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Tracker Retention Mortgage

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  • 21-10-2016 10:17am
    #1
    Mitten31
    Registered Users Posts: 24 ✭


    Hi All,

    As per my thread title has anyone who has a tracker mortgage manged to successfully complete a trade up or down and retain this rate?

    We are with AIB and it's an option for us but the logistics of having to complete the sale of our current property and purchase another within 28 days seems impossible. For obvious reasons we are keen to keep our tracker rate (ECB +.75% with an additional 1% for the new mortgage). I literally haven't heard or met anyone IRL who has managed to complete this...

    Thanks a mill!


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    #2
    Davd
    Registered Users Posts: 138 ✭✭Davd


    Mitten31 wrote: »
    Hi All,

    As per my thread title has anyone who has a tracker mortgage manged to successfully complete a trade up or down and retain this rate?

    We are with AIB and it's an option for us but the logistics of having to complete the sale of our current property and purchase another within 28 days seems impossible. For obvious reasons we are keen to keep our tracker rate (ECB +.75% with an additional 1% for the new mortgage). I literally haven't heard or met anyone IRL who has managed to complete this...

    Thanks a mill!

    We are currently trading up at the moment. Our tracker is increasing by +1.0%. Additional borrowing at variable rate. Since our variable will be low, the plan would be to clear this in 3-5 years.
    As for the sale and purchase within 28 days, this timing is handled by the solicitor - you just need to sign your sale and purchase contracts on the same day.
    Firstly get pre-approved for additional borrowing. Then find the house you want and make an offer - putting yours on the market at the same time. This may work more easily if you use the same estate agent as the vendors are using as it will be in their interest that both sales go through. But this is not necessarily true. Then you just sign the buy and sale documents on the same day, locking in both your new purchase and sale on the same day and also the closing date for each. Might be an idea to have your closing date a week after your new buy date - give yourself time to give the new house time to be painted etc before moving in.


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    #3
    Mitten31
    Registered Users Posts: 24 ✭Mitten31


    Thanks for your response. Very helpul. We are with AIB at the moment and have been through the details with them so I was aware of the +1% on to the tracker rate etc. We are not in a position to buy until March next year. Are you buying a new build? I have heard people have a terrible time completing all aspects of the sale in the 28 day window so was keen to see what others experience have been.
    Was the actual mortgage application painful?


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    #4
    Davd
    Registered Users Posts: 138 ✭✭Davd


    The mortgage application should be straight forward enough given banks want you off the tracker mortgage so will jump at getting an additional 1% on your current rate. Again, the 28 days completion depends on your solicitor. They should be able to time the signing of the contracts to the same day so you are only committing to buy when committing to sell. And closure of the sale should be on the same day or give yourself a week before you move out of your own home to the new house so you have time to complete some fixing up, if required. Doing it this way means the 28 days is only in case there is a delay in meeting the closure date due to documentation errors.


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    #5
    sevenoclock
    Registered Users Posts: 4 ✭sevenoclock


    Hi i'm looking for information on the above.
    I was aware of all the details above except the 28 day purchase and sale .
    Can anyone shed more information on this process?
    Would really like to hear from someone whos been through the whole process from start to finish.
    Thinking of moving and have a tracker mortgage with AIB , . Thanks


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    #6
    Placid_Casual
    Registered Users Posts: 530 ✭✭✭Placid_Casual


    I've just been approved for a tracker retention mortgage with AIB and there is no reference to any 28 day limit in any documentation i've received nor has it ever been mentioned to me by anybody from AIB. I've seen it mentioned in a couple of other threads from 2016. I guess they may have done away with it since then?


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    #7
    sevenoclock
    Registered Users Posts: 4 ✭sevenoclock


    Placid_Casual wrote: »
    I've just been approved for a tracker retention mortgage with AIB and there is no reference to any 28 day limit in any documentation i've received nor has it ever been mentioned to me by anybody from AIB. I've seen it mentioned in a couple of other threads from 2016. I guess they may have done away with it since then?

    Thanks for the reply mate.
    I've talked through the process with AIB a few weeks ago and nowhere did anyone say anything about this either.
    I was asking incase this was something that would creep up after the process was finalised.
    They did say that my current home had to be sold and the mortgage repaid in full before i could draw down the new mortgage.
    This could possibly lead to having to move out of my home before i find a new property.
    If i have this wrong please feel free to comment.
    All advice appreciated.
    Thanks


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    #8
    Vim Fuego
    Registered Users Posts: 746 ✭✭✭Vim Fuego


    An AIB tracker retention/mortgage approval letter from June - nothing in there about 28 days. This thread scared me for a second.

    4TAktwR.jpg


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    #9
    CeilingFly
    Closed Accounts Posts: 3,378 ✭✭✭CeilingFly


    Mitten31 wrote: »
    Hi All,

    As per my thread title has anyone who has a tracker mortgage manged to successfully complete a trade up or down and retain this rate?

    We are with AIB and it's an option for us but the logistics of having to complete the sale of our current property and purchase another within 28 days seems impossible. For obvious reasons we are keen to keep our tracker rate (ECB +.75% with an additional 1% for the new mortgage). I literally haven't heard or met anyone IRL who has managed to complete this...

    Thanks a mill!

    In many cases people complete sale of one property and purchase of another property on the same day. Possibly you are planning to rent for a while?

    Also the tracker retention is not that great. - Not too bad either,

    Your tracker goes to 1.8% for the current tracker balance for the remaining years left of that tracker. - If you need to borrow more you are effectively taking out a second mortage for the balance at current rates. 3.3%

    The tracker retention is at today's rate worth 1.5% per remaining year on the falling balance of your current tracker amount until the end of your current tracker period.

    Example

    If current mortage balance is 150,000 and there are 10 years left then at today's rates the following interest would be paid over the next 10 years

    At Current tracker 0.80% interest €6129
    At Tracker retention rate 1.8% interest €14016
    At current 3.3% rate €26,313


    In some case you may find that a rate from another lender on the overall amount would work out cheaper (depends on amount of extra funds you are borrowing)

    e.g. Ulster bank 2.6% 4 year fixed would be better if your current tracker balance is 150,000 and you need at least 150,000 extra borrowing.



    In a way you need a math degree to work out the best option :) (and I don't have one of those!)


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