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mortgage question

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  • 11-06-2010 2:32pm
    #1
    lubo_moravcik
    Registered Users Posts: 1,623 ✭✭✭


    i'm coming to the end of a 3year fixed term. called the bank there and they told me i will be rolling onto some tracker at 1.25% above the ECB, which i think means my new rate will be 2.25%. this is a relief as i have been on a fairly higher rate for the 3 years.

    the mortgage is over 35 years which i'd like to reduce the term by 10 or 15 years. can i do this?? if i want to reduce it by these amount of years, does it mean that i will no longer have the tracker and have to sign up for another fixed term and higher rate??

    i hope this makes sense as it does to me in my head, but i'm writing it arseways.


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    #2
    themoneyguy
    Registered Users Posts: 75 ✭✭themoneyguy


    Hi,

    Firstly if your bank is offering you a rate that tracks the ECB (tracker rate) I would grab it with both hands.....depending on the margin of course. You mentioned 2.25% which is a very competitive rate ate the moment.

    Once on a tracker/variable rate you can make amendments to the term of your loan without any penalties. Dont bank persuade you to drop this rate due to reducing your loan term......


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    #3
    stepbar
    Closed Accounts Posts: 6,123 ✭✭✭stepbar


    lubo_moravcik wrote: »
    i'm coming to the end of a 3year fixed term. called the bank there and they told me i will be rolling onto some tracker at 1.25% above the ECB, which i think means my new rate will be 2.25%. this is a relief as i have been on a fairly higher rate for the 3 years.

    the mortgage is over 35 years which i'd like to reduce the term by 10 or 15 years. can i do this?? if i want to reduce it by these amount of years, does it mean that i will no longer have the tracker and have to sign up for another fixed term and higher rate??

    i hope this makes sense as it does to me in my head, but i'm writing it arseways.

    This is a tricky one. Some deposit interest rates are round the 3% mark depending on the bank you do go to etc. DIRT on deposits is 25% (or 28% if interest is paid less than yearly).

    You would honestly need to compare like with like i.e compare the net interest gained from savings VS a ratio of the interest paid on your mortgage compared to your gains from savings interest. Also you have to take into account the TRS benefit on your mortgage. I would recommend you try and get maximum tax benefit from this as you will not get it after year 7. After yr 7 you could make a lumpsum reduction on your mortgage


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    #4
    lubo_moravcik
    Registered Users Posts: 1,623 ✭✭✭lubo_moravcik


    themoneyguy wrote: »
    Hi,

    Firstly if your bank is offering you a rate that tracks the ECB (tracker rate) I would grab it with both hands.....depending on the margin of course. You mentioned 2.25% which is a very competitive rate ate the moment.

    Once on a tracker/variable rate you can make amendments to the term of your loan without any penalties. Dont bank persuade you to drop this rate due to reducing your loan term......
    nice one moneyguy, thank you
    stepbar wrote: »
    This is a tricky one. Some deposit interest rates are round the 3% mark depending on the bank you do go to etc. DIRT on deposits is 25% (or 28% if interest is paid less than yearly).

    You would honestly need to compare like with like i.e compare the net interest gained from savings VS a ratio of the interest paid on your mortgage compared to your gains from savings interest. Also you have to take into account the TRS benefit on your mortgage. I would recommend you try and get maximum tax benefit from this as you will not get it after year 7. After yr 7 you could make a lumpsum reduction on your mortgage
    some of this has confused me as i wouldn't be too clued up on my money at all. i see it coming in and then going out and wonder where it all went.
    • what is a deposit interest rate and where does this come in to what i was saying???
    • what is DIRT and the 25 and 28%'s
    • comparing like with like part lost me
    • i think there might only be 2year left on the TRS, what is this 'maximum tax benefit' and how would i go about getting it???
    the lumpsum reduction to the mortgage is something i had in mind. with the 'savings' i hope to make, i will look to either get the term of the mortgage reduced and put the extra to that, or countinue paying extra into the account and when a few grand has built up then put that to the overall sum of the mortgage.


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