Key Post I have a Permanent TSB tracker – should I consider fixing?

[Brendan Burgess]

Summary

1. It is almost never correct to fix with ptsb
2. If you have a large mortgage with a high margin, e.g., ECB + 1.5% or higher, you should switch to another lender and fix.
3. @Paul F has set out the best rates here. As of September 2022, it is preferable to switch to AIB or Avant.

Some general points which apply to all ptsb cases:

1. If you fix your rate, assume you will lose your tracker forever
2. You really do not want to become a non-tracker customer of ptsb, as they have a predatory attitude to their existing customers
   • They maintain very high rates
   • Their best rates are not available to existing customers
   • In the past they have had periods where they did not offer fixed rates to existing customers
   • This poster was offered a 2.05% rate and then when they realised he was an existing customer, they increased it to 2.8%! This really highlights the way ptsb treats existing customers.
3. You might say that this does not matter, as – if they exploit you – you can switch to another lender. But there are many reasons why you might not be able to switch lenders and there are many reasons why it might be uneconomic to do so – see this post.
4. ptsb's fixed rates are high anyway, so it's not usually right to give up a tracker to fix
5. However, if you have a high tracker margin, e.g., ECB + 1.5% or higher, then it's probably right to switch lenders
   • Note: "ECB + 1.5%" means "European Central Bank rate plus an extra 1.5%" (a margin of 1.5%). Check your mortgage contract.
6. The factors which will determine what you do will be:
   • The margin above the ECB rate, e.g., ECB + 0.8%
   • The balance left on your mortgage
   • The term remaining on your mortgage
7. If you intend clearing your mortgage early, this would suggest you should not fix
   For example, it would not be a good idea to fix (or switch!) if:
   • You intend to trade up
   • You intend to pay a significant lump sum off your mortgage
   • You intend to significantly overpay your mortgage
   
   You can overpay a tracker at any time without penalty, but you may face an early repayment penalty if you pay a lump sum off a fixed-rate mortgage. However, some lenders, including Avant and Finance Ireland, allow you to make large overpayments without penalty – and they will waive any break fee if you trade up and take out a new mortgage with them (subject to certain conditions; see this post).

Even though it only sometimes makes sense to fix your tracker with Permanent TSB (it is usually better to switch to AIB or Avant), you should call PTSB and ask them to send you a list of fixed rates that you are eligible to switch to (and also ask them for a break fee quote if part of your mortgage is on a fixed rate)

• The fixed rates in the letter are valid for 30 days, which will give you some time to decide whether to re-fix with PTSB or to switch to another lender (or to keep your tracker)

 

[Brendan Burgess]

There is one unique feature about the ptsb mortgages which might suit some people with a fluctuating or uncertain income.

If you overpay your mortgage, the overpayments are treated as credits. So, it's like the opposite of being in arrears.

If you subsequently need to take a mortgage payment break, you don't need to get their permission. If you stop paying, you just use up your credits.

So, in effect, you can overpay a fixed rate mortgage without an early break fee. (There is no early repayment fee for variable or tracker mortgages.)

You can't, however, ask for a refund of the credits.

In summary:

• You can overpay by as much as you like each month without penalty, and this builds up as a credit on your account
• You can use this credit to take a payment holiday or to reduce the monthly repayments (or to pay off part of the principal at the end of the fixed period)
• You are only charged mortgage interest on the net balance, i.e., on the mortgage balance after the credit has been subtracted
• See this thread for more details

How does this compare with other banks?

When you overpay a normal mortgage, the bank recalculates either your term or your repayments..

You may face an early repayment fee for any overpayment of a fixed rate mortgage.

 

[Brendan Burgess]

If you want to ask whether you should fix or not, please provide the following information:
1) Tracker interest rate
It is really important to provide the information in the following format:

• ECB rate: 1.25% (This is the rate set by the ECB – currently 0.5% but it will rise to 1.25% later in September 2022)
• Margin: 1% (This is set in your mortgage contract)
• Total rate: 2.25%

This is important for us to understand your rate, but it's also important that you understand your rate.

2) If you have an additional mortgage on the same property, what is the rate?

• E.g., "Fixed at 2% with three and a half years of the fixed-rate period remaining."

3) Amount outstanding on your mortgage

• If you have both a tracker and a second mortgage on the property, specify the amount outstanding on each

4) Remaining term
5) Lender
6) Value of your home
7) Might you trade up or overpay your mortgage?
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.
9) What rates are you considering fixing at?
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.
11) How well could you handle a further 2% rise in the ECB rate?

 

[JudeH01]

Hi Brendan,

Jumping on as well to ask for your opinion, if I am able to. Mortgage info as follows:

1) Existing tracker margin 1.68% Tracker
2) Amount outstanding on your mortgage €140, 000
3) Remaining term 12 years
4) Lender PTSB
5) Value of your home €425,000
6) Might you trade up or overpay your mortgage? Not likely in the next 3 to 5 years
7) Do you face any barriers to switching. No
8) What rates are you considering fixing at? Unsure what to do I know PTSB not offering good fixed rates for existing customers and trying to work out if complete change of provider is worthwhile or whether to hold tight

Thanks in advance for any advice.

 

[twelve]

And another request to help with our thinking!

1) Existing tracker margin ECB +2.3 (tracker was ported about 3 years ago)
2) Amount outstanding on your mortgage €170,000
3) Remaining term 19 years
4) Lender PTSB
5) Value of your home €350,000 maybe
6) Might you trade up or overpay your mortgage? Am interested in overpaying. Have some savings and considering reducing mortgage balance by around 10-20k as part of this.
7) Do you face any barriers to switching. Don't think so!
8) What rates are you considering fixing at? I know ptsb are not perfect but they are offering the 5 year fixed at 2.8 (green rate) which is exactly the same as our current rate, or the 7 years at 3%. All this without solicitors or much in the way of paperwork or application hassle with moving to other banks.

Am interested in your views. We've overpaid a little to date, luckily, but trying to get in before ECB shoots up another chunk. Such funds as might be available for overpayment could go into a dedicated savings account for the duration for a lump sum payment during or at the end of the fixed term.

Thanks!

 

[Nessa1985]

Hi there,

I am hoping you can help me please;

1. ECB + 0.8%
2. €136k outstanding
3. 17 years remaining
4. Lender: PTSB
5. Value: €240k
6. I intend to sell the property in c. 4-5 years
7. Yes, I only have 1 years self employed accounts so need to remain with PTSB
8. I am hoping for 4 years fixed at 2% with PTSB

Thank you

 

[RichieRich]

Hi Brendan and all,

I would appreciate your view on my situation too please.

1) Existing tracker margin ECB + 1.68 (Interest rate after July increase is now 2.18%)
2) Amount outstanding on your mortgage: 263,000
3) Remaining term - 19 years
4) Lender - PTSB
5) Value of your home: Approx 285,000
6) Might you trade up or overpay your mortgage? No
7) 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. No
8) What rates are you considering fixing at? Unsure to be honest - leaning towards sticking with tracker.
9) Does your house have a high BER rating which might qualify it for a lower rate? No.

 

[Brendan Burgess]

Hey Jude

Don't make it bad.
Switch from a sad lender and make it better.

1) Existing tracker margin 1.68% Tracker

2) Amount outstanding on your mortgage €140, 000

5) Value of your home €425,000

A 1.68% tracker is worth something, but not much. Assuming an ECB rate of 2%, you will be paying 3.68% soon.

@Paul F has set out the best rates here .

With an LTV below 50%, you should switch to Avant or AIB.
5 years with Avant at 2.65% or AIB at 2.35%.

Start the process now and make the decision based on the rates in operation when you get the final letter of offer.

Brendan

 

[Brendan Burgess]

1) Existing tracker margin ECB +2.3

I know ptsb are not perfect but they are offering the 5 year fixed at 2.8 (green rate) which is exactly the same as our current rate, or the 7 years at 3%. All this without solicitors or much in the way of paperwork or application hassle with moving to other banks.

2) Amount outstanding on your mortgage €170,000

Hi Twelve

With a mortgage of €170,000 , it is worth the paperwork and hassle to get good value over the remaining 19 years.

For example, you can get AIB's Green rate for 2.15% for 4 years. That is a difference of .75% or €1,300 a year or €5,000 over the 4 year period. And at the end of that period you will be with AIB which treats customers much better than ptsb does.

But, it's your call. It's how you value your time and hassle. If you decide to stay with ptsb , the 7 year rate does look best.

 

[Brendan Burgess]

Such funds as might be available for overpayment could go into a dedicated savings account for the duration for a lump sum payment during or at the end of the fixed term.

Hi twelve

It would make very little sense to have €10,000 in a savings account earning 0% while you have a mortgage for 19 years charging you 3%. It would cost you €7,500 interest.

I have inserted a new post into the thread about a unique feature of the ptsb overpayment regime.

Key Post - I have a Permanent TSB tracker – should I consider fixing?

Summary It is almost never correct to fix with ptsb If you have a large mortgage with a high margin, e.g., ECB + 1.5% or higher, you should switch to another lender and fix. @Paul F has set out the best rates here. As of September 2022, it is preferable to switch to AIB or Avant. Some general...

www.askaboutmoney.com

 

[Brendan Burgess]

8. I am hoping for 4 years fixed at 2% with PTSB

Hi Nessa

Where are you getting that rate from?


Brendan

 

[Brendan Burgess]

1) Existing tracker margin ECB + 1.68

2) Amount outstanding on your mortgage: 263,000
3) Remaining term - 19 years

5) Value of your home: Approx 285,000

Hi Richie

This is a very difficult decision.

A 1.68% tracker is not worth much, but it is worth something.

With a 92% LTV , you won't be able to switch to another lender. Do you have €7k to €10k available to pay off the mortgage and bring the LTV below 90% to enable you to switch?

You will shortly be paying at least 3.68% ( ECB of 2% + 1.68% ) and it could well rise above that. Of course, it could fall as well over the next few years. No one really knows.

Compared to the following fixed rates for existing customers:




You should switch to another lender if you can.

If you can't, then I think that the 7 year rate at 3% is the best option. You will lose your 1.68% tracker, but that is not losing that much.

Brendan

 

[Fruperman]

Apologies for the slight layout change below. We have two mortgages on our property: Tracker (moved from the last house of 0.8% + 1% to move) & Fixed rate per below. Contacted ptsb who have a 7 year fixed rate of 3% to which we could move both loans. Would love to know whether it would be worthwhile / costly to move to a new provider?

Current lender: ptsb

Tracker (moved tracker from last house: ECB + 1%)
Outstanding mortgage balance: 171k
Your current mortgage interest rate: 2.3% (ECB + 1%)
Your current monthly repayment: €1,096

Fixed portion (top up to move to current house):
The date you started your fixed-rate mortgage: 17 Feb 2020
How many years you fixed for: 5
Your current mortgage interest rate: 3.2%
Your current monthly repayment: €629

Approximate value of your property: 580k
Your property's BER: D1
Are you due to get extra cashback from your current lender in the future: No

We would like to finish all payments within 17 years.

 

[RichieRich]

Hi Richie

This is a very difficult decision.

A 1.68% tracker is not worth much, but it is worth something.

With a 92% LTV , you won't be able to switch to another lender. Do you have €7k to €10k available to pay off the mortgage and bring the LTV below 90% to enable you to switch?

You will shortly be paying at least 3.68% ( ECB of 2% + 1.68% ) and it could well rise above that. Of course, it could fall as well over the next few years. No one really knows.

Compared to the following fixed rates for existing customers:

View attachment 6619


You should switch to another lender if you can.

If you can't, then I think that the 7 year rate at 3% is the best option. You will lose your 1.68% tracker, but that is not losing that much.

Brendan

Many thanks Brendan - invaluable advice!

As you pointed out I am probably not in a position to switch.

Final question please - if fixing as an existing PTSB customer, do you have to go through a full mortgage application process (payslips, statements etc) or is it simply signing a form do you know?

Thanks again

 

[Brendan Burgess]

if fixing as an existing PTSB customer, do you have to go through a full mortgage application process (payslips, statements etc) or is it simply signing a form do you know?

It's a simple form.

Brendan

 

[Brendan Burgess]

Tracker (moved tracker from last house: ECB + 1%)
Outstanding mortgage balance: 171k
Your current mortgage interest rate: 2.3% (ECB + 1%)

Sorry, this is just meaningless.

The ECB rate was .5% when you posted, so your mortgage rate would be 1.5% if it's ECB +1%

I presume you mean something like the following
Our original tracker was ECB + .8%
We traded up so now we are paying ECB +1.8%
With an ECB rate of .5% , our total rate is 2.3%

 

[memedolanmc]

Hi Brendan,

Can you always fix a tracker mortgage? We are due to drawdown a mortgage for our new house very soon. The mortgage is 1 part tracker (ported across from our current home) and 1 part fixed. Details below. With the latest increases we were thinking that we could fix the tracker portion of our mortgage after drawdown but the mortgage advisor we are dealing with told us today we won't be able to fix it in the future. Is this correct? He said if we wanted to fix the whole amount we would have to start again with the mortgage application, obviously adding huge delays to the process. Any advice would be really appreciated. Thanks!

1) Tracker interest rate- 1.25% and 1.75% margin so now 3%

2) If you have an additional mortgage on the same property, what is the rate?

• Fixed at 2.05% for 4 years

3) Amount outstanding on your mortgage €420000
4) Remaining term: 20 years tracker, 25 years fixed
5) Lender PTSB
6) Value of your home €735000
7) Might you trade up or overpay your mortgage? No
8) Do you face any barriers to switching? No
9) What rates are you considering fixing at? Hopefully 2-3%?
10) Does your house have a high BER rating which might qualify it for a lower rate? Currently a low BER but we are going to an energy upgrade on new house.

 

[Brendan Burgess]

the mortgage advisor we are dealing with told us today we won't be able to fix it in the future.

Hi

I have not heard that in relation to ptsb. But I hadn't heard it in relation to KBC either and they effectively ban people with trackers from fixing.

predatory tsb is a predatory lender. Why are you dealing them them at all?

Is it too late to get a mortgage elsewhere from someone who is less likely to exploit you in the long term?

He said if we wanted to fix the whole amount we would have to start again with the mortgage application, obviously adding huge delays to the process.

I don't think that is correct. People often change their rate at the last minute. You shouldn't need to reapply from scratch. Just get a different offer.

When you say "mortgage advisor" do you mean a broker or a ptsb employee?

Either way, it sounds as if they are just too lazy to facilitate you.

Brendan

 

[Brendan Burgess]

This is the rate you are getting on your additional mortgage.


Ask them to apply this to the whole mortgage and see what happens.

You will be stuck with this mortgage for years so it's worth spending time and even some delay in getting it right.
If you have contracts exchanged for the purchase, then you won't lose the house.

I would apply to AIB or Avant.

Brendan

 

[Paul F]

With the latest increases we were thinking that we could fix the tracker portion of our mortgage after drawdown but the mortgage advisor we are dealing with told us today we won't be able to fix it in the future. Is this correct?

I have not heard that in relation to ptsb. But I hadn't heard it in relation to KBC either and they effectively ban people with trackers from fixing.

Does anybody here have an excerpt for their Permanent TSB tracker contract, or from PTSB's fixed-rate Ts&Cs, that confirms – or refutes – the advisor's claim that PTSB customers can't switch their tracker to fixed?

Or has anybody here tried and failed – or tried and succeeded – in switching their tracker to fixed?