Other than ptsb, no other bank moving on making a deal with tracker holders....hard to fathom..
I think there are too many complicating factors.
If I'm in my 40s in a 4 bedroom house with no more kids to come and no real inclination to move then I'll most likely stay on the tracker for the full term.
If I'm single, in a relationship without kids or only beginnning a family and live in a two bedroom apartment/house it's unlikely to be too long before I'm looking to trade up and therefore lose my tracker.
How can you estimate how long the customer is likely to stay on the tracker? It's a very individual issue.
Another major factor is that we have been in a downward trend for 4 years and people see no return to normal circumstances, ever. The downturn will have to end at some point and normal banking conditions will resume. The banks will be well capitalised and will take in deposits at a lower rate than what they take in on trackers. It's hard to see now, but we'd be in a ridiculous situation if banks are still paying much higher than ECB base rate to depositors in 3-4 years time.
Added to this is the question of whether the rate being tracked will even exist in the medium to long term.
An immediate solution to this issue would be offset mortgages across the board. Say I have a tracker mortgage with AIB costing 1.75% and I can get a deposit rate of 4% from them. The trouble is I cannot justify putting my money on deposit with AIB due to the credit rating - if they went bust I'd owe the mortgage and lose the deposit.
If, however, they offered me the 4% on an account that would offset the mortgage in a default situation they would instantly have increased the credit rating of the deposit to AAA to me at no cost to themselves and become much a more attractive place to place funds.