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

Paul F said:
Remember that you can have:
  • A 5-year fix at 3.5% – a monthly repayment of €803, or
  • A 10-year fix at 3.8% – a monthly repayment of €824
@Brendan Burgess said his inclination was to fix for 10 years. That has the advantage of only having to worry about rate fluctuations for the remaining 9.5 years of your mortgage (versus 14.5 years if you fix for 5 years).

Either way (but especially if you fix for 5 years), you should put an annual reminder in your calendar to review your mortgage to see if switching lender makes sense.

Have you already sent off the form to fix?
Click to expand...
Yeah they're gone Paul. Considered the 10 but took a chance on the 5 in the hope that the rates will have settled come the end of that period.

Thanks to you all for the guidance. Probably something I should've taken more notice of a year ago but lesson learned. I'll take your advice with the annual reminder, thanks.
 
Hello Barry,
I would really appreciate some advice relating to our mortage. I feel we have missed the boat on this and looking for some direction.

1) Existing tracker margin - ECB + 1.95%
2) If you have an additional mortgage on the same property, what is the rate? fixed at 3% 16months remaining
3) Amount outstanding on your mortgage - €180k & €50k
4) Remaining term - 15 years & 20 years
5) Lender - BOI
5) BER D1 so no to green
6) Value of your home - 525000K
7) Might you trade up or overpay your mortgage? - Probably not
8) Do you face any barriers to switching? - No
9) What rates are you considering fixing at? Not sure what my options are....awaiting callback from BOI but from my reading I think fixing at 4% for 5 years is what they would. Ive also looked at PTSB and Avant but im really out of my depty on this topic.
 
@Nameless23 A tracker with a margin of 1.95% is worth very little.

The ECB rate is currently 3% and it will very likely go to 3.5% in a couple of weeks, and quite possibly 4% in early May. After that it's difficult to say what will happen.

Your tracker rate is currently 4.95%.

At an ECB rate of 4%, your tracker rate would be 5.95%, and the monthly repayment (on the tracker part alone, i.e., not including the €50k that is fixed) would be about €1,514 – see here.

BOI's 5-year fixed rate is actually 3.5% (not 4%) for existing customers. See this table:
rates_ltvmax60all_20230225.png

But if you only fix for 5 years, you will face BOI's rates for the final 10 years of your mortgage, and BOI's rates have been higher than other lenders' over the last several years.

So you should strongly consider fixing the entire mortgage (both the tracker and non-tracker parts) for 10 years at 3.8%.

The two main circumstances in which this would not be a good idea are:
  • If you think that there is a reasonable chance that you will trade up within the next 6 years or so
  • If you think you might pay a large lump sum off the mortgage within the next 6 years or so
In either of those situations, you could face a large early repayment penalty if you fix for 10 years.

If you attempt to switch to PTSB or Avant now, there is a reasonable or high chance that their rates will have increased by the time you complete the switch. (The process typically takes 2 to 3 months, sometimes longer.)
 
Last edited:
Hi Paul,
Thank you so very much for providing me with all this information. It has given me a much better idea where I stand.

It actually turns out our larger tracker mortgage of 180k is actually for 20yrs and not the 15 I had stated. A letter from BOI had said the tracker end date was April 2038 for some reason but my mortgage account does indeed say 2043 Unfortunately.

I have been on to BOI and they confirmed your rates above and said 10 year fix 3.8% and 5 year 3.5%. They have also said I can breK out of the smaller 50k fixed mortgage and fix at 3.8 also.

Do you still advise the 10yr fixed option even though our mortgage will still have 10 yrs left ?

BOI also said I could also choose to overpay 10% per month off each payment If I wanted and this looks like it can shave of around 2.5yrs off each. We might just do that if possible !

Thank you again
 
Nameless23 said:
It actually turns out our larger tracker mortgage of 180k is actually for 20yrs and not the 15 I had stated. A letter from BOI had said the tracker end date was April 2038 for some reason but my mortgage account does indeed say 2043 Unfortunately.
Click to expand...
Is it possible that the €180k tracker does actually end in 2038 and that 2043 refers to the €50k mortgage? Dig out your mortgage contract or annual mortgage statement and see what it says.

What is your current monthly repayment on the tracker part alone? Does that repayment amount reflect the recent ECB interest rate increase to 3% or has that increase not kicked in on your tracker yet?
 
Last edited:
1) Existing, ECB+ 1.75%.
2) Fixed at 2.9% for 18 months

3) Tracker 30k, 5 yrs left
Top-up 28k, 9 yrs left

4) 5 and 9 years
5) BoI
6) 140000
7) Neither
8) No
9) Best available
10) No, probably a C2
11) Not sure.
 
Switching to another lenders is not an option as you have a small mortgage with a short time remaining.

The current ECB rate is 3.5% so you are paying - 5.25% on Mortgage 1.

You can fix for 1 or 2 years at 3.9% or 4 years at 4%.

I would fix for the 4 years at 4%. You get a guaranteed saving of 1.25% now and probably 1.75% as ECB rates are expected to rise.

They may come down again, but by then you will have a much smaller balance on your mortgage.

I assume you have 18 months left at 2.9%. I don't think you should break out of that to fix at 4%. So stay where you are.

Brendan
 
Brendan Burgess said:
Switching to another lenders is not an option as you have a small mortgage with a short time remaining.

The current ECB rate is 3.5% so you are paying - 5.25% on Mortgage 1.

You can fix for 1 or 2 years at 3.9% or 4 years at 4%.

I would fix for the 4 years at 4%. You get a guaranteed saving of 1.25% now and probably 1.75% as ECB rates are expected to rise.

They may come down again, but by then you will have a much smaller balance on your mortgage.

I assume you have 18 months left at 2.9%. I don't think you should break out of that to fix at 4%. So stay where you are.

Brendan
Click to expand...
Thanks for the guidance. I contacted them today and have been advised of their rates at 4% for 3 or 5 years which is the remaining term of the mortgage. Currently on 4.75, ECB +1.25%.
Will leave the other one alone for now.
 
Hi all.
I am helping a fried whose KBC tracker mortgage moved to BOI and is considering fixing, or switching if possible. Any advice?
Thanks

1) Existing tracker margin.: ECB + 0.99% 5.24%
2) If you have an additional mortgage on the same property, what is the rate?: No other properties
3) Amount outstanding on your mortgage: €167K
4) Remaining term : 14 years
5) Lender: BOI
6) Value of your home : €300K - €350K
7) Might you trade up or overpay your mortgage? Wont trade up, might be in a position to overpay in the future.
8) Do you face any barriers to switching? Never and isue with payments. Only potential barrier is age 56.
9) What rates are you considering fixing at? 4.25% 3 or 5 year fixed
10) Does your house have a high BER rating which might qualify it for a lower rate? No
11) How well could you handle a further 2% rise in the ECB rate? Tricky but not undoable,
 
@huskerdu

The ECB has just raised the rate to 4.5% so he will be paying 5.5% shortly.
He could fix for 4.25% for 5 years and save about 1.25% a year or €1,700.
But that is as long as rates don't change in the 5 years.

It is hard to predict ECB rates. But the view seems to be that the ECB has finished raising rates, and that they will start falling in 12 months.

It's a close call but with 14 years left, I would tend to retain the tracker.

Brendan
 
Concur with @Brendan.

[There is a possibility that inflation will fall rapidly which might shorten the twelve months but Ms Lagarde is stressing that ECB is data driven. How rate rises actually cuts inflation is not straight forward.]
 
FT correspondent at ECB Press Conference asks key question as to recession but Ms Lagarde skipped over that. There is the fear that ECB will go too far and the lag between rate cuts and reduction in growth to negative is not well understood but its paired back growth for remainder of 2023 and 2024. ECB mission is 2% target.
 
Thanks all. Its good to get input.
Is there any point in them considering a switch to AIB/ Avant at the age of 56 or is this not worth losing the tracker for

Will get an inheeritance which can be used to pay off the rest of the mortgage but could easily be 10 years away,
 
Hello all,

1) Existing tracker margin.: ECB + 1.25%
2) If you have an additional mortgage on the same property, what is the rate?: No
3) Amount outstanding on your mortgage: €195K
4) Remaining term : 18 years
5) Lender: BOI
6) Value of your home : approx €350K but is apartment where pyrite & fire safety issues have and are being remediated hence benefit of tracker in recent years was offset by higher management charges
7) Might you trade up or overpay your mortgage? No
8) Do you face any barriers to switching? Never and issue with payments. No
9) What rates are you considering fixing at? 4.25% 3 year, 4.53% 10 year fixed
10) Does your house have a high BER rating which might qualify it for a lower rate? No
11) How well could you handle a further 2% rise in the ECB rate? No ability at this point
 
@KevinCarrot

With the latest ECB rate increase, your rate will be 5.75% (4.5% +1.25%)

You should definitely not fix for 3 years as it's too short a time to sacrifice your tracker for. At the end of the 3 years, you will have 15 years to go and you will be at the mercy of Bank of Ireland who have a long history of exploiting customers. So it's either a 10 year fix or stay on the tracker.

It's very difficult to forecast ECB rates, but they are more likely to come down than to rise.

Let's say that they fall to 2% in 2 years.

If you are on a tracker you would be paying 3.25% and would be kicking yourself for fixing at 4.53%

But they might not fall to 2% and I doubt that they will fall below 2%.

So given that you would find any further increase difficulty, I think you should fix for 10 years.

But be prepared to regret it in two years.

Brendan
 

Attachments

  • 1694786491669.png
    1694786491669.png
    36.9 KB · Views: 0
1) Existing tracker margin :- I moved from KBC with a tracker tracker mover rate ECB + 2.5% (so currently 7%)
2) 2.45% fixed (2 years remaining on fixed rate)
3) Approx 222000 on tracker and 115000 on fixed
4) Tracker 14 years, fixed 22 years
5) BOI (both)
6) Was valued at 600000
7) Happy to overpay if possible
8) No barriers to switching
9) Open minded
10) BER C2

I rang BOI and they have offered to move the tracker to a Ex KBC mortgage customer only rate of 3.45% variable. It seems a bit too good to be true given ECB interest rates would need to drop below 1% for me to get that on the tracker. I cant find any info on the deal online though so not sure why they are doing it? Anyone swapped, or is there better out there?
 
mikerd4 said:
ECB + 2.5%
Click to expand...

This is the key point. An ECB margin of 2.5% is worth something, but very little.

So your question should be which BoI product should you avail of or should you switch to another lender?

Your LTV is <60%

As you have a cheap fix for two years, I don't think you should switch lenders

You could fix with BoI for two years at 4.15%

So should you pay a 3.45% variable rate for the next two years (to coincide with the ending of your fixed rate)?

While ECB rate forecasts are unreliable, most commentators think that they won't rise further and should fall. Fixed rates should come down as well.

So the 3.45% variable rate seems like a good option.

I don't trust BoI and you have no guarantees. They could put this up tomorrow to 6.45% but you could then fix with them or switch to another lender.

So, taking everything into account, I would switch to the variable rate.

Brendan
 
Got the paperwork from BOI.
Here are the rates they are offering people with transferred KBC mortgages (<60% LTV) 1000025567.jpg
 
Last edited by a moderator:
So they are the same as BoI rates for its own customers apart from the variable rate where they charge their own customers 4.15%

Had KBC got lower rates for <60% LTV? They also gave customers with a current account a further 0.2% off.
 
You must log in or register to reply here.
Back
Top