ECB rate increase

Trampas

More than likely ECB is going up today.

Will this increase go against the original drawn mortgage amount or what is outstanding?

Say back when the ECB rate was 1.25% and I was paying €1,000 a month at that rate. Will it going back to that or would I be paying say €995 as I since reduced the principle by a few grand within that time?

pjmn

Can you tell us ...

a) amount of outstanding mortgage...

b) term in months left on mortgage...

c) your rate details i.e are you on a tracker and if so at what margin or are you on a standard variable rate (if you are on a fixed rate today's announcement shouldn't impact on you)...

If you have the above info we can tell you what your new repayment will be...

Trampas

outstanding is around 265k

26.5 years

Tracker +.75%

pjmn

Thanks,

Based on those figures I calculate you should be paying c. E1,042 per month now.

If ECB goes up today by say .25% - your rate increases to 2%.

Therefore your repayment will go up to E1,074 (increase E32 per month).

P.S. That's a good Tracker deal - hold on to it....

bamboozle

pjmn wrote: »

Thanks,

Based on those figures I calculate you should be paying c. E1,042 per month now.

If ECB goes up today by say .25% - your rate increases to 2%.

Therefore your repayment will go up to E1,074 (increase E32 per month).

P.S. That's a good Tracker deal - hold on to it....

sorry if this is a silly question, but if the rate goes up by 0.25% does this not translate into 250 extra interest per 100,000, 250/12=20.83 per month but your calculations are for an increase of about 12/13 quid a month

guy on newstalk this morning also saying a 0.25% increase means an extra 13 quid a month per 100k, am confused??

pjmn

Not a silly question at all.... (but difficult to explain in words)...

My calculations are based on the fact that the OP appears to be paying down his/her debt over the remaining 26.5 years of the loan.

Let's assume for the moment that there are no more rate changes for the remaining 26.5 years (unlikely I know, but let's assume it for the moment)...

Then the repayment calculation I've shown is including both an interest and capital element in the repayment amount, however over the 26.5 years the capital amount owing on the loan will fall each year (and in turn the interest charge each year will also fall (having made the assumption that the interest rate will remain the same for the 26.5 years). Hence why your calculation suggests the increase is only c. E12/13 per month per E'000. {Think of it as averaging over the life of the loan}. In effect the repayment level caters for the falling capital amount owing over the life of the loan.

If however the OP was currently paying interest only the repayment would increase by E20.84 per month per E100,000 (based on their current Tracker deal), however the capital element wouldn't be reducing in this scenario.

Hope that helps - must say I'm finding it hard to express it clearly in words...

Trampas

pjmn wrote: »

Thanks,

Based on those figures I calculate you should be paying c. E1,042 per month now.

If ECB goes up today by say .25% - your rate increases to 2%.

Therefore your repayment will go up to E1,074 (increase E32 per month).

P.S. That's a good Tracker deal - hold on to it....

Don't worry I will. Initial offer was .9 or .95 +ECB but by the time I drew down they dropped it to .75

mailforkev

And it's official. Up by 0.25%.

http://www.irishtimes.com/newspaper/breaking/2011/0407/breaking6.html

DMBandit

I'm currently in the process of getting a mortgage from Bank of Ireland. As a first time buyer, was being offered 3.4% for the first two years, and now they are saying that unless everything is sorted by thursday, it will be up to 4.95% for the first 2 years! The rush is on.

Does anyone know what that would roughly mean for my interest rate after the first two years?

Adrift

Anyone hazard a guess as to what the main rate will be by the end of the year? Obviously this is a real worry for a lot of people who were approved for mortgages based on 2 incomes that are now down to /reduced/one or if very unfortunate no incomes.

Keith C

i'll guess 2 more .25 increases before year end. Infation is still running over 2%