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Giving up the Tracker or Not!

  • 06-06-2014 09:28AM
    #1
    Chipman2007
    Registered Users, Registered Users 2 Posts: 10 ✭


    Hi.
    We look like we're in a position to sell our house which is on a tracker mortgage.
    We can keep the same circa 200k mortgage with Ulsterbank which is on a more expensive tracker for 5 years and then goes to a variable rate. The house is bigger and better as some of our savings will make up the difference. Any thoughts?


Comments

  • #2
    3DataModem
    Registered Users, Registered Users 2 Posts: 4,192 ✭✭✭3DataModem


    3 questions;

    What's the remaining period on your mortgage, what's your old tracker rate, what's your new tracker rate?


  • #3
    Trish56
    Registered Users, Registered Users 2 Posts: 1,256 ✭✭✭Trish56


    I wouldn't be in any rush as the majority of lenders are now offering to bring over the tracker plus 1% on the new mortgage for the full term. Ulster if they wish to remain competitive will follow sooner rather than later.


    Chipman2007 wrote: »
    Hi.
    We look like we're in a position to sell our house which is on a tracker mortgage.
    We can keep the same circa 200k mortgage with Ulsterbank which is on a more expensive tracker for 5 years and then goes to a variable rate. The house is bigger and better as some of our savings will make up the difference. Any thoughts?


  • #4
    Chipman2007
    Registered Users, Registered Users 2 Posts: 10 ✭Chipman2007


    Remaining period 15 years; current/old tracker rate of 1.05% over ECB. New 5 year tracker is at rate of 2.5% over ECB.


  • #5
    3DataModem
    Registered Users, Registered Users 2 Posts: 4,192 ✭✭✭3DataModem


    Chipman2007 wrote: »
    Remaining period 15 years; current/old tracker rate of 1.05% over ECB. New 5 year tracker is at rate of 2.5% over ECB.

    I'll do the maths properly tomorrow but giving it up will roughly cost you 250 per month for the five years, and probably 300-400 per month (reducing) thereafter assuming your variable averages 4%-5% over ECB or so.

    That's about 60 grand overall in absolute terms, or about 45k in today's money assuming a low inflation rate.

    As the poster above says, if you can get the lender to agree as margin over tracker for full term - even 3% - then you are probably better off from a risk perspective.

    Another important question is how long you expect to stay in this house? If only 5-6 years then the variable never really kicks in, so it's more like 12-14k "lost".


  • #6
    Chipman2007
    Registered Users, Registered Users 2 Posts: 10 ✭Chipman2007


    so do we hold out and wait for the bank to improve the product they have on offer?


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  • #7
    Liam D Ferguson
    Registered Users, Registered Users 2 Posts: 542 ✭✭✭Liam D Ferguson


    Chipman2007 wrote: »
    so do we hold out and wait for the bank to improve the product they have on offer?

    Ulster Bank used to offer the facility to move your tracker until the end of last year. They removed this facility in January 2014 and replaced it with the 5-year product. I wouldn't hold my breath for them to go back again.

    3DataModem has calculated the cost of giving up your tracker below, along with the cost of borrowing whatever extra you may need to. If the new house is worth paying the extra to you, then go for it. If not, stay where you are.


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