Cost of giving up my tracker Rate

S

ssiaman

Registered User
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Hi,

I am in a bit of a dilema. We would like to upgrade to a bigger house.

We have two houses:

1. one variable Rate mortgage which is currently rented. mortgage is 140k and house is worth maybe 200k. 23 yrs left on mortgage.

2. the other one is where I live and it is a tracker (ECB +.75) . worth about 250k and mortgage balance is 115k. 18 yrs left on mortgage.

We need to sell one of the houses. Don't want to sell the first house as it is being rented and does not have as much equity.

The problem is if I sell the house with the tracker rate and borrow this money again aon SVR gainst a new property what would be the estimated cost of this decision. Say there will be a difference of 3% between SVR and tracker. How much would that cost me. sorry not too good at the maths...

Regards,
Darragh
 
It is impossible to accurately estimate the cost to you of this decision, far too many variables but using the figures you have given

115k / 18 years @1.75% would have total repayments of around €134k
115k / 18 years @4.75% would have total repayments of around €171k.

Total cost difference to you of €37k.

A 3% difference is on the extreme side though, this is assuming the ECB rate will not rise during the term and also assumes a variable rate of 4.75% for the term.

www.moneybackmortgages.ie
 
Another thing to factor into the equation is the rentability of the house wher you live.
If you sell your investment property, and buy another house, will the rent that you can realistically achieve for your current PPR cover the mortgage ?
 
Thanks. That does help me a lot.

Both houses if rented today would well cover existing mortgages. The house that is renting at the moment has good tenants and paying good rent so I am reluctant to sell and force them out. My current PPR house is in a better area worth more and will probably rent for the same amount as the other one.

I thought a figure of 3% difference was a fair one considering banks are moving to up interest rates already. They will always have the excuse to continue to do this in order to survive. Instead they will be coming back to tax payer.
 
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