RichInSpirit
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I was just wondering if Variable rate loans and Mortgages track ECB rate hikes the exact same as tracker mortgages?
Or do they follow some other path?
Or do they follow some other path?
Possible, but unlikely in my opinion based on past experience. Often standard variable rates do track changes to ECB rates but a rate increase can be greater than the ECB rate change. Conversely, when ECB rates are falling the SVR rate decrease can be less than the ECB rate decrease, and sometimes delayed for several months. The terms and conditions of most, if not all, SVR loan agreements give the lender carte blanche to change the rate whenever and however they decide.Thanks for that Clubman.
So tracker mortgage rates could climb above variable rate mortgages in a series of rate rises.
Are you comparing a tracker mortgage with a variable non-mortgage unsecured loan?It was only something I was thinking about earlier.
I still have a tracker @1.15% over the ECB.
But in the past I had a variable rate bank loan of about 6% and 7% after being restructured.
A low margin tracker is practically free money when inflation is taken into account. I wouldn't be rushing to pay off such a loan unless there were other factors clearly making that the better course of action.I would focus instead in repaying the loan early on which there would be no penalty for you.
Hi Richie
That is an ok tracker, but not a great tracker. If you want to post a reply in this thread, I will give you my 2 cents worth.
Key Post - Should borrowers with trackers consider fixing? (General guidelines)
It seems increasingly likely that we are going to see a series of rate hikes by the ECB in the near future. According to Philip Lane, ECB chief economist - "I think it’s clear that at some point we’re going to be moving rates, not just once, but over time, in a sequence." If the ECB raise the...www.askaboutmoney.com
Small correction - it's the Central Credit Register these days and no longer the Irish Credit Bureau that furnishes credit reports:You probably should check your ICB record anyway.