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

Status
Not open for further replies.
Hi Brendan,

I would love your advice too please.

1) Existing tracker margin 1.25% Tracker
2) Amount outstanding on your mortgage €126,000
3) Remaining term 11 years
4) Lender BOI
5) Value of your home €355,000
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 would probably only think of fixing for 10 years to see mortgage finished.
 
Hi fourarms

You have a dilemma here. As a customer of Bank of Ireland, you are subject to their predatory rates for existing customers.

The 10 year fixed is 3.3% compared to 2.4% for Avant.

With €126k and only 11 years to go, is it worth switching?

You will save about €1,000 in the first year.
So you will have your legal costs covered by the end of year 2.

So, yes, you will save by switching to Avant.

I think I would start the switching process. And make a decision based on the rates at drawdown.

I think I would stick to ECB +1.25% rather than fix at 3.3% but it's close.

Brendan
 
1) Existing tracker margin .8% (as of today my rate is 1.3%)
2) Amount outstanding on your mortgage 223k
3) Remaining term 20years
4) Lender per tsb
5) Value of your home 350k
6) Might you trade up or overpay your mortgage? No in the next 10 years
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. Not really. We never got our self build signed off and didnt draw down our last stage payment. But house is completed now.
8) What rates are you considering fixing at? I havent really looked at other options
9) 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
 
Dr.Phil said:
1) Existing tracker margin .8% (as of today my rate is 1.3%)
2) Amount outstanding on your mortgage 223k
3) Remaining term 20years
4) Lender per tsb
Click to expand...

You should definitely not fix with permanent tsb.
The longest you can fix for is 5 years and after that you would be subject to their predatory lending rates for existing customers.

If you fixed for 5 years, anything could happen after that. With the tracker, you have insurance.

With 63% LTV you could switch to Avant for 10 years at 2.5%
With a margin of .8%, ECB rates have to rise to 1.7% for it to be worthwhile.
I think that is likely, so start the switch to Avant.

If it does not come through before rates rise, then stick with your tracker.

Brendan
 
Brendan Burgess said:
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:

View attachment 6456

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
Click to expand...
Thanks Brendan
 
peemac said:
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
Click to expand...
Thanks for the info it's much appreciated!
 
Brendan Burgess said:
It just shows the way that BoI has predatory rates for existing customers.

Avant would be 5 3.3years 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
Click to expand...
Thanks Brendan,

Got speaking to a decent knowledgeable guy in BoI and went through my case, but he said frustratingly for him (and for me) BoI are showing zero discretion on the rates and there can be no movement etc

I'll fix the non tracker for now and move in 6 months.
 
Hi Brendan,
I would like to get your advice on switching.
1) Existing tracker margin 2.75% (ECB+2.25 , I am one of the PTSB tracker issues cohort, still case is with FSPO)
2) Amount outstanding on your mortgage 200k
3) Remaining term 17 years
4) Lender PTSB
5) Value of your home 300k
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? I haven't really looked at other options
9) Does your house have a high BER rating which might qualify it for a lower rate? Check it here or estimate it if necessary.  I don't know, need to find out
 
Hi Joel

Your tracker is worth nothing, so don't worry about losing it.
ptsb has predatory rates for existing customers so you should switch to another lender.
The best deals are from AIB and Avant.
For example
ptsb will charge you 3% if you fix for 7 years
Avant will charge you 2.35% for 7 years

So you will save .65% of €200k in the first year or €1,300 which will cover most of the costs of switching.
And you will be out of the claws of ptsb forever.

I don't know what your Ombudsman claim is, but very few have been successful, so don't let that hold you back.
If the Ombudsman upholds your claim and tells ptsb to give you a tracker of ECB +1% for example, then ptsb will take you back on that rate, but even then, you would probably be better off on a fixed rate with Avant.

Brendan
 
Thanks Brendan, I will check with both AIB and Avant.
Mine is discounted tracker issue, its in adjudication stage through Padraic Kissane.
 
Hi Joel

All the more reason for switching. Your treatment by permanent tsb was appalling.

PTSB - Ombudsman rejects complaint on ptsb discounted tracker

This is disappointing for those involved: https://www.fspo.ie/decisions/documents/2020-0157.pdf It's worth reading the entire decision, but this is the key point which is difficult for a complainant to overcome: If the Complainants were not happy with the terms of the Letter of Approval...
www.askaboutmoney.com
 
Sure, its time to switch from PTSB (may be should have done earlier!), will be starting the process.
As for as discounted tracker issue, still hoping for a positive outcome, but I could be totally wrong!
 
Hi Brendan

Would appreciate your advice…

Value of property 360k

Have two mortgages

Lender : AIB
Interest rate 1.75% PDH tracker retain
Balance €109k
Term left :- 13 years
And
Lender : AIB
Interest rate 2.55% 5 year fixed (2 years in)
Balance €90k
Term left :- 13 years

Am considering fixing for 5 years on the tracker portion with AIB, not sure of rate as I think it is changing but was 2.45% when I enquired 26th July

Would it be wise to fix for 5 years ?

And I guess leave as is on other portion given that I’m two years into a 5 year of 2.55%

Would appreciate your thoughts ?
 
@Fredders

Whatever you do, you should do it fast, as the banks probably increase their fixed rates soon and suddenly.

If you need a valuation, get it done immediately. The >80% rate is only .1% higher at 2.55% so that would be only €200 higher. So do you want to risk the delay of getting a valuation. Tough decision.

AIB has treated its existing customers fairly in terms of mortgage rates, so you should not switch to another lender.

A 1.75% margin is worth something, but not much. With ECB rates expected to rise to 1.25% shortly - you will be paying 3%. And this is expected to rise further in the coming months.

Your Loan to Value is 55% (199/360)which gets you into the <80% LTV category.

The 5 year fixed at 2.45% seems to be the best option.

So, yes, I would recommend you fix the tracker for 5 years.

But... the break fee on your existing fixed rate mortgage is likely to be very low and may be zero. So ask for a break fee, and it will probably make sense to break out of the current fixed rate and fix the whole mortgage for 5 years.

Brendan
 
Last edited:
If, by any chance, you have €18k knocking around, you could pay it off your mortgage and bring the LTV down to 50% and pay a lower rate of 2.35% for the 5 year fixed.

Brendan
 
Hi Brendan,

Looking for advice please. Appreciate your time. These are our figs.

1) Existing tracker margin: 1.5% which will increase to 2.0% in the coming weeks
2) Amount outstanding on your mortgage: €340,000
3) Remaining term: 26yrs
4) Lender: Pepper (originally BOSI but never distressed/defaulted)
5) Value of your home: €420,000
6) Might you trade up or overpay your mortgage? Unlikely to trade up but will probably overpay at a later stage
7) Do you face any barriers to switching? No
8) What rates are you considering fixing at? 2.2% fixed for 4yrs with BOI
9) 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 it’s C3

I don’t have a crystal ball so who knows when ECB rates will come back down. Recent speculation suggests there could be as much as 2%-3% increase coming down the tracks within the next 12-24mths after the recent 0.5% increase. Feel uneasy about fixing for 10yrs+ as I’m not sure if rates will stay high for that long…

The optimist in me hopes that within 3-4yrs rates won’t be any higher than 2%-2.5% or lower

I’m reluctant to give up the tracker but I have a chunky mortgage balance so I’m wary overall as the next year or two could be painful if I don’t act now

A bit of analysis paralysis setting in…

Thanks for any suggestions
 
Brendan Burgess said:
Whatever you do, you should do it fast, as the banks probably increase their fixed rates soon and suddenly.

If you need a valuation, get it done immediately. The >80% rate is only .1% higher at 2.55% so that would be only €200 higher. So do you want to risk the delay of getting a valuation. Tough decision.

AIB has treated its existing customers fairly in terms of mortgage rates, so you should not switch to another lender.

A 1.75% margin is worth something, but not much. With ECB rates expected to rise to 1.25% shortly - you will be paying 3%. And this is expected to rise further in the coming months.

Your Loan to Value is 55% (199/360)which gets you into the <80% LTV category.

The 5 year fixed at 2.45% seems to be the best option.

So, yes, I would recommend you fix the tracker for 5 years.

But... the break fee on your existing fixed rate mortgage is likely to be very low and may be zero. So ask for a break fee, and it will probably make sense to break out of the current fixed rate and fix the whole mortgage for 5 years.

Brendan
Click to expand...
Dear Brendan, thanks so much - that’s really helpful advice - much appreciated.
 
joel said:
Thanks Brendan, I will check with both AIB and Avant.
Mine is discounted tracker issue, its in adjudication stage through Padraic Kissane.
Click to expand...
My tracker was also 2.25% I just fixed with them last week 3% for the next 7 years.
I'm not in a position to move provider unfortunately we only bought the house last year and we have a large Credit Union loan so we are stuck with them until we can get that cleared.
 
Dadof2 said:
Hi Brendan,

Looking for advice please. Appreciate your time. These are our figs.

1) Existing tracker margin: 1.5% which will increase to 2.0% in the coming weeks
2) Amount outstanding on your mortgage: €340,000
3) Remaining term: 26yrs
4) Lender: Pepper (originally BOSI but never distressed/defaulted)
5) Value of your home: €420,000
6) Might you trade up or overpay your mortgage? Unlikely to trade up but will probably overpay at a later stage
7) Do you face any barriers to switching? No
8) What rates are you considering fixing at? 2.2% fixed for 4yrs with BOI
9) 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 it’s C3

I don’t have a crystal ball so who knows when ECB rates will come back down. Recent speculation suggests there could be as much as 2%-3% increase coming down the tracks within the next 12-24mths after the recent 0.5% increase. Feel uneasy about fixing for 10yrs+ as I’m not sure if rates will stay high for that long…

The optimist in me hopes that within 3-4yrs rates won’t be any higher than 2%-2.5% or lower

I’m reluctant to give up the tracker but I have a chunky mortgage balance so I’m wary overall as the next year or two could be painful if I don’t act now

A bit of analysis paralysis setting in…

Thanks for any suggestions
Click to expand...
Your tracker "margin" is 1%.

That will always be the case (unless you give it up)

Your mortgage rate is your tracker margin plus the ecb reference rate. (Currently 0.5% giving a 1.5% effective mortgage rate)

If you fix for 4 years you will get good value for 4 years followed by bad value for the following 22 years as you will have lost the tracker and be with boi who are very expensive.

My own view is that unless you are able to fix for 20 years+ at 3%, it's crazy to look at fixing in your situation.

Ecb medium term target is 1.5-2%. So over the next 26 years your average rate should be 3%
 
Hi @Brendan Burgess - apologies for reposting but would appreciate your advice please…..

1) Existing tracker margin - ECB +0.9%
2) Amount outstanding on your mortgage
  • €110k ECB +0.9% (20 yrs remaining)
  • €70k 5 yr fixed 2.45% (14 yrs remaining)
3) Remaining term - above
4) Lender - AIB
5) Value of your home - c.€350k
6) Might you trade up or overpay your mortgage? Possibly trade up in short/medium term, 3-5 yrs-ish, depending on market
7) Do you face any barriers to switching. No, but want to remain with AIB
8) What rates are you considering fixing at? 5 yrs @ 2.45% (or 7 yrs @ 3.05%)
 
Status
Not open for further replies.
Back
Top