Bank of Ireland tracker mover mortgage

bay88

I have a boi tracker at Ecb+.75% on 300K with 27 years remaining..the value of the property is around 300 also so no significant negative equity
..I'm sale agreed on a new purchase and have two options from boi.
1. keep existing property and get additional new mortgage 500k at 4.5% variable or
2. sell existing property and get 300k of the new mortgage on Ecb + 1.75% for 5 years reverting to variable rate after that

I could rent existing property at 1200 pm which would cover mortgage but the tax on the rental income would chew up most of my disposable income\ ability to save
I also can't get any guarantee from boi that I'll be left alone on tracker on what will effectively become an investment property - does this legally matter as I don't recall anything in original contract stating I had to be living there?
If I was left alone then I believe in 5 years time the value of existing property will have gone up and mortgage outstanding reduced and that gap will lead to a better profit than the interest savings I'd make from availing of the 5 year mover in option 2, approx 37k

Option 2 gives me more cash to potentially save and less exposure to future rate changes
However I'm reluctant to give up the tracker which is the only good thing I have to show from property market exploits to date!

Following PTSB announcing full term mover deal last week I queried if boi are likely to follow suit and lift the 5 year restriction but again no concrete response, along the lines of nothing in current plans and if it was introduced down the line they wouldn't be obliged to offer it to people who'd accepted earlier version

Can't decide whether to take the 37k and have better monthly cash flow and less risk or to chance my arm at renting and bet on the upward momentum in property prices and rents and assume they won't come after my tracker

Any views on this or things to consider would be much appreciated, thanks

Thronegames

While your scenario is complex, I can offer a couple of observations:

1. BOI tracker current rate is the cheapest money you can get and hold on to it! I'm on the same package for last 6 years but 50k outstanding.
2. From what I can see property prices are heating up in Dublin. The heat spreads outwards, but not geographically. So prices and rents in Cork, Limerick, Galway will trail the Dublin experience. Of course satellite suburbs of Dublin like Celbridge, Lucan, Drogheda, Balbriggan to name a few only, will feel the heat first.

Just a quick observation; no advice given here!

venividi

In a similar situation. Looking to trade up. With BOI. Got offered similar deal. No question of tracker being withdrawn on existing mortgage if I draw down new mortgage. It will remain on tracker to completion. There is no restriction with regard to investment property.
I have no desire to be a landlord but it's worth too much to give up for 5 year deal. No negotiating on 5 years. I tried. It's hard to know whether they will improve on 5 year deal in the future but my advice would be to keep existing tracker for a few years at least and see how it goes. Upside from rising house prices and potentially better tracker deal

daheff

I just dont understand the banks reluctance to let people bring the tracker mortgages with them.

If people were allowed to trade up and add more debt at variable rate (so you have a 2 speed mortgage) then it would be more profitable for the banks than just telling people they cant bring it with them.


I categorically will not move unless I can bring it...its not worth my while to walk out on the tracker. If I moved from tracker to variable for the same loan amount i'd pay an extra 400Eur a month.

Cute Hoor

Everybody has to make up their own mind obviously, and a lot will depend on individual circumstances, but I would guard a tracker mortgage with my life. The banks made a (nother) disastrous mistake offering these products and now they would do anything to try to get you off them. I was fortunate enough to pick up one of these from NIB a few years ago (interest only repayments at ECB + 0.5%), as close as you can get to free money. I've had a number of calls from the bank, for a chat, wanting to know how things were with me 'grand' and did I have any plans for early repayment 'no'. Obviously you need to do your own sums, but there's a very good reason why the bank want you off the tracker, and it's not your wellbeing they are thinking of.

frankeee

Cute Hoor wrote: »

I was fortunate enough to pick up one of these from NIB a few years ago (interest only repayments at ECB + 0.5%), a.

I don't think I've ever seen such an appropriate user name!!:D