Lack of Zero Floor on Tracker Mortgages About to be Tested

AnyAdvice said:
I'm trying to calculate how much BOI are losing on my tracker mortgage (ECB + 1.1%).
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If you pay off your mortgage, BoI will then put the proceeds on deposit with the ECB at ECB rate. So they will not be encouraging you to do this.

ptsb gave a 10% bonus to people who paid down their mortgages at a time when they were reliant on ECB funding to keep going. It is the very opposite now.

If you repay a tracker at ECB + 1.1% and your bank can lend it on at 4.5%, they would be delighted to see you repaying your tracker. But that is not the position they are in.

Brendan
 
For about 8-12 months at the height of the banking crisis around 2010/2011 banks here were considered risky and they had to pay a premium to borrow from the market.

The media gloated about this in hysterical headlines for several months.

Ecb then threw billions at the financial markets and banks including Irish banks lapped it up and borrowing rates tumbled.

As news that banks were no longer losing money on trackers does not make a hysterical headline, it was left with people thinking that banks continued to lose on trackers.

It's estimated that servicing a good mortgage costs a bank less than 0.5%, so with the exception of about 12 months they have and will continue to make a small profit on your mortgage.
 
Brendan Burgess said:
ptsb gave a 10% bonus to people who paid down their mortgages at a time when they were reliant on ECB funding to keep going. It is the very opposite now.

Brendan
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Ah, so there's pretty much zero chance they'll better (or repeat) that offer. Pity! I'd quite enjoy extracting a bonus from them now.
 
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