C
Quick one, has anyone on a Tracker attempted to negotiate with their bank when moving to a new property? i.e. maintain their spread over ECB or even allow the bank to increase it within reason in return for paying down and taking out a mortgage on a new property.
I asked about this late last year.
Was told if I was to move house then your 1st mortgage is closed out, and a fresh one opened. In other words "no you can't keep your tracker which is costing us big time".
Yes, and it is also costing all variable mortgage holders too. So why should variable mortgage holders pay extra on top of their mortgages just because you want to hold onto your tracker and move house at the same time. If you 'negotiate' and it goes your way, then its variable mortgage holders that have to suffer.
Banks are not making a lose on tracker mortgages - this is just banking PR spin. They are making a loss on the speculation games they played with their mortgage accounts which is not the same thing.
At the time when the vast majority (if not all) tracker mortgages were given out, the funding was available to the bank for the entire term of the mortgage at a rate less than the borrower pays - if the banks had stayed put and not speculated, they would still be making a healthy profit out of their existing tracker mortgages.
For example. Say a customer was given a tracker at ECB +1% for 25 year mortgage. The bank purchased the money at ECB + 0.6% locked in for 25 years and was due to make a profit of 0.4% per annum with zero risks. However, after having done this, the banks decided that they'd like to make even bigger profits and started trading the these contracts for shorter, more profitable funding arrangements which ultimately tanked.
Has anyone heard of this been done before?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?