Tracker mortgages to avoid consequences of banking 'crisis'?

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Waves

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I heard on the news this morning that the banks may have to raise mortgage interest rates as a result of the banking 'crisis'. I assume this can only happen on variable rate mortgages and not on trackers as they are linked to the ECB rate?

Have a tracker with NIB so would appreciate reassurance on this issue......
 
I haven't seen a National Irish Bank loan offer as they don't deal with brokers. However, I assume that like any other tracker mortgage loan offers, NIB's guarantees the margin over ECB for the life of the loan. If so, as an existing customer, there will be no upward changes to your repayments until the next ECB rate move.

The present money market issues might cause some lenders to withdraw some of their tracker mortgage offers for new customers if it continues, as it would render them unprofitable.
 
Hi have just noticed on ebs they have lowered there trace on one option from 0.85 + ecb to 0.80 +ecb
 
They could also increase the spread on a tracker for new mortgages. Bound to happen I think.
 
Listening to a discussion last night on the radio, if the banks increase their margins it will only affect standard variable and new trackers, the existing trackers will have to stay at the same margin rate as that was what people signed up for
 
Stupid question - will fixed rate mortgages be affected? I assume not, since they're priced over a longer period.
 
Tracker is a safe bet for a bank - they get a margin above ECB no matter what happens to interest rates, so margin above will not change for existing mortgage holders.
 
OneLife said:
Fixed rates on offer should come down because of the current market conditions
Click to expand...

Fixed rates should go up I would have thought?

Eanair, if you have an existing one it can't be changed by the bank during the fixed period of the contract.
 
Thanks - I have a new mortgage and haven't drawn down yet so am watching anxiously to see if the rates are affected as I understand that it's the rate at drawdown that I'll be stuck with for the next 5 years. Hoping for down rather than up in that case.
 
csirl said:
Tracker is a safe bet for a bank - they get a margin above ECB no matter what happens to interest rates, so margin above will not change for existing mortgage holders.
Click to expand...

The banks fund their loans from the Interbank market, and the 3month Euribor is currently at 4.75%.

The cost of funds for the Lender is not the ECB rate....

Also on my (possibly mistaken) recollection of the various lenders Loan offers - they all have a get out clause with regard to Trackers etc.
PTSB's is one of the better ones -

IF, ​
FOR WHATEVER REASON, AN EVENT OCCURS WHICH FUNDAMENTALLY
AFFECTS THE USE OF THE ECB RATE AS A REFERENCE RATE FOR LOAN PERMANENT TSB, IN l'TS SOLE DISCRETION, SHALL BE ENTlTLED TO USE SUCH OTHER REFERENCE RATE OR OTHER METHOD OR BASIS OF CALCULATION AS IT DEEMS FAIR AND RESONABLE AND NOT WITHSTANDING THE USE OF SUCH OTHER REFERENCE RATE OR METHOD OR BASIS OF CALCULATION.

​

 
OneLife said:
The banks fund their loans from the Interbank market, and the 3month Euribor is currently at 4.75%.

The cost of funds for the Lender is not the ECB rate....

Also on my (possibly mistaken) recollection of the various lenders Loan offers - they all have a get out clause with regard to Trackers etc.
PTSB's is one of the better ones -
Click to expand...

Banks might fund their loans from the interbank market, but tracker mortgage holders rates are set off the ECB rate.
The get out clause would be in the event of a major event such as Ireland pulling out of the Euro and setting it's own interest rates, not just because the banks aren't making as much money off their lending margins.
 
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