On a Tracker ECB +1.68% should I change to variable (4.5%)

dinneenp

Hi,
I'm with TSB, on a tracker. The rate is ECB + 1.68% which is quiet high- currently 4.93%
BOI are offering a variable rate of 4.5%.

I know variable rates don't have to pass on any decrease but I'm imagine they will (Gov/public pressure etc).

Should I switch to the variable? I'd get €1000 towards legal fees and valuation fee back?

Thanks,
Pa

ZYX

Probably no. Are you sure BoI's offer is APR? I cannot find 4.5% on their website for switchers. The lowest seems to be 4.6%. for a LTV < 50% Even at 4.5% that represents a saving of €430 per €100,000 borrowed compared to paying tracker. However rates will go down more. Tracker means rate will be passed. Variable may not be passed in full. Banks do not like trackers anymore so it is in their interest to wean as many people as possible away from trackers. Look out for some very good offers in next 12 months to get people away from trackers. Then after a while the rates will shoot up. Stick with your tracker.

inigo

I read somewhere the ECB rate may go down again next month...

The_Conductor

In the current climate I'd be more inclined to go back to the primary lender and try to negotiate a better margin with them- ECB + 1.68 is a massive spread.

Carawaystick

if you can get an offer letter at the low rate 4.5% and it's lower than your current rate, bring the new offer letter to your current mortgage holder and ask for the best deal they will give.
If they wont budge , then try get set up with the new company. and eventually sho you have a ew pesion co. system ready to go in case htey drop you.

Ste.phen

I imagine It's a lot easier to plan with the tracker than with a 'ah, we'll increase it whenever' variable.
Public/Government pressure won't stop them putting up the rate, or holding back some of the ECB decreases, they're out to make money afterall.

blast05

I can't recall too many times when any of the major banks did not pass on in full or at least in large part any rate decrease. Correct me if i am wrong.

Re the tracker, i certainly would not budge until such time as there is 100% certainty that equity funds will not invest into the 6 main banks (presuming PTSB is one of the 6? i can't recall).... i just can't see a bank that is partly or largely controlled by these groups passing on all rate cuts. More like that they will simply deciding to increase rates at a random time when ECB haven't touched them or increase them by more than the ECB when it does.

I also saw this question in the business section of a Sunday newspaper recently with same rate from PTSB (Tribune i think) .... advice was to stay on the tracker as will almost certinaly benefit over the lifetime of the mortgage

The_Conductor

There is however no harm in trying to get the tracker spread lowered- 1.68% is a ridiculous spread........

Frowzy

smccarrick wrote: »

There is however no harm in trying to get the tracker spread lowered- 1.68% is a ridiculous spread........

Agreed, that's a huge margin!!!! Mine is .8% and I'm looking for more off at the moment, has to be worth a phone call!!!