Tracker vs variable rate mortgage

B

BDP42

Guest
AIB are suggesting that I change over to a tracker mortgage from my current variable rate mortgage. My mortgage is now below a certain percentage of the house value and it looks like I could get a lower rate if I change.

Can someone explain the difference, together with pros and cons, between a tracker mortgage and standard variable rate mortage. I'm a bit suspicious of their reasons for suggesting a change; I find it hard to believe they are actually trying to save me money!!

Apologies if this question has been answered before; I've looked through some old posts but could not find exactly what I'm looking for.
 
Have a look at these links:
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In short a tracker is just a variable rate which guarantees the margin above the base ECB rate which the lender will charge which means that changes in the base rate will be passed on immediately. Variable rate mortgages don't offer any guarantees on margin charged or when rate changes will be passed on. Basically all other things being equal (in particular assuming a competitive rate in the first place) a tracker rate is simple more transparent (in terms of margin charged) than a variable rate.
 
BDP42,

I am an AIB customer as well and I'm currently changing from the standard variable to their lower tracker rate. Speaking to a member staff in AIB today. They are calling all their variable rate mortgage holders and advising them to switch to the new tracker rate.

No catch involved.
 
...

When I was offered the crappy 3.4% tracker from PTSB I noticed a clause on the back that said the bank had discretion to not use the ECB rate as the base rate for calculating the tracker...is that a normal term of them???
 
The obvious catch being you cannot get a tracker mortgage if your mortgage is below a certain amount or above a certain amount, e.g <250K or >750K.
 
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