Transferring existing tracker mortgages to new properties

Peter Sweeney

Currently our government is considering how to get some movement in the housing market, why don't they implement the following,

Allow home owners to transfer their current mortgage (including trackers) to a new property with the following suggested conditions.

*The home owner is allowed to keep the existing terms of his mortgage (including trackers).
*If the property he is buying is valued more then the amount of his current mortgage then he will pay the current interest rate for that part of the mortgage only.
*If the property he is buying is valued less then the amount of his current mortgage then he will be allowed to keep his existing tracker rate for the new smaller mortgage.

There are I understand 100,000's of mortgage holders who or both in negative equity or on a tracker mortgage. This equates to a large part of the market who are in effect blocked from trading up or down from their existing family home.

This suggestion I believe would benefit the economy as a whole in providing home owners the option to move to different locations where jobs opportunities maybe available and also greater liquidity in the property market including increased sales of both white and brown goods, conveyancing work, increased stamp duty, etc.

The banks would naturally resist the idea of transferring existing tracker mortgages to new properties as they are focused on getting mortgage holders off these trackers. However it would benefit the banks balance sheets also as I would anticipate that a significant number of mortgage holders will purchase properties which will have smaller mortgage repayments which will lower the overall € amount that the banks are exposed to in tracker mortgages. (For the most part the banks are stuck with these tracker mortgages anyway). This will lead to less pressure on families and hopefully transferring spending on mortgage payments to spending in local shops.