased to confirm that your new variable rate will be €800 a month! i am annoyed if they have done this and they are not allowed, i hate the banks with a fury!

you'll probably find that somwhere in the small print of your agreement to go on a 6 month holiday there is something about the new terms of conditions of your mortgage. If there isn't then yes, i suspect you may have a case here as your tracker was a contract with the bank which cannot be changed without both parties consent... but... if by taking a 6 month holiday they didn't make it clear to you that you would be giving up your tracker the its prob worth pursuing...

I tried to take a 4 month interest only holiday a few years back when my wife was on maternity leave and my mortgage provider tried to change the terms of my mortgage... i told them to sod off thanks but no thanks

sodslaw

thanks william
ill pop upto them this week, they never said anything would be changed by taking the mortgage break but as you say it may be in the small print. ill pop upto them this week and see what they have to say, i didn`t think they could just change it without telling me. then again they will try anything these days.
cheers
john

bigdogbarking

just stumbled across this thread,I'm curiuos, Does anyone know if these offers were made and if so, for how much? could be real handy in taking my current house out of negative equity and allowing us to sell, i understand it won't be that simple and there will have to be a lot of thought put into it but still, could be handy for some people.

batman1

I am currently switching my current account to ulster bank from BoI.

My mortgage is and will stay with BoI as it is a tracker, currently on 2.25%.

Can they mess around with my mortgage if I close my current account, as in use it as an excuse to take me off the tracker?

makeorbrake

Is there any sign of movement on this from any of the banks?


I'm on ECB +0.59% - in a position to clear the mortgage - but simply will never do so unless they deal....but perhaps they never will....??

GSF

makeorbrake wrote: »

Is there any sign of movement on this from any of the banks?


I'm on ECB +0.59% - in a position to clear the mortgage - but simply will never do so unless they deal....but perhaps they never will....??

I thought PTSB offered something like £10k reduction for exiting the tracker a while ago but havent heard of any others. I particularly surprised that BOSI and other market exiters havent offered anything.

makeorbrake

GSF wrote: »

I thought PTSB offered something like £10k reduction for exiting the tracker a while ago but havent heard of any others.

Yes, they did during the Summer - but I don't believe that deal represented good value.

GSF wrote: »

I particularly surprised that BOSI and other market exiters havent offered anything.

I'm equally baffled. Maybe its a case that in the medium to longterm, they see people voluntarily surrendering them when they have to trade up to a bigger property..

Pablo Sanchez

As our banks can access unlimited cheap lending from the ECB, there is less reason for them to incentivise you overpaying your mortgage. If they had to pay market prices for the money they borrow it would be a different story.

Pablo Sanchez

Just saw this in todays times:

http://www.irishtimes.com/newspaper/breaking/2011/1221/breaking13.html

Banks took a huge €489 billion at the European Central Bank's first ever offering of three-year funding today, providing hope a credit crunch can be avoided and that the money may be used to buy Italian and Spanish debt.

It hopes the limit-free, ultra-cheap and ultra-long funding will have a range of beneficial effects, including bolstering trust in banks, easing the threat of a credit crunch and tempting banks to buy Italian and Spanish debt to use them as collateral.

Rather than a simple flat rate, the three-year funds were offered at an interest rate which will be the average of ECB's main interest rate over the next three years. That benchmark rate is, after a rate cut earlier this month, currently at a record low of 1.0 per cent.
For some banks, the money could be more than 3 percentage points cheaper than they can get on the open market. As part of the deal they could switch money borrowed from the ECB back in October into three-year funding and will also be able to pay it back after just a year if they so wish.

makeorbrake

Pablo Sanchez wrote: »

For some banks, the money could be more than 3 percentage points cheaper than they can get on the open market. As part of the deal they could switch money borrowed from the ECB back in October into three-year funding and will also be able to pay it back after just a year if they so wish.

So based on that, this is not a subject banks will visit until this cheap financing offered by the ecb ends?....and it won't end for 3 years, correct?

Pablo Sanchez

makeorbrake wrote: »

So based on that, this is not a subject banks will visit until this cheap financing offered by the ecb ends?....and it won't end for 3 years, correct?

To be honest cheap funding will continue until such a time as the EU pulls out of the financial trouble it finds itself in. When that happens interest rates are likly to go back up to a much higher level, thus negating a lot of the problems that the banks have with trackers in the first place.

I wouldnt be holding my breath for banks to start offering people silly money for coming off trackers, that was a rumour and nothing more then that. PTSB were the only people to come through with somewhat of a offering but it was no where near as generous as people thought it would be. Moral of the story is, if you can afford to, over pay your mortgage. If you can clear your mortgage, do so. Why continue to pay interest on money when you dont need to.

NIMAN

I asked AIB approx 15-16 months ago about them giving me a deal on my tracker to pay it off, and was more or less told NOT A CHANCE.

Pablo Sanchez

Dont forget that the banks are now fully capitalised and are technically in better shape then they were three years ago.

makeorbrake

Pablo Sanchez wrote: »

Dont forget that the banks are now fully capitalised and are technically in better shape then they were three years ago.

Ok, thanks. I guess I better put that idea out of my head - but I won't be surrendering my tracker and will see it through in the normal (as in the agreed montly payments) fashion for the next 25 years of it's 30 year term.

I had been planning on buying another property outright anyway - and will probably do so next year - just need to save a little bit more.