Cancelled My Tracker Did I REALLY Screw up?

ronan45

About 4 years ago I cancelled my tracker and switched to a 5 year fixed, which is nearly over. I heard on the radio that trackers will be loss making for their full duration. Did i Just throw away about 85,000 Euro?
If the ECB go up to say 5% the tracker must go up to reflect that also. But in that case the other banks with the variables may be giving out 8% etc. Was that a HUGE screw up on my part?
Im gonna Puke lol :eek:

brianrcarney

you're not going to like the answer!!

ronan45

:eek:

Runs for the Toilet

glic71rods46t0

ronan45 wrote: »

About 4 years ago I cancelled my tracker and switched to a 5 year fixed, which is nearly over. I heard on the radio that trackers will be loss making for their full duration. Did i Just throw away about 85,000 Euro?
If the ECB go up to say 5% the tracker must go up to reflect that also. But in that case the other banks with the variables may be giving out 8% etc. Was that a HUGE screw up on my part?
Im gonna Puke lol :eek:

4 years ago a lot of fixed rate contracts had a tracker "go to" rate specified for the end of the fixed period. It maybe that you are lucky and have such a clause in your loan contract. What lender do you have your mortgage with?

ronan45

Ulster bank. It was when the rates were creeping up over a few months, I spoke with the bank and I said sure best to fix it as if the interest rates sky rocket I wont be able to pay... that was my thinking.
My thinking was if these rates keep going up I am SCREWED, thats how it looked to me so i said right well I will fix

Sand Wedge

First off, Tracker Mortgages will not be loss making for banks for the full term of the mortgage. They are loss making now because banks are borrowing at 5% and most trackers on ECB +1% which currently is 2% in total. Once ECB rate goes up to, which it is inevitable that it will. Likely to go up 1% this year alone then the gap between the trackers and the bank borrowing rate will reduce. Over the full term of the tracker mortgage the Banks will make make money but this is because the mortgages are over 25-35 years in term.

Secondly, what rate of a fixed mortgage have you currently got and what are you going to be offered when your fixed term is up?

brianrcarney

http://www.finfacts.ie/irishfinancenews/article_1021904.shtml

ronan45

Sand Wedge wrote: »

First off, Tracker Mortgages will not be loss making for banks for the full term of the mortgage. They are loss making now because banks are borrowing at 5% and most trackers on ECB +1% which currently is 2% in total. Once ECB rate goes up to, which it is inevitable that it will. Likely to go up 1% this year alone then the gap between the trackers and the bank borrowing rate will reduce. Over the full term of the tracker mortgage the Banks will make make money but this is because the mortgages are over 25-35 years in term.

Secondly, what rate of a fixed mortgage have you currently got and what are you going to be offered when your fixed term is up?

Sandwedge: The 5 year fixed Im on ends 31 August 2012 and is currently set at 4.95%

From their current figures on website they will offer me 5.70% IF i want to fix again for 5 years next august.


Fixed Rate until 30 April 2014 5.70% fixed (4.90% APR)

http://www.ulsterbank.ie/roi/personal/borrowing/mortgages/fixed-rate/rates.ashx

Ivan Yates said this morning on Newstalk that trackers will be loss making for their full life cycle. It did seem to me to be a bit of a strange statment.

halkar

ronan45 wrote: »

...
Ivan Yates said this morning on Newstalk that trackers will be loss making for their full life cycle. It did seem to me to be a bit of a strange statment.

I think that statement is BS to be honest. You are going to get a rate fixed for almost 6 % for 5 years. In order for tracker to go above this rate, ECB rates should go up over 4% to 5% in the next 5 years. Even if it does reach to this amount on year 5 your next renewal for fix mortgage will be higher than trackers.

As the euro area are in flames with Portugal coming in and possibly default of Greece (even with the help they already had) and possibly Spain joining to club of bankrupt countries, I do not think ECB will raise any more than 1% - 2% next 5 years. There are other factors such as what US does with their rates, markets etc etc.

Unfortunately it was a huge screw up on your side to change from tracker to fixed rates 5 years ago (sorry). Amount you would have saved staying in tracker last 5 years and next 5 years and beyond would be very large (depend on your mortgage amount).

Tracker mortgages were like gamble at the time and everyone on it won and they will continue winning imao. It was a bit like fixed rate mortgages as you are at the ECBs mercy rather than your local banks (we all know what happened to them.)

seamus

All is not lost, you did hold onto all of your documentation right?

There's usually an underlying base rate which is frozen when you go onto a fixed rate. When the fixed term ends, the bank give you an option on what to do, and this base rate must be offered to you as an option.

If you started your fixed term in 2007, then it's likely that your bank were still offering tracker rates, and your original tracker rate is still your base rate.

My two-year fixed term ended in January 2010 and my lender offered me my base tracker at that stage, despite having removed trackers more than a year beforehand.

If I was to move onto a fix rate now, more than likely I would be required to move my base rate to a variable at the same time, but since you fixed in 2007 OP, your base rate may still be the tracker rate. It should all be in the fine print.

Zulu

Interesting...
I took out a fixed rate 4 years ago with Ulster Bank (then First Active). It's up next year. How would I find out if a tracker option is open to me?

ronan45

seamus wrote: »

All is not lost, you did hold onto all of your documentation right?

There's usually an underlying base rate which is frozen when you go onto a fixed rate. When the fixed term ends, the bank give you an option on what to do, and this base rate must be offered to you as an option.

If you started your fixed term in 2007, then it's likely that your bank were still offering tracker rates, and your original tracker rate is still your base rate.

My two-year fixed term ended in January 2010 and my lender offered me my base tracker at that stage, despite having removed trackers more than a year beforehand.

If I was to move onto a fix rate now, more than likely I would be required to move my base rate to a variable at the same time, but since you fixed in 2007 OP, your base rate may still be the tracker rate. It should all be in the fine print.

Umm Documentation... I SHOULD have it somewhere allright. Can i ask for copies of it from the bank or would they be at pains to hand it over?

Zulu

I could just hug this thread!!!
I rang the bank, next year I move onto a tracker!!!!

I love you guys.

ronan45

Zulu wrote: »

I could just hug this thread!!!
I rang the bank, next year I move onto a tracker!!!!

I love you guys.

Wow cool Zulu! Where you on a tracker and moved to a fixed term like i did?

Zulu

No, I went straight to a fixed, as the advise (am my best guess) was that intrest rates had to rise.

Well that bit me in the arse.

ronan45

Just rang the bank. he said "oh you came from a tracker to fixed then you will go straight to the variable"
I said but i heard something about if you came from a tracker to a fixed there might be a way to go back onto the tracker
He said "oh yes maybe in a small number of cases you would need to read the small print on your documentation.
I reckon it will be too good to be true but ill check anyway this evening.
If i dont have the documentation the bank can send it to me in any event, I just hope they dont get out the tipp ex to it :eek:

ronan45

seamus wrote: »

All is not lost, you did hold onto all of your documentation right?

There's usually an underlying base rate which is frozen when you go onto a fixed rate. When the fixed term ends, the bank give you an option on what to do, and this base rate must be offered to you as an option.

If you started your fixed term in 2007, then it's likely that your bank were still offering tracker rates, and your original tracker rate is still your base rate.

My two-year fixed term ended in January 2010 and my lender offered me my base tracker at that stage, despite having removed trackers more than a year beforehand.

If I was to move onto a fix rate now, more than likely I would be required to move my base rate to a variable at the same time, but since you fixed in 2007 OP, your base rate may still be the tracker rate. It should all be in the fine print.

Thanks Seamus
I have requested the Offer of Advance originally sent to me i cant find it. I have another page i signed that says

AT THE END OF THE FIXED PERIOD: Ulster bank may offer to continue the advance for such a period and at such a fixed rate as it may decide. It may also offer alternative products. If no such offer is made or if an offer made and no acceptance received then from the following day the ulster bank Home Loan Rate shall apply in accordance with General Condition 2 of the offer of advance originally accepted by you, being the banks general conditions relating to advances by UB which varies the interest rate and the said General Conditions relating shall be construed accordingly.

Seamus should i be asking the bank what if any is my underlying base rate?
Should have the copy of Offer of Advance of 5 year fixed over next few days ,

seamus

You can ask the bank what your base rate is, but I don't know if they'll tell you. It might not even be called "base rate". Best to wait until you have the docs in your hands, it might be on there.

ronan45

seamus wrote: »

You can ask the bank what your base rate is, but I don't know if they'll tell you. It might not even be called "base rate". Best to wait until you have the docs in your hands, it might be on there.

Thanks Seamus and for all the replies, good stuff out of Zulu too Ill get back to yas when i have the papers in hand :cool:

Zulu

I did nothing - just got lucky out of your thread.

Seamus - if our paths ever cross in the real world, I owe you a pint.

seamus

I did nothing

gina36

Hi Ronan45,

Can you let me know if Ulster bank ever gave you back your tracker rate?
I have the same wording that you had on the agreement to fix and am coming off it in September and hoping that maybe it will revert to the tracker

lucybousy

i have the exact same wording in my fixed rate form as ronan45. it doesnt mention anything about tracker. in my offer of advance when i took out mortgage in june 2005 the special conditions relating to loan states: The rate of the Ulster Bank Flexible Mortgage Tracks the ECB rate with a margin which is fixed for the life of the home loan term. THE MARGIN OF THIS HOME LOAN IS ECB RATE PLUS O.85%. this margin is dependent on the amount borrowed and the value of the property to be mortgaged. does this mean i have to go on a tracker. please advise

earlyevening

lucybousy wrote: »

it doesnt mention anything about tracker.


in my offer of advance when i took out mortgage in june 2005 the special conditions relating to loan states: The rate of the Ulster Bank Flexible Mortgage Tracks the ECB rate with a margin which is fixed for the life of the home loan term. THE MARGIN OF THIS HOME LOAN IS ECB RATE PLUS O.85%. this margin is dependent on the amount borrowed and the value of the property to be mortgaged. does this mean i have to go on a tracker. please advise

It does mention it??

lucybousy

so do u think i have to go back on tracker. it does not mention anything on the fixed rate form. i just found my letter of offer today after months looking for it and trying get my head round it. i think ive go back on tracker but dont want get my hopes up and last year an ulster bank employee told me id be going on a variable. this is what it states on the fixed rate form

AT THE END OF THE FIXED PERIOD: Ulster bank ireland limited may offer to continue the advance for such a period and at such a fixed rate it may decide. It may also offer alternative available products. If such offer is made and you elect to accept then you must do so in writing, your acceptance to be signed by all parties to the mortgage and to be received by ulster bank ireland limited of no such offer is made or if an offer is made and no acceptance received as prescribed above, then, from the day following the expiry of any option selected above, the ulster bank home loan rate shall apply in accordance with General condition 2 of the offer of advance originally accepted by you being the banks general conditions relating to advances by ulster bank ireland limited house mortgages section which varies the interest rate and the said general relating to the advances shall be construed accordingly.

ronan45

lucybousy wrote: »

so do u think i have to go back on tracker. it does not mention anything on the fixed rate form. i just found my letter of offer today after months looking for it and trying get my head round it. i think ive go back on tracker but dont want get my hopes up and last year an ulster bank employee told me id be going on a variable. this is what it states on the fixed rate form

Hi Lucy. Just so i follow you correctly, So you like me had a tracker and ask to be switched to a fixed rate yes?. Well I did ring Ulster and a Lady told me that i had to go back to the variable, She was quite abrupt about it. It may be possible to switch back hopefully. Lets hope for the best eh! When does your fixed end?

ronan45

So Lucy Gina and Ronan45 we have all asked Ulster bank while on a tracker to swap to a fixed rate, So lets work together and keep each other up to date on how we get on.
We live in hope !

lucybousy

talked with financial advisor and he thinks i have to be put back on tracker. rang my solicitor and hes going have a look at it tommorrow so fingers crossed. il report back with an update

lucybousy

ok spoke with solicitor today and he doesnt think i have to be put on tracker but couldnt see where i shouldnt be either. need help guys heres all the information word for word


We got our mortgage in June 2005 and were given a tracker mortgage. ECB plus 0.85%. We then fixed in October 2006 for five years at 4.99% fixed rate until 30/11/2011. I would like if people could help me to see if we could get our tracker mortgage back by the conditions stated underneath. Below is exact wording on fixed rate letter and general condition 2 of the offer of advance originally accepted by us word for word. I also included a paragraph which related to our tracker under the heading Special Conditions.

AT THE END OF THE FIXED PERIOD: Ulster Bank Ireland Limited may offer to continue the advance for such a period and at such a fixed rate as it may decide. It may also offer alternative available products. If such offer is made and you elect to accept then you must do so in writing, your acceptance to be signed by all parties to the mortgage and to be received by Ulster Bank Ireland Limited. If of no such offer is made or if an offer is made and no acceptance received as prescribed above, then, from the day following the expiry of any option selected above, the Ulster Bank Home Loan Rate shall apply in accordance with General condition 2 of the Offer of Advance originally accepted by you being the Bank's General Conditions Relating to Advances by Ulster Bank Ireland Limited House Mortgages Section, which varies the Interest Rate, and the said General Conditions relating to the Advances shall be construed accordingly.

General condition 2 of the Offer of Advance is as follows:

Interest is calculated on the balance outstanding on the home loan at the close of business each day from the date of release of the advance monies until the home load is repaid. Interest so calculated is charged on the last day of the calender month in which release of funds takes place and on the last day of each calender month thereafter until the home loan is repaid. Interest charged to the home loan is included in the outstanding balance on which interest is calculated. The outstanding balance on which interest is calculated will include any overdue repayments and other sums outstanding. Overdue repayments and other sums outstanding will be included in the outstanding balance from the date on which they are debited to the home loan account until the date on which they are discharged. If redemption of the home loan takes place mid month the amount required to redeem the loan will include interest from the first day of the month in which redemption takes place to the date of redemtion. The monthly repayments will vary if changes in the Home Loan Interest Rate occur. Variation in Ulster Bank Home Loan Rate may occur at any time and notice of each variation will be published at least once in a national daily newspaper. Interest is calculated on a compound basis.

Drawdown date of your mortgage will be the date on which the advance monies are issued. If drawdown date is before the date on which direct debits are raised in any given month the first repayment will be on the 1st of the month following the month in which drawdown takes place and will be interest only on the amount drawndown from the date of drawdown until month end. This repayment will be in addition to the number of repayment instalments shown on the schedule of inmportant information. If drawdown date is after the date on which direct debits are raised in any given month interest will be charged on the last day of the month on the amount drawn down from date of drawdown until month end. This interest will be added to your first normal repayment on the 1st of the month following the month which follows the month in which drawdown takes place. In this case the total number of repayments will be as shown under the number of repayment instalments in the schedule of important information.

APR calculation assumes that drawdown of the loan will take place on the 15th of the month following the month in which the Offer of Advance issues.


The Special Conditions Relating To Loan xxxxxxxx:

The rate of the Ulster Bank Flexible Mortgage Tracks the ECB rate with a margin which is fixed for the life of the home loan term. THE MARGIN OF THIS HOME LOAN IS ECB RATE PLUS O.85%. This margin is dependent on the amount borrowed and the value of the property to be mortgaged.

panevthe3rd

I was in the same boat with First Active/Ulster Bank. My fixed ended last September and they sent out a form with all my available options. Just had to tick the box and send it back. I saw a tracker option and kinda ignored it at first coz I thought it was a mistake. Rang them and they said it was right so I took it with both hands.

Ye might just be best to wait and see if they offer it to you before ye go ringing solicitors and all. They will offer it if its part of your mortage agreement so just hang tough till ye get your renewal forms and see what it says.

It is a great feeling though when you get it. Knocked nearly 300 off of my monthly payments.

lucybousy

thanks for replying. it will make nearly 400 of a difference to us. i know to hang on for awile but would just love to have the piece of mind that we will get it. did your fixed letter have the same condition that i stated would love to know. thanks