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Advice on tracker - AIB variable rate (LTV <50%) below ECB rate

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  • 22-02-2023 11:34am
    #1
    GMc007
    Registered Users Posts: 1 ✭


    I currently have a tracker on a mortgage where LTV is less than 50%.

    My tracker (4%) is now more expensive than the AIB variable rate (2.95% on their website today for LTV <50%).

    Anybody have any idea how likely this variable rate can stay below the ecb rate. I’m tempted to change my mortgage rate but nervous to give up the tracker. Also at the time I took out the mortgage I was living in the property but now it is rented out - could AIB force me to move to investment mortgage?



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    #2
    daheff
    Registered Users Posts: 5,851 ✭✭✭daheff


    Variable rates can change whenever the bank wants.


    I suspect Irish banks are holding variables from changing in the near term in the hope a lot of tracker holders will move. Deposit rates have barely moved on rate rises, which could be offsetting variable rates holding.


    For my money I think if you can move to a reasonable fixed rate now could be the time to look at that. Variables rates will move upwards...it's only a matter of time.



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    #3
    walterking
    Registered Users Posts: 1,297 ✭✭✭walterking


    Can't give any advice without figures. Balance of the mortgage, number of years left and tracker margin. If the 4% includes the latest ECB increase your tracker margin is under 1% and therefore worth keeping.


    Remember a tracker will also fall immediately after an ECB rate cut and they have stated the in the medium term rates will be neutral to inflation which they want at 2%. So Medium term ecb will be 1.5%-2%.


    Variable rates are lagging the ecb, but remember they will also lag ecb drops



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