gnf_ireland
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My original mortgage offer from 2010 (was a house purchase + renovations so level of phased payment) clearly states the offer was valid for 4 months only. Granted this was a different bank, but only 12 months after the OP mortgage discussionI don't think banks contact customers when loan offers are about to expire, I never recall doing that, feel that's up to customer and solicitor to get their act together to draw down in time.
I think this statement may be poorly phased to be honest. You had more comfort in the fact the rate was being tracked against something external. The ECB rate was likely to have no bearing on Ireland and would be driven by the economic powerhouses of France/Germany. However, around this time the ECB rate was rising and it peaked at 5.25% for a period. Add 1.2% onto this, and you would have a rate of 6.45% on an ECB tracker. There is no way that anyway, even the bravest economists, could have predicted that the ECB would engage in such a long and persistent QE programme in 2009 and leave ECB as close to 0 as possible for an extended period. These are extraordinary times, and this is what has made the tracker product so valuable - but that is only with the benefit of hindsight.You say, as someone who worked in a bank, that no one knew how good a Tracker was. I did, as I am sure many others did too.
Tracker mortgage s however were different in that the ECB underpins all loans, at least that is what I understood. I know banks change rates regularly but on principal, I reconed they were good value. Fixeds were always a gamble I thought as you never can tell what is going to happen.
Low Tracker is good where the ECB interests are aligned to the local interests. If Irish interests differed greatly from European ones - say for example if inflation was rising quickly in Germany and they needed to rise the ECB rate while the Irish economy was still on its knees, the tracker is not as solid a product.The Tracker I always thought was honest and fair, and a low rate Tracker was as good as it gets.
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