Explaining ECB Tracker rates

[conor71]

Hi Folks, I am getting confused as to the number used in calculating the Tracker rates for various banks. At the moment i am with Ulster bank, on their Ufirst account. On their website they have these rates:

Mortgage Type Typical APR 20 Years Margin above ECB

ufirst Tracker Mortgage < 80% 4.2% + 0.85

ufirst Tracker Mortgage > 80% 4.4% + 1.05

As far as I am aware the ECB rate at the moment is 3.25% right? But by the maths above does this not look like they are suggesting 3.35%?

Or am I wrong in thinking the current ECB rate is 3.25%? I went onto the ECB site and they are actually quite confusing….there are 3 key rates, .4.25 %, 3.25 % and 2.25 %???

Thanks, Confused!

 

[Sarah W]

Re: Explaining EBC Tracker rates

It's because the APR has to indicate the typical cost of the total finance over the term of the mortgage (assuming rates do not change during the term) so costs such as vacating the deeds, etc have to be factored in which increases it slightly. The actual rates above are 4.05% and 4.3% respectively.

Sarah

www.rea.ie

 

[conor71]

Thanks Sarah, that makes sense!

Conor