Key Post I have a tracker managed by Pepper – should I keep it or switch lender?

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marzic

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Moderator's note: If your mortgage is with Pepper, you do not have the option of fixing your rate (unless you switch to another lender and give up your tracker).

However, in December 2022 Pepper said that it would allow some of its customers to fix their monthly repayments. (This is not the same as fixing your interest rate.) See this thread and check with Pepper if you are eligible:

Pepper to offer fixed repayments to "customers under pressure"

Moderator's note: the headline of the Irish Independent article is incorrect: Pepper are offering "fixed reduced monthly repayments", not fixed rates, to struggling customers...
www.askaboutmoney.com

If you want to ask whether you should switch to another lender or keep your tracker, please provide the following information:
1) Existing tracker margin. (This is set in your mortgage contract.)
  • If your tracker margin is 1%, please state it in the following format to avoid confusion: ECB + 1%
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?



1) Existing tracker margin. (This is set in your mortgage contract.) ECB + 0.75%
  • If your tracker margin is 1%, please state it in the following format to avoid confusion: ECB + 1%
2) N/A
3) Amount outstanding on your mortgage 93000
4) Remaining term 12yrs
5) Lender - Pepper (former Halifax/BoSI)
6) Value of your home 320000
7) Might you trade up or overpay your mortgage? No/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? approx 2.5% would bring monthly to €750, which would start to impact savings and CoLI
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. C1

Current repayments: 693/month (incl first ECB increase Aug 22)
3 kids - 15,13,11
thanks in advance
 
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When ECB rates hit 2% , you will be paying 2.75%

Let's say you switch to AIB and fix for 5 years at 2.35%

So you will save .4% or €372 in the first year. (Of course you would save more if ECB rates exceed 2%)

Not sure that it's worth all the hassle of switching for that. And a tracker of .75% margin has some value. So after 5 years you might be delighted to have ECB +.75%. The non-tracker rates could well be in excess of that.

Also, given that you have a relatively small mortgage and a short term to go, and that you might overpay, I would just stick with the tracker.

You could initiate the process of switching to AIB and then make a call when you have to press the button. So why not apply to AIB now and see how it pans out.

Brendan
 
I currently have a split mortgage with Pepper (formally BOS). I was thinking of switching to a 5-7 year fixed rate. Details as follows

1) Existing tracker margin. (This is set in your mortgage contract.)
  • 1.5% over ECB
2) If you have an additional mortgage on the same property, what is the rate?
  • 1.00% over ECB
3) Amount outstanding on your mortgage
  • €133,000 (+1.5% over ECB) €88,500 (1%)
4) Remaining term 20 years
5) Lender Pepper Finance
6) Value of your home €500,000
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, you are now renting out the property. No
9) What rates are you considering fixing at? 2.8% BOI 7 year fixed
10) Does your house have a high BER rating which might qualify it for a lower rate? BER is C2
 
You could look at AIB or Avant who do not discriminate between new and existing customers.

For example, you could fix with Avant for 5 years at 2.65%

You have an average margin of 1.3%

So when the latest rise kicks in, you will be paying 3.3% . This could rise or fall.

It's very hard to know. The 1.3% tracker is worth something especially with 20 years left on your mortgage.

It really is a toss-up. I think I would apply to Avant, and if their rates have risen by the time you draw down the mortgage, then stay on your tracker.

Brendan
 
Brendan Burgess said:
You could look at AIB or Avant who do not discriminate between new and existing customers.

For example, you could fix with Avant for 5 years at 2.65%

You have an average margin of 1.3%

So when the latest rise kicks in, you will be paying 3.3% . This could rise or fall.

It's very hard to know. The 1.3% tracker is worth something especially with 20 years left on your mortgage.

It really is a toss-up. I think I would apply to Avant, and if their rates have risen by the time you draw down the mortgage, then stay on your tracker.

Brendan
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Thanks Brendan for your advice
 
mitzymoo said:
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. No
Click to expand...

@mitzymoo When you first posted (now deleted), you said:
Your current monthly repayment: €221 (interest only) + €200 capital repayment
Click to expand...

Does this mean that a portion of your mortgage is warehoused?
 
Hi Paul,

No it is not warehoused. When I took the mortgage out they were offering interest only for the life of the mortgage. I am making capital repayments on this but could potentially stop at any time.
I was also considering leaving the smaller mortgage at interest only & instead overpaying the larger part of the mortgage as it at the higher margin.
I also have a car loan finishing next year so could increase my overpayment by a further €330 a month.
If I could clear the higher rate amount within say 12 years I could then clear the interest only part over the remaining 8.
So very confusing which is the best action to take!
 
I currently have a Pepper tracker and I'm thinking of fixing with PTSB at 2.7 for 4 years. I suspect that rates will rise again pushing our repayments higher, but not sure how quickly they might fall over the following period. Also, there is no contribution to switching costs or cashback offers with the PTSB 2.7% rate. Some rates are higher with other banks, but those rates sometimes come with circa €2,000 contribution to legal costs or cashback offers etc.

Not sure whether to go ahead with fixing, grateful for any views.

Details as follows:

1) Existing tracker margin. (This is set in your mortgage contract.) ECB +1.4
2) If you have an additional mortgage on the same property, what is the rate? No
3) Amount outstanding on your mortgage: €153,000
4) Remaining term: Slightly less than 15 years
5) Lender: Pepper
6) Value of your home: €325,000
7) Might you trade up or overpay your mortgage? Hoping to reduce it significantly, or even fully paid off, by the end of the 4-year fixed
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. No.
9) What rates are you considering fixing at? PTSB 2.7% 4-year fixed
10) Does your house have a high BER rating which might qualify it for a lower rate? Don't know.
 
@James Hunt

Normally, you should not switch to ptsb as they have very high rates for existing customers.

But your case might be the exception, because you don't intend to be with them beyond the 4 years you intend to fix for.

But overall, if you intend to overpay your mortgage within the next 4 years, I think you should probably stay as you are.
You avoid the €1,500 cost of switching and any early repayment fee.

Brendan
 
Brendan Burgess said:
@James Hunt

Normally, you should not switch to ptsb as they have very high rates for existing customers.

But your case might be the exception, because you don't intend to be with them beyond the 4 years you intend to fix for.

But overall, if you intend to overpay your mortgage within the next 4 years, I think you should probably stay as you are.
You avoid the €1,500 cost of switching and any early repayment fee.

Brendan
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Thanks indeed Brendan, the more I think about it the more it seems a marginal case at current rates, savings won't be that great and maybe staying put is the better option - even with this week's rate increase.
 
Brendan

I am currently on a tracker with Pepper Finance and I am considering moving to a 4 year fixed rate with Permanent TSB who I am a customer of;
1. My Tracker margin is 1.5%.
2. There is no additional Mortgages or charges on the property.
3. Amount outstanding on Mortgage €203,000.
4. Remaining term is 10 years,
5. Pepper
6. Value of your home: €500k
7. No Barrier to switching.
8. I think the 4 year fixed rate with permanent TSB is my best option.
9. The Ber rating for the house wouldn't be great.

Should I fix with different entity, or should I stay with Pepper.

Regards Jungle
 
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Jungle said:
I am currently on a tracker with Pepper Finance and I am considering moving to a 4 year fixed rate with Permanent TSB who I am a customer of;
1. My Tracker margin is 1.5%.
2. There is no additional Mortgages or charges on the property.
3. Amount outstanding on Mortgage €203,000.
4. Remaining term is 10 years,
5. Pepper
6. Value of your home: €500k
7. No Barrier to switching.
8. I think the 4 year fixed rate with permanent TSB is my best option.
9. The Ber rating for the house wouldn't be great.

Should I fix with different entity, or should I stay with Pepper.

Regards Jungle
Click to expand...
Any views on fixing this tracker
 
@Jungle

Sorry I missed that.

A 1.5% tracker isn't worth very much, so yes, you should switch.

ptsb has a long history of mistreating its customers, and although it has improved recently, I would not trust them. You may find that you just have to move again in 4 years.

Ptsb's 4 year rate is 3.25% with 2% cash back. What alternatives are there?

Avant 3.55% for 4 years
AIB 3.55% for 5 years
BoI 3.25% for 5 years with 2% cash back now and 1% in 5 years

You will get €4,000 from ptsb or BoI.

So BoI and ptsb seem like the best value despite their mistreatment of customers.

You will probably have to spend half the cash back at the end of the fixed term to switch to another lender.

The other issue is that ptsb and BoI are behind the other lenders in raising rates.
There is a risk that you could apply to ptsb and be just about to confirm the rate when rates go up and you will be back to square 1.

So I would suggest - apply to ptsb or BoI but also have AIB or Avant as a back up.

Brendan
 
Brendan Burgess said:
@Jungle

Sorry I missed that.

A 1.5% tracker isn't worth very much, so yes, you should switch.

ptsb has a long history of mistreating its customers, and although it has improved recently, I would not trust them. You may find that you just have to move again in 4 years.

Ptsb's 4 year rate is 3.25% with 2% cash back. What alternatives are there?

Avant 3.55% for 4 years
AIB 3.55% for 5 years
BoI 3.25% for 5 years with 2% cash back now and 1% in 5 years

You will get €4,000 from ptsb or BoI.

So BoI and ptsb seem like the best value despite their mistreatment of customers.

You will probably have to spend half the cash back at the end of the fixed term to switch to another lender.

The other issue is that ptsb and BoI are behind the other lenders in raising rates.
There is a risk that you could apply to ptsb and be just about to confirm the rate when rates go up and you will be back to square 1.

So I would suggest - apply to ptsb or BoI but also have AIB or Avant as a back up.

Brendan
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Thanks Brendan, what do you mean by 1.5% tracker not been worth very much?
 
Jungle said:
Thanks Brendan, what do you mean by 1.5% tracker not been worth very much?
Click to expand...

Banks generally set their fixed and variable mortgage rates at about 2 percentage points above the ECB base rate. (That's a long-term average.)

Therefore, a tracker that is 1.5 percentage points above the ECB base rate will probably only be slightly better value than a regular mortgage over the long term. But of course there are no guarantees one way or the other.
 
Hi Brendan,

1) Existing tracker margin. (This is set in your mortgage contract.)
  • If your tracker margin is 1%, please state it in the following format to avoid confusion: ECB + 1% (+1%)
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." (NO ADDITIONAL MORT)
3) Amount outstanding on your mortgage (170K)
  • If you have both a tracker and a second mortgage on the property, specify the amount outstanding on each
4) Remaining term (15 YEARS)
5) Lender (BOS , START & NOW PEPPER)
6) Value of your home (460K)
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, you are now renting out the property.(NO)
9) What rates are you considering fixing at? (UNSURE)
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)

Just wondering what your options would be with the above..

Thank you
 
@Gelsthe

With the ECB rate at 2.5 %, you are currently paying 3.5%.

The problem is that we don't know how interest rates will go in the medium to long term. Economists have been very poor at forecasting. The ECB rate is more likely to rise than fall in the short term but you have 15 years left on your mortgage.

You can't fix with Pepper, so you would have to switch to another lender.

You have an LTV of <50%

Fixing for a short term e.g. 5 years, is not a good idea, as you would then lose the tracker for the remaining 10 years.

You could fix with Bank of Ireland for 10 years at 3.55%. You would then be vulnerable to Bank of Ireland's exploitative treatment of existing customers for the remaining 8 years. It wouldn't matter too much as your balance will be lower, but then as your balance will be lower, it won't justify switching from BoI to a cheaper rate. But Bank of Ireland is behind the other lenders in this rate cycle and so by the time you get approval, rates may have risen anyway.

If you look at a fair lender like AIB or Avant, for 7 years fixed they are charging 3.95% and 4.05%. I see no point in going to the hassle and expense of switching to them.

So overall, it's a close call, but you are probably better off sticking with your tracker.

Brendan
 
Brendan Burgess said:
@Gelsthe

With the ECB rate at 2.5 %, you are currently paying 3.5%.

The problem is that we don't know how interest rates will go in the medium to long term. Economists have been very poor at forecasting. The ECB rate is more likely to rise than fall in the short term but you have 15 years left on your mortgage.

You can't fix with Pepper, so you would have to switch to another lender.

You have an LTV of <50%

Fixing for a short term e.g. 5 years, is not a good idea, as you would then lose the tracker for the remaining 10 years.

You could fix with Bank of Ireland for 10 years at 3.55%. You would then be vulnerable to Bank of Ireland's exploitative treatment of existing customers for the remaining 8 years. It wouldn't matter too much as your balance will be lower, but then as your balance will be lower, it won't justify switching from BoI to a cheaper rate. But Bank of Ireland is behind the other lenders in this rate cycle and so by the time you get approval, rates may have risen anyway.

If you look at a fair lender like AIB or Avant, for 7 years fixed they are charging 3.95% and 4.05%. I see no point in going to the hassle and expense of switching to them.

So overall, it's a close call, but you are probably better off sticking with your tracker.

Brendan
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Hi Brendan,

Thanks for taking the time to reply, I guessed there wouldn't be an option as such but it is reassuring to hear it from yourself..
We've done well upto now with the tracker so best I look at it overall and hope this passes fast!

Thanks again.

J.
 
Our mortgage was previously with Ptsb, we were paying interest only for a period of time. Our mortgage was then sold onto Pepper. We are currently on a tracker. Since October last year our monthly repayments have gone up by €180. Pepper cannot offer us a fixed rate. We are under severe pressure trying to keep everything paid money wise.. our current interest rate which tracks ecb rate is now 5.75%. On another forum I was advised to contact a broker & switch our mortgage to another provider who could offer us a fixed rate.. is it worthwhile holding onto our tracker? I would really appreciate any advice on this
 
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