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Great news if you have a tracker mortgage


hammer

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Joined
Jul 6, 2009
Messages
58,506
| Irish Examiner

This will give tracker mortgage holders a lot of confidence for 7/8 months.


If you are a variable rate mortgage holder you are in deep trouble. These tracker mortgages are a loss maker for the Banks so they will need to recover these losses from other mortgage holders, SMEs, personal overdraft, personal loan, credit card, car loan customers.
 


Grumpy Jack

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Oct 26, 2008
Messages
6,090
Woo hoo, as the great Homer would say.

They were stupid enough to give us a tracker and, to quote Stephen Fry on his iPad, they are gonna have to prise it from my cold dead hands.

Saving a fortune on it - keeping up the old repayments from our 4.75% fixed that we came off in March 2009. We're able to pay an extra €500 a month off the principle and our term is now down to under 12 years at the tracker rate of 2.25% we're on now - down from 18 years this time last year. Every two months, we pay an extra month. Long may it last.
 

grafter1

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Apr 1, 2010
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829
Was there ever any advantage to the bank to offer tracker mortgages?
They offered tracker mortgages on the assumption that the cost of funds for the banks would continue to literally track the ECB.

When the financial system imploded this of course all changed. My understanding is the cost of funds for the banks is something like 3pm above ECB now so banks are losing their shirts on trackers and will probably have to raise standard variables rates by at least another 1pc
 

mr_anderson

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Dec 12, 2007
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When the financial system imploded this of course all changed. My understanding is the cost of funds for the banks is something like 3pm above ECB now so banks are losing their shirts on trackers and will probably have to raise standard variables rates by at least another 1pc

I think I read something along the lines of 1.5%.

In reality, its a swings and roundabout scenario.
As variable rates rise, so property prices will continue to fall.

Many who got trackers bought during the boom years and so, will suffer capital appreciation.

Of course anyone who bought with variable rates during these times are going to be royally screwed on both sides - interest and capital loss.

Given the choice though, its probably better to be on a 4.5% variable with a €300,000 mortgage, than an ECB+1.5% tracker with a €600,000 mortgage.
 

kerrynorth

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Oct 5, 2005
Messages
1,525
Was there ever any advantage to the bank to offer tracker mortgages?
It was a mismatch of offering long-term loans on the basis of overnight and 3 month interbank funding money rates. Trackers can work as long as the margins are based on long-term lending rates meaning a circa 2.5% margin rather than the 1% margins that were generally on offer.
 

kerrynorth

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Oct 5, 2005
Messages
1,525
Woo hoo, as the great Homer would say.

They were stupid enough to give us a tracker and, to quote Stephen Fry on his iPad, they are gonna have to prise it from my cold dead hands.

Saving a fortune on it - keeping up the old repayments from our 4.75% fixed that we came off in March 2009. We're able to pay an extra €500 a month off the principle and our term is now down to under 12 years at the tracker rate of 2.25% we're on now - down from 18 years this time last year. Every two months, we pay an extra month. Long may it last.
That is a great attitude to have in paying off your mortgage. Keeping the repayments at the higher level can a) drastically cut the term of the loan b) lower the overall interest cost, and most importantly c) provides a buffer against a change in circumstances as you can cut repayments to the level required by the tracker instead of the current level of payment.
 

hammer

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Jul 6, 2009
Messages
58,506
EBS raised rates by .6% also today. Competition Authority should investigate

Permanent TSB .5%
AIB .5%
BOI .5%
 

drjimryan2

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Nov 16, 2009
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im on a +1%..........

sometimes intelligence does actually pay off, which is very important for society going forward.......
 

rockofcashel

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Jan 23, 2005
Messages
7,968
Website
www.sinnfein.ie
Best move we ever made too.. remember the missus wanting to fix the mortgage at an extortionate rate, because she didnt fully understand all this tracker nonsense... repayments are cut by 300 per month from their peak.. and yes, as for paying back early, I remember been shown by a mortgage provider the effect of increasing the repayment by 2% per annum.. cuts 8 years off a 20 year mortgage.. though that's easier to achieve when there is 2% inflation on wages per year
 

kerrynorth

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Oct 5, 2005
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Heard on one of the Morning programmes (Newstalk or Morning Ireland I am not sure which, I was half asleep at the time) that lenders were looking at how to get out of trackers. Did anyone else hear it?
 

orbit

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Dec 5, 2008
Messages
701
Heard on one of the Morning programmes (Newstalk or Morning Ireland I am not sure which, I was half asleep at the time) that lenders were looking at how to get out of trackers. Did anyone else hear it?
Yes, I heard it. And they can go f**k themselves - just what they did to people who tried to get out of fixed rate mortgages.
 

kerrynorth

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Oct 5, 2005
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Yes, I heard it. And they can go f**k themselves - just what they did to people who tried to get out of fixed rate mortgages.
Was it on Newstalk or MI?
 

kerrynorth

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Oct 5, 2005
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irishpancake

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Apr 5, 2007
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Best move we ever made too.. remember the missus wanting to fix the mortgage at an extortionate rate, because she didnt fully understand all this tracker nonsense... repayments are cut by 300 per month from their peak.. and yes, as for paying back early, I remember been shown by a mortgage provider the effect of increasing the repayment by 2% per annum.. cuts 8 years off a 20 year mortgage.. though that's easier to achieve when there is 2% inflation on wages per year
Sorry RoC, can't resist ;)

Hopefully she was not on this bus:

[nomedia="http://www.youtube.com/watch?v=XilTr0ME9S4"]YouTube- I Don't Know What a Tracker Mortgage is[/nomedia]


Or gettin off this one :)

[nomedia="http://www.youtube.com/watch?v=l74083zafAM"]YouTube- Financial Regulator[/nomedia]


Sorry, couldn't resist,

Enjoy, relics of ould dacency :)
 
Last edited:

seenitallb4

Active member
Joined
Apr 28, 2009
Messages
197
Woo hoo, as the great Homer would say.

They were stupid enough to give us a tracker and, to quote Stephen Fry on his iPad, they are gonna have to prise it from my cold dead hands.

Saving a fortune on it - keeping up the old repayments from our 4.75% fixed that we came off in March 2009. We're able to pay an extra €500 a month off the principle and our term is now down to under 12 years at the tracker rate of 2.25% we're on now - down from 18 years this time last year. Every two months, we pay an extra month. Long may it last.
That's some top class financial mangement right there. Kudos- I hereby nominate you to the board of one of our basket cases because you are clearly more level headed than the morons who were in charge for the last decade.
 

TradCat

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Joined
Jun 5, 2005
Messages
1,992
If you were on a tracker and owed 100K, I wonder would the banks be open to an offer of 70K to say goodbye. There must be a level at which it would be worth their while if they are losing money and may be for the next 20 years.
 

John Kalahan

Active member
Joined
Jan 5, 2008
Messages
122
If you have a tracker @1.75% why pay it off early?

If you have a tracker @1.75% less tax relief why pay it off early?

Just invest your spare cash instead at any rate better than the mortgage rate or put in your pension fund with tax relief at the higher rate until 2014
 

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