Key Post I have a Bank of Ireland tracker – should I consider fixing?

Hi Brendan. Thanks so much for your advice so far.

Just one more question as its decision time for us but with a tracker ECB +1.1% if we could afford the higher interest rates should we stick with our tracker?. If the ECB rate goes to 4% we'd be paying back 5.1% but I'd be hoping it wouldn't stay high for too long and it would fall again. Would you think it will go higher than ECB 4%. I know its an educated guess in these uncertain time. Thanks. Again.
 
Walshee said:
We can't really afford to run into high rates.
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Walshee said:
if we could afford the higher interest rates should we stick with our tracker?.
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You said you could not afford high rates and that is what I based my reply on.

If you can afford high rates, it's very close whether to hold onto the tracker of ECB + 1.1% or fix.

But best of all would be to switch away from Bank of Ireland. If rates have gone up by the time you are drawing down, then live with the tracker.

No one can forecast interest rates with much reliability. They are unlikely to go back down to 0%, but apart from that we don't know what will happen.

If you wish to speculate about interest rates, do so in response to this thread:

What future ECB interest rates should we assume when deciding to fix or not?

I am not able to forecast ECB rates and I don't think anyone else can either. No one forecast rates of 0% lasting for a few years. This century, peaks have been hit as follows: 2000: 4.75% 2008: 4.25% But for most of the time, the rates have been a lot lower
www.askaboutmoney.com

Brendan
 
Brendan Burgess said:
You said you could not afford high rates and that is what I based my reply on.

If you can afford high rates, it's very close whether to hold onto the tracker of ECB + 1.1% or fix.

But best of all would be to switch away from Bank of Ireland. If rates have gone up by the time you are drawing down, then live with the tracker.

No one can forecast interest rates with much reliability. They are unlikely to go back down to 0%, but apart from that we don't know what will happen.

If you wish to speculate about interest rates, do so in response to this thread:

What future ECB interest rates should we assume when deciding to fix or not?

I am not able to forecast ECB rates and I don't think anyone else can either. No one forecast rates of 0% lasting for a few years. This century, peaks have been hit as follows: 2000: 4.75% 2008: 4.25% But for most of the time, the rates have been a lot lower
www.askaboutmoney.com

Brendan
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Thanks Brendan.
 
Brendan Burgess said:
I don't pay that much attention to these forecasts. (It's not 3 month Euribor by the way, it's an ECB rate)

If you are going to fix, then fixing for 10 years is better than 5 as you won't have much time left on the mortgage subject to BoI' predatory rates.

Will ECB +1.25% be higher than 3.3% over the next 10 years? I just don't know and no one does.

The advantage of the fix is that you will have certainty, even if it turns out more expensive.
The advantage of the tracker is that you will have it for the last 5 years of your mortgage and you have the flexibility to overpay without penalty at any time.

Brendan
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Thanks Brendan, that is really helpful.
 
Rozzer1 said:
1) Existing tracker margin. ECB + 0.9
2) If you have an additional mortgage on the same property, what is the rate? No
3) Amount outstanding on your mortgage : €250k
4) Remaining term: 15yrs
5) Lender : B of I
6) Value of your home: € 390k
7) Might you trade up or overpay your mortgage? Maybe overpay, might trade down in 10yrs
8) Do you face any barriers to switching? No
9) What rates are you considering fixing at? 3.3% over 7 or 10yrs
10) Does your house have a high BER rating which might qualify it for a lower rate?C1

should we ride the wave with tracker or fix for 7-10yrs?
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@Brendan Burgess Thinking of changing from tracker to a fixed rate, but if BOI increase their fixed rate from the time I submit my Mortgage Form of Authorisation to the time they apply the fixed rate to the loan do you have to stick with new rate even though you didn’t sign up for that rate? Eg if you sign up for 3% fixed for 5yrs and then it goes up to 3.5% during the application process, can you then decide to stick with your tracker?
 
Brendan Burgess said:
Once you send back the form ticking the 3% box, that would be the rate you would get.
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@Rozzer1 It's worth noting that AIB's rate change form says that they could increase the rate between the time you send the completed form and the time that they process it, and that in such cases you'll be put on the higher rate. In practice, it seems that they have allowed some leeway. You would hope that BOI would do the same but you can't be 100% certain.
 
Paul F said:
@Rozzer1 It's worth noting that AIB's rate change form says that they could increase the rate between the time you send the completed form and the time that they process it, and that in such cases you'll be put on the higher rate. In practice, it seems that they have allowed some leeway. You would hope that BOI would do the same but you can't be 100% certain.
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Many thanks @Paul F and @Brendan Burgess
 
Hey hoping you can assist please with the below:

1) Existing tracker margin. (This is set in your mortgage contract.) ECB + 1.1% (Current rate = 3.1%)
  • If your tracker margin is 1%, please state it in the following format to avoid confusion: ECB + 1%
2) If you have an additional mortgage on the same property, what is the rate? ECB + 1.65%
  • E.g., "Fixed at 2% with three and a half years of the fixed-rate period remaining."
3) Amount outstanding on your mortgage €231,356 and €14,415
  • If you have both a tracker and a second mortgage on the property, specify the amount outstanding on each
4) Remaining term 18 years
5) Lender Bank of Ireland
6) Value of your home €500k
7) Might you trade up or overpay your mortgage? No
8) Do you face any barriers to switching? E.g., an impaired credit record, a mortgage with a warehoused portion due to a restructuring, reduced income since you took out your mortgage, you are now renting out the property. Yes, we cannot switch
9) What rates are you considering fixing at? Looking at 5 or 10 year fixed rate
10) Does your house have a high BER rating which might qualify it for a lower rate? Check it here or estimate it if necessary. No
 
AMS said:
Existing tracker margin. (This is set in your mortgage contract.) ECB + 1.1% (Current rate = 3.1%)
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Bank of Ireland discriminates between new and existing customers. There is no knowing what will happen to you at the end of the 5 year fixed rate period other than the fact that you will lose your tracker.

With 13 years remaining after a 5 year fixed, stay on the tracker.

Brendan
 
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Brendan Burgess said:
Bank of Ireland discriminates between new and existing customers. There is no knowing what will happen to you at the end of the 5 year fixed rate period other than the fact that you will lose your tracker.

With 13 years remaining after a 5 year fixed, stay on the tracker.
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@Brendan Burgess Is there any merit in @AMS fixing for 10 years at 3.3%?

(@AMS A 10-year fix would be a bad idea if you think you might move home in the next few years.)
 
Hey, we were leaning towards a fix for 10 years as we are absolutely out of our debt when it comes to economics and figuring out what is best but thought we may be better off with the known, i.e. that our payments will be just under €1,500 per month, we cannot afford to go any higher than that.

We will not be moving house as we would not be in a position to get another mortgage lender to offer us a mortgage.
 
Brendan Burgess said:
Bank of Ireland discriminates between new and existing customers. There is no knowing what will happen to you at the end of the 5 year fixed rate period other than the fact that you will lose your tracker.

With 13 years remaining after a 5 year fixed, stay on the tracker.

Brendan
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what if we went with the 10 year fixed rate? Would that be an option - as above it is 3.3% but, at the moment anyway, we can afford the repayments
 
It's hard to know.

3.3% might look cheap in a few years.
But it might look dear compared to the lost tracker.

If you are under financial pressure, then take the security of the 3.3% rate.

Brendan
 
one more question sorry! So in 10 years, (if we do decide to come off the tracker and go on this fixed rate), will we be in a better place as our principal amount will have come down so much that the remaining 8 years won't be as bad even if the rate then is higher?
 
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AMS said:
will we be in a better place as our principal amount will have come down so much that the remaining 8 years won't be as bad even if the rate then is higher?
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You will still owe €127k. So less than you owe now, but not trivial either.

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1) Existing tracker margin. : ECB + 1.1%
2) If you have an additional mortgage on the same property, what is the rate?
N/A

3) Amount outstanding on your mortgage
€190k

4) Remaining term
14 years

5) Lender
BOI

6) Value of your home
€350k

7) Might you trade up or overpay your mortgage?
Already traded up and now have house rented out

8) Do you face any barriers to switching? E.g., an impaired credit record, a mortgage with a warehoused portion due to a restructuring, reduced income since you took out your mortgage, you are now renting out the property.

We are now renting out the property
9) What rates are you considering fixing at?
BOI offering 5 year fixed at 3% but we were wondering if we should switch to another lender

10) Does your house have a high BER rating which might qualify it for a lower rate? Check it here or estimate it if necessary.
No
 
@mainie

If you switch to another lender, you will be charged their investment property rates, so far higher than you would ever be paying on your current mortgage.

Should you fix?

The ECB rate is currently 2% but let's assume it rises to 3% and stays there for a while.
You will be paying 4.1%

You could fix for 5 years at 3% but you would lose your tracker and be at the mercy of Bank of Ireland's discriminatory treatment of existing customers for the remaining 9 years.

It's hard to know, but, on balance, I would hold onto the tracker.

Another advantage of holding onto the tracker is that if you decide to sell and pay off the mortgage, there won't be any penalty as there might be on a fixed rate.

If you do decide to fix, make sure that the process does not alert them to the fact that it is a buy to let, as they might try to switch you to buy to let rates.

Brendan
 
Moderator's note: this post was moved from the mortgage switcher thread.

1) Existing tracker margin. (This is set in your mortgage contract.) ECB+1.35%
2) If you have an additional mortgage on the same property, what is the rate? No
3) Amount outstanding on your mortgage €156,000
4) Remaining term 17.5y
5) Lender BOI
6) Value of your home €320,000
7) Might you trade up or overpay your mortgage? No
8) Do you face any barriers to switching? E.g., an impaired credit record, a mortgage with a warehoused portion due to a restructuring, reduced income since you took out your mortgage, you are now renting out the property. - my wife will be 50 in Jan 2023 and I'm told we woudl get only 15y morgage
9) What rates are you considering fixing at? - BOI 3% for 5 years?
10) Does your house have a high BER rating which might qualify it for a lower rate? Check it here or estimate it if necessary. BER B3

Thanks...
 
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