Key Post Should borrowers with trackers consider fixing? (General guidelines)

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Hi Roeiy

I have corrected my first response to you as I had assumed you were moving to ptsb. But, of course, AIB is taking over the Ulster Bank trackers.

I still do not understand what is happening in two years?

Why can you not do whatever it is you want to do now?

If you have a joint owner who is happy to be removed from the mortgage and if Ulster Bank will permit it, then do so now while everyone is talking to each other.

It is messy having a joint mortgage holder as you will need him to agree to fix. So that is the main issue you need to sort out.

Don't worry about fixing the rate until you have resolved that issue.

A margin of 1.1% is really borderline.

What is the loan to value? Fixing for 5 years at 2.35% looks like good value. But, it might make it awkward to do whatever it is you want to do in two years.

So for complete flexibility, stay on the tracker and revisit when you get the mortgage into your own name.

Brendan
 
HI Brendan,

I am waiting for a permanent contract in work - other than that no reason to wait two years ( I saw the rate from UB for 2 yr fix and was thinking that might make sense)

I'll stick with the tracker and get ready to take over in my own name - thanks for the help, appreciated.
 
Hi Brendan, like other, also seeking some advice:

  1. Existing tracker margin 1.1% Tracker
    2) Amount outstanding on your mortgage €100,000
    3) Remaining term 12 years
    4) Lender PTSB
    5) Value of your home €280,000
    6) Might you trade up or overpay your mortgage? No
    7) Do you face any barriers to switching. No
    8) What rates are you considering fixing at? Unsure what to do but thinking of fixing for 5 or 10 years.
 
You should not fix for 5 years with ptsb as you would lose your tracker. For the remaining 7 years, you would be subject to ptsb's predatory interest rates for existing customers.

You could fix for 10 years with Avant at 2.4%. The longest you can fix for with ptsb is 7 years at 3%.

So you will pay €600 extra in the first year with ptsb. This difference will reduce as you pay down capital, but it would take you about 3 years to recover the legal costs of switching.

So, on balance, it's probably not worth it.

With €100,000 and 12 years left, it's a close call. While the ECB rate remains below 1.9%, you are saving money on your tracker compared to fixing at 3%.

So maybe apply to Avant and if it's too much hassle or if their fixed rates increase before you get your approval, then stick with the tracker.


Brendan
 
VMcG2022! said:
2) Amount outstanding on your mortgage €100,000
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Brendan Burgess said:
So maybe apply to Avant and if it's too much hassle or if their fixed rates increase before you get your approval, then stick with the tracker.
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@VMcG2022! Note that Avant require you to have a balance of at least €100k, but you mortgage balance will be slightly below that very soon – so if you decide to try to switch to Avant, check with a couple of brokers if Avant offer any leeway around this. (If a broker tells you that you must have a balance of at least €200k, ignore them and find another broker.)

What is your Building Energy Rating (BER)? Check it here or estimate it if necessary.
 
Hi

Existing tracker margin Split at 1.95% Tracker for 70% of mortgage and fixed rate of 2.9% (expiring shortly) for 30%
2) Amount outstanding on your mortgage €200000
3) Remaining term 17 years
4) Lender BOI
5) Value of your home €400,000
6) Might you trade up or overpay your mortgage? Probably not
7) Do you face any barriers to switching. Have to wait 6 months from now due to probationary period
8) What rates are you considering fixing at? Can get a 5 year fixed at 3% from BOI or 10 year at 3.3% straight away without any legal costs or forms etc, or can wait the 6 months and move and hope rates haven't gone up too much by then. Would qualify for a Green rate, but BOI won't give that to existing customers
 
Bought a house last year, was able to take my tracker with PTSB and then take out another mortgage with them for the balance. As a result I have two mortgages with PTSB.

€129,275.38 - tracker portability mortgage, it was 1.25% but they slap on 1% for the privilege of keeping it! So the rate is 2.25% but will be increasing now to 2.75% after the ECB rate increase - 21 years left on term.

€123,225.06 - second mortgage, 5 years fixed @ 3% - there is 4 years left on it we bought last September - 24 years left on term.

Given that the tracker rate is just useless at the moment would you be inclined to jump ship onto a fixed rate for the next couple of years?

If I was still at the 1.25% I would not even dream about fixing as the rate would be low enough to absorb some interest rate rises but with a rate of 2.75% and more increases planned fixing is very attractive for 5 or 7 years.

The rate increase up to 2.75% is increasing our mortgage by €31.62 per month.

I have attached the rates available to me at present. We have a C2 house but we have done some tweaks that could bring us up to the B3 range for the green rate but 7 years sees us paying less interest with a higher monthly repayment?

Any ideas or words of advice to help me make a decision would be appreciated.

Of course Bank of Dad is telling me to fix for 7 years....he had a commercial mortgage and residential mortgage in the 80/90s so he knows what 33% rates look like!!!!!
 

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daithid2000 said:
Can get a 5 year fixed at 3% from BOI or 10 year at 3.3% straight away
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It just shows the way that BoI has predatory rates for existing customers.

Avant would be 5 years at 2.15% or 10 years at 2.4% with better overpayment options.

By my calculations, you would pay about €48,800 to BoI over the next 10 years compared to €36,000 to Avant. You are paying the price for cash back which I presume you didn't even receive.

On balance, I would take the risk and try to move to Avant. I doubt if Avant's 10 year rates will have moved up to BoI's 10 year rates over the next six months. But they might.

In the meantime, fix your non-tracker part for one year with Bank of Ireland. It will take you most of the year to effect the switch anyway so the break fee should not be too high.

BoI occasionally negotiates rates with existing customers. You could tell them that you are switching and will they give you the Green Rate to keep you.

Brendan
 
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Brendan Burgess said:
Correct. Switch from ptsb's predatory rates for existing customers to either Avant or AIB.

Brendan
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Thanks Brendan!

Switching to a different provider unfortunately is something that we just can't afford, we have €50,000 between the two of us in loans that we took out for renovating the house so I know we will not pass financial underwriting again right now with our current state of affairs.

When you come off a fixed rate are you allowed go back onto a fixed rate or are you stuck on their standard variable rate for the remaining term of the mortgage?
 
E30chick said:
When you come off a fixed rate are you allowed go back onto a fixed rate or are you stuck on their standard variable rate for the remaining term of the mortgage?
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Most lenders do offer existing customers fixed rates.
But in the past, ptsb has
1) Not offered fixed rates to existing customers
or
2) Offered outrageous rates to discourage them from fixing
or
3) Just offered their very high rates.

As, I understand, at present, they are offering their very high fixed rates to existing customers.

1659644328889.png
Very hard to know what to do. With big personal loans, you probably won't be able to switch for 7 years, so you might as well fix for 7 years. Or possibly the Green 5 year rate.

Brendan
 
E30chick said:
We have a C2 house but we have done some tweaks that could bring us up to the B3 range for the green rate but 7 years sees us paying less interest with a higher monthly repayment?
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That is confusing but don't worry about it. When they quote fixed rates, they must show the rate over the full term, but use the much higher variable rate for the non-fixed part of the term. So the shorter the fixed term, the more interest in the illustration.

If you pay a lower fixed rate, you will pay less interest during the fixed rate period.

Brendan
 
Brendan Burgess said:
Most lenders do offer existing customers fixed rates.
But in the past, ptsb has
1) Not offered fixed rates to existing customers
or
2) Offered outrageous rates to discourage them from fixing
or
3) Just offered their very high rates.

As, I understand, at present, they are offering their very high fixed rates to existing customers.

View attachment 6455
Very hard to know what to do. With big personal loans, you probably won't be able to switch for 7 years, so you might as well fix for 7 years. Or possibly the Green 5 year rate.

Brendan
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I'm starting to think that I should probably fix in the tracker for 5 years and then when the second mortgage comes off it's fixed rate in 4 years time go onto a standard variable rate for year and then when both of them are out of contract at the same time take the money elsewhere and hopefully at that point we will be in a much better position for financial underwriting with a different institution.

Makes you think what position are a lot of other people are in who are taking out big loans for retrofitting and then wants to look at amending their mortgages in the future!!
 
E30chick said:
I'm starting to think that I should probably fix in the tracker for 5 years and then when the second mortgage comes off it's fixed rate in 4 years time go onto a standard variable rate for year and then when both of them are out of contract at the same time take the money elsewhere and hopefully at that point we will be in a much better position for financial underwriting with a different institution.

Makes you think what position are a lot of other people are in who are taking out big loans for retrofitting and then wants to look at amending their mortgages in the future!!
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Bank of Dad is correct.
You probably will have zero break fee for the current fixed rate.

Lump it all together for 7 years @ 3%. Then in 7 years you will probably have options to switch. Or maybe PTSB will treat current customers the same as new customers by then

ECB stated aim is for rates to be 1.5-2% in the medium term. Personally I don't think you will see a 3% fixed rate option again
 
peemac said:
Bank of Dad is correct.
You probably will have zero break fee for the current fixed rate.

Lump it all together for 7 years @ 3%. Then in 7 years you will probably have options to switch. Or maybe PTSB will treat current customers the same as new customers by then

ECB stated aim is for rates to be 1.5-2% in the medium term. Personally I don't think you will see a 3% fixed rate option again
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What's medium term in financial speak?

I guess I am looking long term as there is still 21 years left on the mortgage.

In my head I'm trying to decide do I stick with a tracker, ride out interest rates of up to 4.50% (base 2.25% mortgage plus whatever ECB is) in the hope that they will go back down a little bit in the next couple of years?

I was looking at the historical ECB rates to try and work out an average but again nobody can predict the future!!
 
1) Existing mortgage rate .75% Tracker
2) If fixed, when does the fixed rate expire?
3) Amount outstanding on your mortgage € 200,000
4) Remaining term 13 years
5) Lender AIB
6) Value of your home € 495,000
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. NO
9) What rates are you considering fixing at? Don't know
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

Rental
1) Existing mortgage rate .95% Tracker
2) If fixed, when does the fixed rate expire?
3) Amount outstanding on your mortgage € 100,000
4) Remaining term 11 Years
5) Lender AIB
6) Value of your home € 210,000
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. NO
9) What rates are you considering fixing at? Dont Know
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
 
Dealing with your home loan first.

You have a good value tracker.
You are with a good lender - although that matters less when you have a tracker.

You could fix with AIB as follows:

1659707940647.png

How does 5 years at 2.35% work out?
As your margin is 0.75% , by fixing, you will pay more while the ECB rate remains below 1.6%. It is currently 0.5%

10 years seems wrong. ECB rates would need to rise to 2.35% and stay above that level.

They probably will temporarily exceed that and then come down again but not as low as they are today.

There would be no point in switching to Avant for 5 years at 2.1%.

It might be worth switching for 10 years at 2.4%

So...
Apply to Avant to fix for 10 years.
If they raise their fixed rates before you draw down the money, stay as you are on the tracker.

Brendan
 
STAR61 said:
Rental
1) Existing mortgage rate .95% Tracker
2) If fixed, when does the fixed rate expire?
3) Amount outstanding on your mortgage € 100,000
Click to expand...

I think that AIB would charge you the buy to let rates. If you switched to another lender, you would definitely be charged the buy to let rates.

1659708401599.png

So stay as you are.
 
E30chick said:
What's medium term in financial speak?

I guess I am looking long term as there is still 21 years left on the mortgage.

In my head I'm trying to decide do I stick with a tracker, ride out interest rates of up to 4.50% (base 2.25% mortgage plus whatever ECB is) in the hope that they will go back down a little bit in the next couple of years?

I was looking at the historical ECB rates to try and work out an average but again nobody can predict the future!!
Click to expand...
Medium term is 10-15 years imo.
The zero rates in over the past few years were highly unusual and unlikely to return.

2.25% tracker is not worth worrying about. Some standard variable rates are lower than this

I'd be taking the 7 year fix
 
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