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Tracker Mortgage Transfer

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  • 01-02-2019 6:02am
    #1
    BigVanVador
    Registered Users Posts: 17 ✭


    Hi,
    Looking for some advice. I currently own an apartment on a tracker mortgage with ulster bank that is not in negative equity. Remaining owed is 200000 and its worth 260000. Is it possible to sell this apartment and put the capital towards my own savings to buy a different house and continue to pay off the existing mortgage. Or will the bank try and screw me over and try and change me to a variable or fixed rate?
    Any advice would be much appreciated.


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    #2
    pwurple
    Closed Accounts Posts: 12,449 ✭✭✭✭pwurple


    Time to dig out that contract you signed....

    Typically, yes, when you sell the property you clear the mortgage. That is how it has been for every property I sold.

    New property is a new contract, and new mortgage.

    Nobody screwing anyone over, just abiding by the contracts you all agreed to.


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    #3
    wirelessdude01
    Registered Users Posts: 8,419 ✭✭✭wirelessdude01


    BigVanVador wrote:
    Hi, Looking for some advice. I currently own an apartment on a tracker mortgage with ulster bank that is not in negative equity. Remaining owed is 200000 and its worth 260000. Is it possible to sell this apartment and put the capital towards my own savings to buy a different house and continue to pay off the existing mortgage. Or will the bank try and screw me over and try and change me to a variable or fixed rate? Any advice would be much appreciated.

    Some banks allow what you are asking but just for a certain time length. As in you can keep for the current tracker with a little penalty of 1% added on for maybe 5years. Will be slightly cheaper for those years


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    #4
    daheff
    Registered Users Posts: 5,844 ✭✭✭daheff


    we moved a couple of years back. UB moved us from ttacker of +0.75 to tracker +2% and limited it for 10 yeats (of 20 remaining).


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    #5
    3DataModem
    Registered Users Posts: 3,957 ✭✭✭3DataModem


    As poster above said, UB will allow you keep tracker but add another 1% on to it for the first 10/15 years.


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    #6
    BigVanVador
    Registered Users Posts: 17 ✭BigVanVador


    So even if I'm not getting any extra money off the bank they'll still want to change me to a variable or fixed after 10 years on a tracker plus 1 or2%?


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    #7
    Geuze
    Registered Users Posts: 13,119 ✭✭✭✭Geuze


    You are lucky that your bank allows a tracker on the new mortgage for the new house.

    NIB / Danske have left Ireland, so anybody with a tracker from them must clear it when getting a new mortgage, and the new mortgage will not be a tracker, obviously.

    So some people are a "prisoner" of their tracker.

    Both AIB and BoI allow some sort of transfer of the tracker rate to the new mortgage, I think.

    Other posters have said that UB allow tracker rates on the new mortgage for 10 years, which is great.

    Other banks offer it for 5 years.

    The tracker margin increases by 1%, which is fairly typical, I think that it what AIB and BoI do as well.


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    #8
    Geuze
    Registered Users Posts: 13,119 ✭✭✭✭Geuze


    Let's imagine you have an ECB +1.00% tracker.

    So it becomes a new mortgage at ECB + 2.00% for ten years.

    That means a 2% rate as of today, the cheapest new mortgage in Ireland.


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    #9
    daheff
    Registered Users Posts: 5,844 ✭✭✭daheff


    Geuze wrote: »
    Let's imagine you have an ECB +1.00% tracker.

    So it becomes a new mortgage at ECB + 2.00% for ten years.

    That means a 2% rate as of today, the cheapest new mortgage in Ireland.


    Don't get me wrong...its a great rate, I just think banks are being unfair on this. A lot of people wont be able to move because the interest is effectively more than doubling moving....and thats just for the first 10 years. God knows what it'll move to after that.

    I'm in a lucky position that i can afford it. not everybody else would be.


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    #10
    Amirani
    Moderators, Society & Culture Moderators Posts: 12,521 Mod ✭✭✭✭Amirani


    daheff wrote: »
    Don't get me wrong...its a great rate, I just think banks are being unfair on this. A lot of people wont be able to move because the interest is effectively more than doubling moving....and thats just for the first 10 years. God knows what it'll move to after that.

    I'm in a lucky position that i can afford it. not everybody else would be.

    I don't see why you could feel that's unfair. You're leaving one contract and entering a new one, why should the same terms apply?

    If you want to keep the excellent terms from your previous tracker mortgage then don't buy a new house, nobody is forcing you. Anyone in this position is very fortunate relative to people who can't afford to get a mortgage or people who are paying very high variable rates as they bought after banks stopped offering trackers.


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    #11
    Doodoo
    Registered Users Posts: 430 ✭✭Doodoo


    Geuze wrote: »
    Let's imagine you have an ECB +1.00% tracker.

    So it becomes a new mortgage at ECB + 2.00% for ten years.

    That means a 2% rate as of today, the cheapest new mortgage in Ireland.

    This is the exact scenario I'm in with Ulster Bank. I'm happy enough to get it for 10 years. If I get a larger mortgage for the new property the difference between the two will be at their standard variable rate.


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    #12
    daheff
    Registered Users Posts: 5,844 ✭✭✭daheff


    Amirani wrote: »
    I don't see why you could feel that's unfair. You're leaving one contract and entering a new one, why should the same terms apply?

    Well look at it another way. If I don't move, I'm costing the bank money. There is no way they can borrow at ECB+.75%. So they lose out if i stay put.

    I understand why they want to increase the margin, but they should (in my eyes for fairness) split the difference here. They are moving people onto profitable (or breakeven at worst case) mortgages. So the bank are winners because I need to move house.


    Also in my case because we were topping up the mortgage, they would not off the relevant LTV rate on the additional borrowings. The rate on that was the full rate that a trade up at 90%+ LTV would pay. So they are taking on the double on that.


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    #13
    jlm29
    Registered Users Posts: 3,818 ✭✭✭jlm29


    But they’re not moving you on to a new mortgage- you are moving you onto a new mortgage with a higher rate.


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    #14
    Geuze
    Registered Users Posts: 13,119 ✭✭✭✭Geuze


    daheff wrote: »
    Well look at it another way. If I don't move, I'm costing the bank money. There is no way they can borrow at ECB+.75%. So they lose out if i stay put.

    Trackers mortgages contribute to net interest income.

    Trackers make gross profits for the bank.

    BoI blended cost of funds are 0.4%, so a 1% tracker is making 0.60% gross profit.


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    #15
    Geuze
    Registered Users Posts: 13,119 ✭✭✭✭Geuze


    daheff wrote: »
    Well look at it another way. If I don't move, I'm costing the bank money. There is no way they can borrow at ECB+.75%. So they lose out if i stay put.

    Banks can borrow at 0%, there is billions in current a/c at 0%.


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    #16
    Liam McPoyle
    Closed Accounts Posts: 14,846 ✭✭✭✭Liam McPoyle


    PTSB have allowed us to port across the remaining balance of the tracker, + 1%, to a new mortgage and the balance of the new loan would be at standard rates. We have to have a new property bought before we close the sale on our own otherwise the tracker will be cleared and gone in the wind, ie, we cannot sell the house and keep the tracker live, it can only stay live if there is a new house to transfer it to. The term is the same as the original mortgage offering so about 21 years I think.


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    #17
    daheff
    Registered Users Posts: 5,844 ✭✭✭daheff


    Geuze wrote: »
    Banks can borrow at 0%, there is billions in current a/c at 0%.

    Banks get charged 0.35% on overnight balances. so while they get it for free from depositors they are paying ECB everyday.
    Geuze wrote: »
    BoI blended cost of funds are 0.4%, so a 1% tracker is making 0.60% gross profit.

    You are not factoring overheads. Their real cost is in the region of 2%.


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    #18
    Geuze
    Registered Users Posts: 13,119 ✭✭✭✭Geuze


    AIB cost of funds

    0% on 33bn of non-interest bearing deposits

    0.49% on 45.5bn of interst-bearing liabilities
    of which
    0.45% on customer accounts
    -0.20%, yes, negative -0.20% on deposits from other banks


    https://aib.ie/content/dam/aib/investorrelations/docs/resultscentre/2018-half-yearly-financial-results/aib-group-plc-half-yearly-financial-report-2018.pdf


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    #19
    BigVanVador
    Registered Users Posts: 17 ✭BigVanVador


    Business Cat wrote: »
    PTSB have allowed us to port across the remaining balance of the tracker, + 1%, to a new mortgage and the balance of the new loan would be at standard rates. We have to have a new property bought before we close the sale on our own otherwise the tracker will be cleared and gone in the wind, ie, we cannot sell the house and keep the tracker live, it can only stay live if there is a new house to transfer it to. The term is the same as the original mortgage offering so about 21 years I think.

    Was that hard to negotiate and was it fairly recently?


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    #20
    April 73
    Registered Users Posts: 846 ✭✭✭April 73


    I had a 0.5% tracker with Danske bank. I wanted to move house & part of the decision making process was sacrificing that tracker.
    I think UB’s offer is very fair. You have a tracker on your current property - no bank guarantees the same deal when you take out a new mortgage on a new property.
    Yes, it hurts giving up a good tracker, but that’s your decision.


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    #21
    BigVanVador
    Registered Users Posts: 17 ✭BigVanVador


    April 73 wrote: »
    I had a 0.5% tracker with Danske bank. I wanted to move house & part of the decision making process was sacrificing that tracker.
    I think UB’s offer is very fair. You have a tracker on your current property - no bank guarantees the same deal when you take out a new mortgage on a new property.
    Yes, it hurts giving up a good tracker, but that’s your decision.

    Yes its my decision and there's no guarantee ill get the same deal as anyone else. I'm just seeing what the options are and what others have done. Might be of use to me if i have to hammer out a deal with UB as some deals are at a managers discretion. How route did you go in the end?


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    #22
    Doodoo
    Registered Users Posts: 430 ✭✭Doodoo


    Business Cat wrote: »
    PTSB have allowed us to port across the remaining balance of the tracker, + 1%, to a new mortgage and the balance of the new loan would be at standard rates. We have to have a new property bought before we close the sale on our own otherwise the tracker will be cleared and gone in the wind, ie, we cannot sell the house and keep the tracker live, it can only stay live if there is a new house to transfer it to. The term is the same as the original mortgage offering so about 21 years I think.

    I'm the exact same with Ulster Bank except I have 6 months to keep my tracker +1% from when my old mortgage is paid off to draw down my new mortgage.


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    #23
    April 73
    Registered Users Posts: 846 ✭✭✭April 73


    BigVanVador wrote: »
    Yes its my decision and there's no guarantee ill get the same deal as anyone else. I'm just seeing what the options are and what others have done. Might be of use to me if i have to hammer out a deal with UB as some deals are at a managers discretion. How route did you go in the end?

    Danske had exited the Irish market by that time. So my choice was limited to staying in the house we were in, with a very cheap tracker or move to another mortgage provider if we wanted to move house.
    In a way I felt the tracker was like a golden handcuffs - financially lucrative but trapping us in that house. We sold, paid off the tracker (sob!) and took a new mortgage with KBC on their 50% LTV rate. I haven’t regretted it as we moved to the “forever” house.

    If you can port your remaining tracker balance at +1% to a new property I think that’s a great deal. We would have been in a better position if the mortgage was with a provider that was still underwriting new mortgages in Ireland.


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    #24
    Sunrise_Sunset
    Registered Users Posts: 1,211 ✭✭✭Sunrise_Sunset


    I have a tracker mortgage with PTSB. I am hoping to sell the property and upgrade to a bigger property. They have told us I can port over the tracker with 1% extra, so 2.1% interest instead of 1.1%. The extra money I am borrowing will be at either a variable or fixed rate. Importantly, they have said I'd have 6 months from the time I sell the apartment til the time I get the keys to my new house. If it goes on any longer, I would lose the tracker rate and have to go on a fixed or variable rate.


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    #25
    BigVanVador
    Registered Users Posts: 17 ✭BigVanVador


    So i was on to Ulster bank and they reckoned that i can change over my tracker mortgage to a base interest plus 2%. Base interest is currently at 0% so i would have a 2% interest mortgage for 10 years before reverting to a variable or fixed rate. This sounds like a good deal but how do you all think this would compare to the tracker rate (.9%) plus 1% deals. I know there will initially be a .1% difference but all these rates are projected to rise in the very near future. Is speculation on the base interest and tracker rates the only thing i can go by? Does anyone else have a more educated guess or insight?


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