Key Post I have an AIB tracker – should I consider fixing?

1) Existing tracker margin. ECB + 0.85%

2) If you have an additional mortgage on the same property, what is the rate? NO

3) Amount outstanding on your mortgage €114, 500

4) Remaining term 12 YEARS
5) Lender AIB
6) Value of your home €800,000
7) Might you trade up or overpay your mortgage? NO
8) Do you face any barriers to switching? 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? NO
11) How well could you handle a further 2% rise in the ECB rate? Just about manageable short term.

Thank you for any advice.
 
You will shortly be paying 5.1% (ECB 4.25% + 0.85%)

Here are the main options for fixing with AIB

1691579301087.png
By fixing for 5 years, you would save 0.45%

If ECB rates rise further, you will save a bit more.


Let's say you fix at 4.65% and the ECB rate falls to 3%. You would be paying 4.65% instead of 3.85%.

While it is very difficult to forecast interest rates, in the medium term, I think that there is more scope for rates to fall than to rise.

So, on balance, I think you should stick to your tracker.

Brendan
 
1. Split mortgage.
1A. Ecb Tracker now at 6.25%
1B. Fixed at 2.35%. This rate ending in June 2024.
2. Outstanding.
Tracker: €151000.
Other: €38000.
3. Remaining term.
Tracker expires March 2043.
Other expires March 2035.
4. Lender AIB.
5. Value. €500k+
6. We might try to overpay our loan. Yes.
7. Barriers to switch. No.
8. What rates fix at. Don't plan on fixing.
9. BER rate is pretty poor.

Hi Brendan,
Please see above.
We are barely making ends meet atm.
Any advice please.
Thanks.
 
Last edited by a moderator:
Neevis said:
1A. Ecb Tracker now at 6.25%
Click to expand...

So you are on a rate of ECB +1.75% ? Is that correct?

This is not a very valuable tracker, so you should not worry about giving it up.

Your LTV is <50% , so here are the rates available to you.

1707994560830.png

These rates are odd as are all mortgage rates. The variable rates should be lower than the fixed rates in a period when market rates generally are expected to fall.

So I would expect the fixed rates to fall but there is no guarantee.

A variable rate below the ECB rate makes no sense so maybe this will be increased.

But, on balance, I would just switch the tracker bit to the variable rate.
 
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Brendan Burgess said:
So you are on a rat of ECB +1.75% ? Is that correct?

This is not a very valuable tracker, so you should not worry about giving it up.

Your LTV is <50% , so here are the rates available to you.

View attachment 8450

These rates are odd as are all mortgage rates. The variable rates should be lower than the fixed rates in a period when market rates generally are expected to fall.

So I would expect the fixed rates to fall but there is no guarantee.

A variable rate below the ECB rate makes no sense so maybe this will be increased.

But, on balance, I would just switch the tracker bit to the variable rate.
Click to expand...
Hi Brendan, yes it's ECB + 1.75%.
Thanks for the advice, appreciate it.
 
existing tracker margin .75% (I’ve been told AIB add an additional 1% to retain their tracker, so I think it would be 1.75% ontop of the ECB rate)
2) Amount outstanding on your mortgage 197K
3) Remaining term 16yrs
4) Lender AIB
5) Value of your home current home 650k
6) Might you trade up or overpay your mortgage? Yes
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? AIB Green 5 year at 3.2
9) Does your house have a high BER rating which might qualify it for a lower rate? Yes
Hi, I’d be soo grateful for your reply. Currently sale agreed on our own home, which has a tracker mortgage of 197k remaining on it. Looking to buy a new house and wondering whether we should retain the tracker portion of our mortgage or give it up. Tracker portion would be 197k, with a new additional mortgage of 250k. ECB currently 2.15, with .75 margin. AIB would ad an additional 1% to retain it. So that portion of the mortgage would be 3.9% for 16 years. We would be getting a new mortgage for the balance on our new home of 250k. Currently considering the AIB 5 year Green mortgage LTV <50% at 3.2%. Would it not therefore be cheaper to get the whole new house mortgage on the Green mortgage rate, rather than paying 3.9% for the tracker portion? I’d be soo grateful for any advice as I am confused by it all. Thanks soo much.
 
A margin of 1.75% is not really cheap anymore.

AIB is expensive for non-green mortgages but good value for its green customers. As you qualify, your decision to go for a green rate of 3.2% for the whole mortgage is correct.

One thing you might consider is the Avant Flex mortgage which tracks the euribor rate.

Best Buy - The Avant Tracker mortgage is a clear Best Buy and people should consider switching to it

The fee to switch in contract takes the good out of it at the minute What is the balance on your mortgage? What fee are they quoting? Which lender?
www.askaboutmoney.com

I assume your LTV will be below 80%? If so, your margin would be .9% so your rate for the next year would be 2.98%

But you would have a margin of 0.9% for the life of your mortgage. With a mortgage of €450k, it's worth considering.

Of course, euribor rates could rise and you might regret not fixing with AIB. But they could also fall and you would be paying even less.

The Avant mortgage is not a fixed rate, so if you want to pay it off quicker, you can do so without penalty.

Brendan
 
Hi Brendan. Many thanks for your reply. However according to my own calculations I still think it’s beneficial to keep the tracker, as I would save 30k in interest. Maybe I didn’t explain the situation properly.
I have an existing tracker mortgage, and we are selling and getting a new house. Scenario one is that we keep the existing tracker (€197,000 @ 3.9% (2.15 + 1.75% margin) for a remaining term of 16 years), and get an additional mortgage on a different rate (€245,000 for 23 years). Either use the standard variable or the AIB green at 3.2% for an example). Scenario two is that we give up the tracker, and get a mortgage for 442,000 on the rate we used for the additional mortgage in secanrio one. If we chose scenario one our monthly repayment would be about €400 extra, but we’d save 30k in interest compared to scenario 2. So am I right in saying that the monthly repayment for the 2 combined would be more than if you gave up the tracker, and therefore people think it’s more expensive so they give it up. However you would pay a significant amount less in overall interest if you kept the tracker. So it’s worth it to keep it if you can afford the higher monthly payment now, cause youl pay less interest over the lifetime of the loan.
 
forget looking at 23 years and look at the interest rate. Which is higher ?

The ECB rate is 2.15% at the moment. The margin will be 1.75%. So your mortgage rate on the tracker element will be 3.9%

The Green rate is 3.2%

So whatever calculation you are doing is wrong. 3.9% is higher than 3.2% so the interest charge will be higher if you keep your tracker.

Brendan
 
But the tracker portion would be 197,000 at 3.9% for 16 years, or if that portion was accumulated along with a new mortgage it would be 197,000 @ 3.2% for 23 years. So it’s less interest that would be paid, you’d save 30k.
 
You don’t transfer it, but you can pay it off and get a tracker rate for the same amount as the balance you has left on your tracker, and then an additional mortgage if you need more.
 
Very unlikely any lender will advance a loan secured on a property that is already mortgaged with another lender.
 
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