I'm being offered a Tracker Mortgage... wtf?

DeVore

Now, as it happens I *do* know what a tracker mortgage is

My 3-year fixed rate mortgage comes up for renewal this month and I got a very nice mail from the bank asking me what I want to do with it now.
In a very nice table they listed all the fixed rate loans plus the normal variable rate.

Then at the bottom they explained that I could also get a tracker mortgage type loan...

I thought they were running a mile from tracker loans and weren't offering them any more?


Can anyone explain that one to me?

drunkmonkey

Which bank?

DeVore

Bank of Ireland

ted1

At what rate?

DeVore

Ok this is really confusing... they say the table is the rates on products I'm being offered, just below that they say "this is a description of the products we have, some might not be available to you" and then they describe a tracker mortgage.

DeVore

ted1 wrote: »

At what rate?

No rate given, its not in the nice table of (mostly fixed) rates.

micar

A friend of mine had this. Just came off his fixed rate a few months ago. He thought he was going straight to variable. But nope, he was going onto a tracker. I think he automatically put in it. He did question it!!!!!

Check you conditions. You'll be surprised. Ring the bank, if it's correct then you don't need me to tell you to jump on it.

Enjoy the couple of hundred of euros you'll have each month.

micar

trackers are not being offered on new business but if they are available under an existing contract then then that's very different.

hairyslug

I came off my fixed rate a few months back, got a nice little letter with the same table of options and a note at the bottom that if I did not reply to them that I would automatically be put on a tracker, it's knocked my mortgage down by 300 a month, tis strange but I'm not gonna argue with them

DeVore

This loan is 3 years old btw

Pro Hoc Vice

DeVore wrote: »

Now, as it happens I *do* know what a tracker mortgage is

My 3-year fixed rate mortgage comes up for renewal this month and I got a very nice mail from the bank asking me what I want to do with it now.
In a very nice table they listed all the fixed rate loans plus the normal variable rate.

Then at the bottom they explained that I could also get a tracker mortgage type loan...

I thought they were running a mile from tracker loans and weren't offering them any more?


Can anyone explain that one to me?

Depends on what the rate above they are offering. There is noting wrong with tracker mortgage unless your margin is too low and you are tracking at rate the bank can't always borrow at. So tracking ECB say plus 1% gives a current rate 1.5% bank losing money hand over fist! but if they offer ECB plus 5% then rate is 5.5% so it all really depends what rate it's tracking and the rate above that.

drunkmonkey

Could be the real deal, might have been a term at the time you got the mortgage but were trackers not finished when you took the loan 3 years ago.

There offering the home improvement loan at 4.5% on your mortgage, it's cheap money.

Pro Hoc Vice

DeVore wrote: »

This loan is 3 years old btw

It may be that the original loan had a revert to tracker clause at the end of the first 3 years, read it all very carefully. The other fixed terms may look better now but depending on the tracker it may be the best option.

Scortho

If you were offered a tracker rate prior to going fixed they have to offer you a tracker rate again once you come of the fixed rate.

micar

infosys wrote: »

It may be that the original loan had a revert to tracker clause at the end of the first 3 years, read it all very carefully. The other fixed terms may look better now but depending on the tracker it may be the best option.

I'd go along with this. You got to get those terms and conditions out and read through them.

Thoie

If trackers were still being offered when you made the original purchase, it may have been one of the options to transfer to once the fixed rate was finished. As micar said, some people had ticked that option 3/5 years ago and forgotten about it.

Call them tomorrow and ask them at what rate the tracker mortgage is. Were you definitely on 3 year fixed, and not 5 year fixed? I thought most banks pulled out of tracker mortgages around 2008. It's possible that they have a common letter for anyone reaching the end of fixed term, which is why it might mention the tracker, but it might not be available to you.

DeVore

OK so this just gets more interesting as I read the fine print closer...

In every table or list (including the Tick Your Choice Of One Of These And Return) list , its only variable and fixed rate options listed.

BUT there is a bolded box in the explanations of "products they have" which says:

If you avail of Fixed Rate or Variable Rate options our tracker commitment to you is deemed to be at an end and the lenders prevailing Standad Variable Rate will apply on expiry of this loan. For the avoidance of doubt, we wish to advise you that if you avail of a Fixed Rate, you will lose the ability to avail of a Tracker Rate Mortgage in the future

So, thats me into the bank monday morning

DeVore

Thoie wrote: »

If trackers were still being offered when you made the original purchase, it may have been one of the options to transfer to once the fixed rate was finished. As micar said, some people had ticked that option 3/5 years ago and forgotten about it.

Call them tomorrow and ask them at what rate the tracker mortgage is. Were you definitely on 3 year fixed, and not 5 year fixed? I thought most banks pulled out of tracker mortgages around 2008. It's possible that they have a common letter for anyone reaching the end of fixed term, which is why it might mention the tracker, but it might not be available to you.

Definitely 3 year.

Yeah, my worry is that this is just a standard letter with a variable "table of rates/offerings" because the option to pick "Tracker" is not there in the "Return this" letter.

On the other hand, there is that box I mentioned above.

Curiouser and curiouser said Alice.

wexie

infosys wrote: »

It may be that the original loan had a revert to tracker clause at the end of the first 3 years, read it all very carefully. The other fixed terms may look better now but depending on the tracker it may be the best option.

It's likely to be this, when we got our mortgage we got a special discounted deal for new business that would default (unless otherwise specified at the time) to a tracker after the discounted period.

It's entirely possible that the bank don't really want to be offering you a tracker but simply have no choice as it's in the conditions of the mortgage offer from 3 years ago.

If you still have the paperwork somewhere (you kinda should) you should be able to look it up.

smcgiff

That bit about losing your right to a tracker is both sneaky and encouraging.

But as been said above it really depends on the tracker rate. It MAY not be worth it, but definitely worth looking into.

You should go into the bank tomorrow morning and say they HAVE TO tell you what that tracker rate is.

micar

DeVore wrote: »

OK so this just gets more interesting as I read the fine print closer...

In every table or list (including the Tick Your Choice Of One Of These And Return) list , its only variable and fixed rate options listed.

BUT there is a bolded box in the explanations of "products they have" which says:



So, thats me into the bank monday morning

This is crucial "If you avail of Fixed Rate or Variable Rate options our tracker commitment to you is deemed to be at an end",

from this, they have a tracker commitment to you. If you don;t avail of it now, you'll never be offered it again.

It's a one time offer!!!!!!!

micar

wexie wrote: »

It's likely to be this, when we got our mortgage we got a special discounted deal for new business that would default (unless otherwise specified at the time) to a tracker after the discounted period.

It's entirely possible that the bank don't really want to be offering you a tracker but simply have no choice as it's in the conditions of the mortgage offer from 3 years ago.

If you still have the paperwork somewhere (you kinda should) you should be able to look it up.

true true, the bank have no option.

From a compliance perspective, they have to be open and honest on what you are entitled to.

Imagine if they decided to not mention the tracker option and just went ahead and offered only fixed and variable options. All it would take is one person to forensically go through their conditions and spot this. Imagine the uproar.... the central bank, the regulator, the government and even worse.........Joe Duffy.

wexie

Forgot to say, if, when you go in on Monday, it turns out you can avail of a tracker on a decent rate, you should really go out and buy a bottle of nice wine for whoever managed to swing that deal for you in 2010!!!

The_Morrigan

My mortgage is five years old with BOI and I get the same template letter every time my fixed rate term is due to be renewed. Trackers were not available as a product in 2008 when I took out my mortgage but the bank have not bothered to do a pretracker and post tracker letter when it comes to rates.

dessierb

This is real. Grab it. I got almost 10k back from my bank because after the introductory offer rate ended the bank put me on a variable without notification or offer of other rates. The central bank investigated this and found the bank on breach. Banks must now offer all the rates including tracker to you. This loophole is now of course closed but you would be one of the last to qualify. Grab it grab it grab it....

flynny50

Hi,

We bought our house in 2006 half tracker half fixed.
When the fixed was up after 5 years Aib just switched us over to variable.
Reading our terms it says '' after 5 years rate will revert to banks variable rate,unless borrower avails of another interest rate option then on offer by the bank,rates include margin of 0.00% APR 4.087% ''

Anyone know if i should have been offered tracker?

phormium

If your mortgage is only 3 yrs old, i.e. taken out in late 2010, then I would seriously doubt you have any tracker coming to you, they were all discontinued for new customers to be best of my knowledge by late 2008.

Agent J

Wow. That is quite odd.

It is true that a lot of fixed term mortgages did have the option to roll into tracker mortgages when they expired however ( As pointed out by others) by late 2008 trackers were effectively pulled from the market.

Which is why I am wondering why on earth a fixed mortgage from 2010 has an option of a tracker at the expiry. Trackers were not available to the general public by then. It wasn't rolling from another fixed mortgage before then was it?

I would also find it hard to believe that a bank would put the word "Tracker" anywhere near a letter unless they had to due to the obvious implications.

Still if this comes off and is legit. Check the rate on it and grab it with both hands!

josip

Here's a copy of our letter.



Thanks OP. I hadn't paid any attention to the Tracker bit and instead had focused on the various Fixed an LTV rates. Which may be BoI's desired course of action.

I'll also enquire on Monday; however I would be very surprised if the Tracker is within anything less than 5% of ECB.

(Update after detailed rereading)
It looks like the Tracker part is just part of a standard "boiler plate" letter.

It says that "the table contains an indicative estimate of the cost of repayments for each rate being offered"
Tracker not listed, so the implication is that Tracker is not offered.

And

"A description of our different product types and examples of the advantages and disadvantages follow.
Some product types which we describe may not be availabale to you."

So there's no reason to assume that just because a Tracker is described that it's being offered.