marathonic
Registered User
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A lot of people are talking these days about early repayment of trackers and potential discounts offered by banks.
Obviously, all banks are keeping a close eye on this.
With the interest rates on trackers so low, the majority of monthly payments made by the holders of these mortgages pay down the capital as opposed to interest.
In the case of NIB, they have a lot of trackers at 0.5% above base rate, or 1.25%.
If the average tracker term remaining is 20 years, this would imply that the capital outstanding on trackers is reducing by almost 4.5% per year.
Add to this the people upsizing, downsizing and relocating due to children, retirement and job opportunities elsewhere in Ireland and abroad, and you'll get a higher figure.
Add to this the people who pass away and, in general, these would tend to be the people who have the higher valued homes (older and built up enough equity in previous homes to enable them to secure the 60% LTV required in the first place). When their estates are settled, so are the trackers.
I have no idea what percentage of the tracker value outstanding would be paid back through these categories but wouldn't be surprized if it significantly exceeded the balance being reduced through normal repayments.
The banks, obviously, have access to these figures and may have a plan in place to venture into the offering of discounts for early payment when it makes economic sense for them.
If it made as much sense for them as a lot of people are implying today, they'd have already all came out with such offers. Would you agree?
Obviously, all banks are keeping a close eye on this.
With the interest rates on trackers so low, the majority of monthly payments made by the holders of these mortgages pay down the capital as opposed to interest.
In the case of NIB, they have a lot of trackers at 0.5% above base rate, or 1.25%.
If the average tracker term remaining is 20 years, this would imply that the capital outstanding on trackers is reducing by almost 4.5% per year.
Add to this the people upsizing, downsizing and relocating due to children, retirement and job opportunities elsewhere in Ireland and abroad, and you'll get a higher figure.
Add to this the people who pass away and, in general, these would tend to be the people who have the higher valued homes (older and built up enough equity in previous homes to enable them to secure the 60% LTV required in the first place). When their estates are settled, so are the trackers.
I have no idea what percentage of the tracker value outstanding would be paid back through these categories but wouldn't be surprized if it significantly exceeded the balance being reduced through normal repayments.
The banks, obviously, have access to these figures and may have a plan in place to venture into the offering of discounts for early payment when it makes economic sense for them.
If it made as much sense for them as a lot of people are implying today, they'd have already all came out with such offers. Would you agree?