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Banks losses on standard tracker mortgage

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  • 21-03-2013 8:12pm
    #1
    Benny Cake
    Registered Users Posts: 3,144 ✭✭✭


    Perhaps someone here can help with this query. I'm meeting my bank next week to discuss future options with regard to my mortgage & specifically the possibility of a "new" mortgage if I was to move house.

    My question is what does a bank lose by having me on a tracker mortagage of 1.25% above the ecb rate? The original value of the mortgage was 250k.

    I'd like to have a figure in mind as I know they are mad keen to get people off trackers and if I know what it's worth to them I can use it to my advantage....


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    #2
    roro2
    Registered Users Posts: 412 ✭✭roro2


    It's not easy to just get a figure, or to say if the bank lends to you at x% it breaks-even and anything below this is a loss. It will depend on the bank's funding mix and the cost of each funding component. The bank's average price it pays on deposits will be a major factor as this is a key funding source, but it will also depend on its other funding. BOI issued a new €500m bond last week at a rate of 2.83% for example. And the bank will also need to be making a margin above its cost of funding to meet its operating costs.

    But whoever you meet in the bank is not going to have a figure either, and it's highly unlikely you'll be offered anything other than a standard variable rate on a new mortgage. It's worth bringing it up though, as it would make financial sense for the bank to offer you some sort of inducement to give up the tracker - it's just not happening at the moment!


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    #3
    killers1
    Registered Users Posts: 1,443 ✭✭✭killers1


    Benny Cake wrote: »
    Perhaps someone here can help with this query. I'm meeting my bank next week to discuss future options with regard to my mortgage & specifically the possibility of a "new" mortgage if I was to move house.

    My question is what does a bank lose by having me on a tracker mortagage of 1.25% above the ecb rate? The original value of the mortgage was 250k.

    I'd like to have a figure in mind as I know they are mad keen to get people off trackers and if I know what it's worth to them I can use it to my advantage....

    What bank is your current mortgage with?


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    #4
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,711 Mod ✭✭✭✭Henry Ford III


    I'm not sure it matters tbh.

    If you want a new mortgage on a new property it'll be a new non tracker mortgage.


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    #5
    killers1
    Registered Users Posts: 1,443 ✭✭✭killers1


    Ulster Bank will allow you to bring a tracker to a new property...


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    #6
    Benny Cake
    Registered Users Posts: 3,144 ✭✭✭Benny Cake


    Henry Ford III wrote: »
    I'm not sure it matters tbh.

    If you want a new mortgage on a new property it'll be a new non tracker mortgage.

    I'm with Permanant TSB and tbh I don't expect them to transfer the tracker to the new property. I would, however, be pushing for a favourable rate or some incentive for coming off a tracker, on which they're losing their ar$es....


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    #7
    noodler
    Registered Users Posts: 26,388 ✭✭✭✭noodler


    You could google it but Indo's consumer section has mentioned consistently that you'd need to be offered a 20-30% discount on your mortgage for it to be worth your while coming off a tracker.


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    #8
    killers1
    Registered Users Posts: 1,443 ✭✭✭killers1


    Benny Cake wrote: »
    I'm with Permanant TSB and tbh I don't expect them to transfer the tracker to the new property. I would, however, be pushing for a favourable rate or some incentive for coming off a tracker, on which they're losing their ar$es....

    You haven't a hope in hell in them allowing you to transfer the tracker, getting any discount off the new rate with ptsb or any write down on the balance remaining. They'll take the view that you want to move so suck it up and get off our tracker rate! Sorry, but you'll be banging your head against a wall there..


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    #9
    feelinfoul
    Registered Users Posts: 34 ✭feelinfoul


    killers1 wrote: »
    Ulster Bank will allow you to bring a tracker to a new property...
    Is this true?We're also looking to move/buy but don't want to go near A1B for fear they try taking us off our tracker(+0.8% above ecb rate),we've been renting our home out(and renting another ourselves) for the past 2 years in the hope of proving that the rental income can cover the mortgage


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    #10
    killers1
    Registered Users Posts: 1,443 ✭✭✭killers1


    feelinfoul wrote: »
    Is this true?We're also looking to move/buy but don't want to go near A1B for fear they try taking us off our tracker(+0.8% above ecb rate),we've been renting our home out(and renting another ourselves) for the past 2 years in the hope of proving that the rental income can cover the mortgage

    It is true, although its only available to existing ulster bank tracker mortgage holders & not to tracker holders with other lenders. AIB's current policy is not to take people off trackers if they move out of the property or purchase a new home and they have turned a blind eye to it. It is though subject to change at any time.


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