Key Post I have a Bank of Ireland tracker – should I consider fixing?

1) Existing tracker margin. ECB + 0.9
2) If you have an additional mortgage on the same property, what is the rate? No
3) Amount outstanding on your mortgage : €250k
4) Remaining term: 15yrs
5) Lender : B of I
6) Value of your home: € 390k
7) Might you trade up or overpay your mortgage? Maybe overpay, might trade down in 10yrs
8) Do you face any barriers to switching? No
9) What rates are you considering fixing at? 3.3% over 7 or 10yrs
10) Does your house have a high BER rating which might qualify it for a lower rate?C1

should we ride the wave with tracker or fix for 7-10yrs?
 
@Rozzer1

As an existing customer of BoI , you are caught by their predatory rates for existing customers.

So, I think you should switch to another lender or stay on the tracker.

These are the rates I see for existing customers with an LTV of <80% ( I don't see a 7 year rate?)
1666532539753.png
If you were a new customer, you could fix for 4 years at 2.2%!

If ECB rates are higher than 2.4% for the longer term, and I have no idea if they will be or not, then you would be better fixing for 10 years at 3.3%.

You definitely should not fix for 5 years as you will be vulnerable to BoI's predatory rates for the remaining ten years.

Brendan
 
Brendan Burgess said:
@Rozzer1

As an existing customer of BoI , you are caught by their predatory rates for existing customers.

So, I think you should switch to another lender or stay on the tracker.

These are the rates I see for existing customers with an LTV of <80% ( I don't see a 7 year rate?)
View attachment 6767
If you were a new customer, you could fix for 4 years at 2.2%!

If ECB rates are higher than 2.4% for the longer term, and I have no idea if they will be or not, then you would be better fixing for 10 years at 3.3%.

You definitely should not fix for 5 years as you will be vulnerable to BoI's predatory rates for the remaining ten years.

Brendan
Click to expand...
Many thanks for your reply.
 
1) Existing tracker margin. (This is set in your mortgage contract.)
ECB +1.25
2) If you have an additional mortgage on the same property, what is the rate?
N/A
3) Amount outstanding on your mortgage
153000
4) Remaining term
19 years
5) Lender
BOI
6) Value of your home
240000
7) Might you trade up or overpay your mortgage?
No
8) Do you face any barriers to switching?
No. Paying for house valuation could be an issue.
9) What rates are you considering fixing at?
Just looking at options
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
 
1) Existing tracker margin ECB + 1.1%
2) Amount outstanding on your mortgage 223k
3) Remaining term 15 years
4) Lender BOI
5) Value of your home 400k
6) Might you trade up or overpay your mortgage? Very unlikely
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? Our tracker is going to go up to a rate of 3.1% now with the 3 recent increases. BOI offering 10 yr fixed at 3.3% but think too high so considering switching.
9) Does your house have a high BER rating which might qualify it for a lower rate? Guessing C rating. New build in 2007.

Hi Brendan. My question is should we be prepared to loose our tracker and fix with BOI or another lender and also for how long ie 5 or 10 yrs?. Boi have confirmed if we fix we loose our tracker permanently. We can't really afford to run into high rates. Your advice is much appreciated. Thanks.
 
Current lender:
BOI
Outstanding mortgage balance (how much you still owe): 395,206
Approximate current value of your property: 750,000
ECB + 89 bps. Maturing 30.6.2041 so 18.5 years to run
Should I hang on and take the pain on the ECB now on the basis I have too long to go when i come off out of a fix if i take one now ?
BER - not sure but prob quite bad - period house renovated in 2006
 
@Walshee

As a BoI customer, you are really caught in a bind. In theory, you should switch. But, it will take some time to switch and rates may well have risen by then.

Walshee said:
BOI offering 10 yr fixed at 3.3% but think too high so considering switching.
Click to expand...

Walshee said:
We can't really afford to run into high rates.
Click to expand...

As you can't afford high rates, go for the security of the 10 year fixed rate. After the fixed period is up, you will have only 5 years left on your mortgage and the balance will be much smaller so a higher rate will not have such a big impact.
 
@jim masters

jim masters said:
ECB + 89 bps. Maturing 30.6.2041 so 18.5 years to run
Click to expand...

I think you are right to hold onto the tracker. The only alternative with BoI would be to fix for 10 years @3.3% so you would have only 8 years left when the fixed rate is up. Definitely don't fix for a shorter term.

Look at switching and if the rates have risen by the time you are ready to draw down the money, stay with the tracker.

Brendan
 
Firstly thanks so much for all the advice!

1) Existing tracker margin. ECB + 1.1%
2) Additional mortgage? Not applicable
3) Amount outstanding on your mortgage 192000
4) Remaining term 20.5y
5) Lender Bank Of Ireland
6) Value of your home 355000
7) Might you trade up or overpay your mortgage? I'm open to overpaying €300 extra per month
8) Do you face any barriers to switching? No
9) What rates are you considering fixing at?5 year fixed @ 2.65% with AVANT or 10 year @ 3.3% with BOI

10) Does your house have a high BER rating which might qualify it for a lower rate?  no
Many thanks for viewing. Really appreciate it. My concern are the switching fees of roughly €1700 before and after the fixed term from the tracker rate to AVANT. So, about €3400 to switch twice if I don't stay with AVANT afterwards.

Thanks again, hugely appreciated.
 
Brendan Burgess said:
@Walshee

As a BoI customer, you are really caught in a bind. In theory, you should switch. But, it will take some time to switch and rates may well have risen by then.





As you can't afford high rates, go for the security of the 10 year fixed rate. After the fixed period is up, you will have only 5 years left on your mortgage and the balance will be much smaller so a higher rate will not have such a big impact.
Click to expand...
Thank you very much for your quick reply and advice.

I was wondering why a 5 year fixed rate doesn't seem to be advised if leaving a tracker. Thanks again.
 
1) Existing tracker margin ECB + 1.25%
2) Amount outstanding on your mortgage 300k
3) Remaining term 15yrs
4) Lender BOI
5) Value of your home 550-600k
6) Might you trade up or overpay your mortgage? Unlikely (unless come into lump sum of money in which case would consider overpaying mortgage).
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? 5 yr fixed 3.00% or 10 yr fixed at 3.3%
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. Guessing it is B3 as recently insulated house.

Hi Brendan - would really appreciate your advice on whether we should ride it out on the tracker or fix - and if fix should we go 5 yr or 10 yr?
 
@boonfi

boonfi said:
5 year fixed @ 2.65% with AVANT or 10 year @ 3.3% with BOI
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boonfi said:
1) Existing tracker margin. ECB + 1.1%
Click to expand...

boonfi said:
4) Remaining term 20.5y
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If you can switch to Avant at these rates, then I would recommend it. It's very likely that Avant will be a lot cheaper than BoI after 5 years.

It will take about 18 months to cover the cost of switching.

The problem is that it takes time to get the switch done and the rate may have gone up. But I think it's worth going for.

If the switch does not come through before the rate goes up, stay on the tracker.

I don't think it's worth paying 3.3% to BoI and losing the tracker. You will then have 10 years exposed to BoI's predatory rates for existing customers.

However, if your finances are tight and you can afford 3.3% but not any more than that, then probably fix.

Brendan
 
ECB MRO is at 2% and will almost certainly go higher. I don't rule out that it falls in 2023 or 2024 if the economy crashes but there is also a risk that it will stay high and for long too.

Tony B said:
8) What rates are you considering fixing at? 5 yr fixed 3.00% or 10 yr fixed at 3.3%
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I'd have no regrets taking BoI at 3% for five years, in fact I've just done so myself. I think it's the right balance between protecting against big near-term increases while also ensuring you're not locked in for a long time if rates fall sustainably.
 
Walshee said:
I was wondering why a 5 year fixed rate doesn't seem to be advised if leaving a tracker. Thanks again.
Click to expand...

You have 15 years left on your mortgage.
If you fix for 10 years, you will be subject to boi's predatory rates for existing customers for only 5 years and the balance will be much smaller.

If you fix for 5 years, you will be subject to their predatory rates for 10 years.

It's not worth giving up a tracker for 10 years of BoI's predatory rates

brendan
 
@Tony B

Tony B said:
2) Amount outstanding on your mortgage 300k
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Tony B said:
3) Remaining term 15yrs
Click to expand...

Tony B said:
8) What rates are you considering fixing at? 5 yr fixed 3.00% or 10 yr fixed at 3.3%
Click to expand...

With 15 years left, it is very risky to give up a tracker to fix for 5 years. You will have 10 years of BoI's predatory rates when the fixed rate is up.

With a large mortgage, I think you should look at switching to Avant or AIB if you are going to fix

The risk of course is that rates may rise before the switch is completed. However, in your case, a margin of 1.1% is not too bad.

Brendan
 
Brendan Burgess said:
You have 15 years left on your mortgage.
If you fix for 10 years, you will be subject to boi's predatory rates for existing customers for only 5 years and the balance will be much smaller.

If you fix for 5 years, you will be subject to their predatory rates for 10 years.

It's not worth giving up a tracker for 10 years of BoI's predatory rates

brendan
Click to expand...
Thanks Brendan. Really appreciate the advice.
 
Brendan Burgess said:
@Tony B







With 15 years left, it is very risky to give up a tracker to fix for 5 years. You will have 10 years of BoI's predatory rates when the fixed rate is up.

With a large mortgage, I think you should look at switching to Avant or AIB if you are going to fix

The risk of course is that rates may rise before the switch is completed. However, in your case, a margin of 1.1% is not too bad.

Brendan
Click to expand...
Thanks Brendan, I appreciate the advice.

Given some analysts are forecasting the 3 month Euribor will bobble around at just over 3% for the longterm am I then correct in thinking a 10 yr fix of 3.3% should be more attractive than staying with a tracker which is ECB + 1.25% (assuming the analysts forecasts re correct of course!)?
 
Tony B said:
Given some analysts are forecasting the 3 month Euribor will bobble around at just over 3% for the longterm
Click to expand...

I don't pay that much attention to these forecasts. (It's not 3 month Euribor by the way, it's an ECB rate)

If you are going to fix, then fixing for 10 years is better than 5 as you won't have much time left on the mortgage subject to BoI' predatory rates.

Will ECB +1.25% be higher than 3.3% over the next 10 years? I just don't know and no one does.

The advantage of the fix is that you will have certainty, even if it turns out more expensive.
The advantage of the tracker is that you will have it for the last 5 years of your mortgage and you have the flexibility to overpay without penalty at any time.

Brendan
 
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