Coming off fixed rate mortgage

depot

Sorry if this has been asked before. I bought my house five years ago and at the time went with a 5 year fixed (4.89%). This is due to end shortly, on the 31st of March to be accurate. I have checked my original loan offer and it says I go on to a tracker +1.15%, which will be a blessing to me. How much on average will this knock off my repayments currently 930 after interst relief. Will the bank contact me or will my repayments just change? Thanks in advance all.

Marcanthony

you will be on 2.15% intrest. This will be approx 180 euro intrest on every 100k borrowed.
compared to 4.89% intrest your paying at present.Which is costing approx 405 euro on every 100k borrowed.

so a savings of approx 225 euro on every 100k borrowed per mth.

you will get your tax relief on the intrest amount also.
Quite a good savings.

i dont know how much your mortgage is or the lenght of term or your intrest relief rate. so lets just say you have an intrest only mortgage for 285,000 and your tax relief is 20%.

The amount of your mortgage after tax relief at 20% on 285k (intrest rate 4.89%). would be approx €930.00.

Your new rate would be (at 2.15%) and after tax relief at 20% on the amount borrowed of 285k. Would be approx €410.00.

Your bank usually contacts you prior to your new rate by post. However I would contact them or your broker (if you used one) to confirm confirmation of the new rate prior to change over of the new rate.To identify or mitigate any problems or issues. (in case they do arise).

If I am correct about your situation in relation to the amount of loan and your mortgage been intrest only.You will make a savings of over 6k a year.If you can manage to keep paying the original amount I would personally keep paying it off the princible amount.Intrest only mortgages in my opinion are not a great investment.//// or even if you are on a term mortgage If you can afford it . keep paying the same amount off the princible.You will be amazed how much time it will cut of your mortgage repayments lifespan. talk to your broker about it.

Your mortgage intrest will not last for ever.If you are a first time buyer.The term and amount has been changed A special rate of 30% for the tax years 2012 to 2017 is introduced for first-time buyers who took out mortgages in the years 2004 to 2008. however Mortgage interest relief will be abolished entirely after 31 December 2017.

and remeber if the ecb rate increases . so does your repayments. a 1% increase less your 20% relief. Can add another €144.00 on your repayments of a 285k intrest only mortgage.I cant really see the ecb rate of 1% at present going any lower in the future.

Hope this helps.

depot

Thanks for the info, that is great news for me. I am a first time buyer, so between going onto a tracker and the increase interest relief, It will free up some badly needed cash, which I can in turn use to clear my credit card. Thanks again for the information

themoneyguy

Who is your loan with?

Most banks will not allow you to revert to a tracker rate on expiry of a fixed rate as their terms will note that you will revert to a variable rate at that stage.

depot

My loan is or was with First Active, now with Ulster Bank. I went straight onto a fixed rate and that was for five years, this is now up and the letter of offer states that I go on a ECB plus 1.25%. I so hope that this is right and I will feel a little less pressure every month when the mortgage is due.

Marcanthony

depot wrote: »

My loan is or was with First Active, now with Ulster Bank. I went straight onto a fixed rate and that was for five years, this is now up and the letter of offer states that I go on a ECB plus 1.25%. I so hope that this is right and I will feel a little less pressure every month when the mortgage is due.

Depot is correct. BOSI was doing this also.

BreffniWeffni

I am in the same situation, met Ulster today and they shared the wonderful news that I will be on a total of 2.3% after my 5 year fixed - a good deal by all accounts. It will save you 300 anyway.

enjoy the extra cash

ljhops

Hi All,

My Husband and I got took out a Fixed Interest Rate Mortgage nearly 5 years ago (4.95%) with BOI, we are due to go on a Tracker rate mortgage this coming March. Not sure what exact date in MArch this is to take effect.
Does anyone know what the Tracker Rate with BOI is at the moment?

We migrated to Australia last year and have a difficult time getting in touch with BOI to discuss our options with them- Time difference and also no call backs!!! :mad:...
Also anyone know if there are any penalties involved if lump sum payments made into the Mortgage???

Thanks All, - Great Tread and Information!!

killers1

ljhops wrote: »

Hi All,

My Husband and I got took out a Fixed Interest Rate Mortgage nearly 5 years ago (4.95%) with BOI, we are due to go on a Tracker rate mortgage this coming March. Not sure what exact date in MArch this is to take effect.
Does anyone know what the Tracker Rate with BOI is at the moment?

We migrated to Australia last year and have a difficult time getting in touch with BOI to discuss our options with them- Time difference and also no call backs!!! :mad:...
Also anyone know if there are any penalties involved if lump sum payments made into the Mortgage???

Thanks All, - Great Tread and Information!!

The tracker rate you go on to will depend upon the tracker rate they were offering for your loan amount and loan to value when the mortgage was taken out. Prior to the expiry of your fixed rate the bank will write to you advising of the various fixed & variable rate options open to you once the fixed rate is over. My advice, take the tracker and bring it to the grave with you! Once you have come off the fixed rate and gone onto a variable rate (i.e. the tracker rate) it is illegal for a bank to charge you any penalties for making lump sum repayments off the capital.

cbrlover

I don’t know where I stand on this but I will try seeking advice.

I too am coming out of a fixed 5 year and have been offered a tracker today. The offer PTSB made to me today was 3.25 above ECB. Now I remember when I took out the mortgage I was told it would be between 1 and 1.5% but this is not on my contract. I am sure because it is not in the contract I won’t have a leg to stand on but what about verbal contracts. As what was said above I was told it would be at the rate of the day I took out the mortgage.

Any advice would be appreciated.

killers1

cbrlover wrote: »

I don’t know where I stand on this but I will try seeking advice.

I too am coming out of a fixed 5 year and have been offered a tracker today. The offer PTSB made to me today was 3.25 above ECB. Now I remember when I took out the mortgage I was told it would be between 1 and 1.5% but this is not on my contract. I am sure because it is not in the contract I won’t have a leg to stand on but what about verbal contracts. As what was said above I was told it would be at the rate of the day I took out the mortgage.

Any advice would be appreciated.

I sympathise with your situation but unfortunately you won't have a leg to stand on. The permanent tsb loan offers say something along the lines of 'when you're fixed rate expires you will revert to a tracker rate at whichever margin the bank is applying above ECB at that time (i.e. Now)' When you took out your mortgage the tracker rates they were charging were between 1 - 1.5% above ECB so that's probably why you were told that this is what you would revert to as that is what someone coming off a fixed rate at that time would have moved to. Unfortuantely it's in the fine print and there is nothing they will do for you. Sorry, I'm sure this isn't what you wanted to hear....

rose14

We are also in same boat. Coming off fixed of 5.65% in June. Our Offer Letter stated the following:

"the interest rate applicable to the Loan will be a variable interest rate. This variable interest rate may vary upwards or downwards. The interest rate shall be no more than 1.25% above the European Central bank Main Refinancing Operations Minimum Repo for the term of the loan. Variation in interest rates shall be implemented by the Lender not later than close of business on the 5th working day following a change in the Repo rate by the European Central Bank."

Does this mean our new interest rate will be a tracker and it will be 1.25% over the ECB?

Sorry to ask stupid questions, but I need this spelled out in black and white for me before I start to get excited.


Thanks,

Rose

cookie1977

Looks to me like your rate will track the ECB variable rate plus 1.25% so yes you have a tracker

rose14

cookie1977 wrote: »

Looks to me like your rate will track the ECB variable rate plus 1.25% so yes you have a tracker

Thanks for reapplying, that's what we're thinking, but to be honest we get so excited here that we're thinking couldn't possibly be true. We should surely be getting communication from the bank soon, I just want to be armed with my own knowledge before they write to us just in case they are not fully forthcoming with info

powerie1

Just wondering, was there a sentence in the offer letter stating that 'In the event that, or at any time, the Repo Rate is certified by the lender to be unavailable for any reason the interest rate applicable to the Loan shall be the prevailing Home Loan Variable Rate' It seems like a get out clause for BOI!:mad:

rose14 wrote: »

We are also in same boat. Coming off fixed of 5.65% in June. Our Offer Letter stated the following:

"the interest rate applicable to the Loan will be a variable interest rate. This variable interest rate may vary upwards or downwards. The interest rate shall be no more than 1.25% above the European Central bank Main Refinancing Operations Minimum Repo for the term of the loan. Variation in interest rates shall be implemented by the Lender not later than close of business on the 5th working day following a change in the Repo rate by the European Central Bank."

Does this mean our new interest rate will be a tracker and it will be 1.25% over the ECB?

Sorry to ask stupid questions, but I need this spelled out in black and white for me before I start to get excited.


Thanks,

Rose