Reducing Mortgage Term - Tracker Mortgage

The Dark Knight

I'm lucky enough to be on a tracker Mortgage with PTSB. I'm thinking of increasing the monthly repayments in order to reduce the term.

Is there any reason PTSB would not grant this? Worried that they may try to take me off my tracker; if so, can they do this?

Thanks for any advise on this.

Q&A

Nothing for them to "grant". A tracker mortgage is like a variable mortgage you can overpay all you like. They can't touch your tracker for overpaying.

Zaph

I have a tracker mortgage with Pepper (originally National Irish Bank/Den Danske). Coincidentally I increased my monthly repayment to them today. The only potential issue I had was that I had heard in the past of some institutions capping the amount you could overpay, presumably as a percentage of the normal monthly repayment. I checked with Pepper and they said I could pay as much as I liked, so now I'll be paying about 150% of my actual repayment amount each month.

Static M.e.

I'm curious why you (one) would overpay a tracker or pay it off earlier from a personal finance point of view, if it is the cheapest loan you are likely to ever get?

Xander10

https://www.boards.ie/discussion/comment/117841603#Comment_117841603

Maybe the only loan he has. Being mortgage free sooner rather than later is a nice feeling

Buddy Bubs

Putting the overpayment amount into something that will hopefully yield more than the tracker interest rate and in say 10 years using those funds to clear mortgage early would be the more traditional advice. Not without its risks but that's what I'd do.

Zaph

https://www.boards.ie/discussion/comment/117841603#Comment_117841603

For me it's because my mortgage, which is the only debt I have, essentially goes up to my 65th birthday, however I do have the option of retiring any time after 60. I'm 54 now and this will essentially buy me back a few years so that I could avail of that and retire mortgage free from around 62. Admittedly I could invest the money instead, but it would be for a relatively short period and there's no guarantee that I'd have enough of a return to make an appreciable difference between overpaying now and investing. However if I'd been in a position to overpay 7 or 8 years ago I definitely would have gone down the investment route and I possibly could have made enough to be able to pay off the mortgage by 60.

Static M.e.

@Zaph, yeah I can see why you would do it now. There is a lot to said for being completely debt free and I can only imagine that it must be a great feeling. I have a tracker and I've often thought about paying it off early even though I know it doesn't make sense for me to do it which is why I was curious. I've another 15 years or more to go at this stage. Retiring at 60 and mortgage free would be just perfect.

Q&A

https://www.boards.ie/discussion/comment/117840301#Comment_117840301

Don't confuse a fixed rate mortgage - which with most lenders will have some overpayment limit - with a tracker/variable rate mortgage that has no limit.

The Dark Knight

Thanks for all the replies. Great info.

As @Xander10 guessed, this is the only loan I have so really wish to be debt free as soon as possible. I understand that this is relatively cheep money, but there is currently no value in savings or even bonds. Would need to invest in equity, which I'm already exposed to in current share portfolio, pensions, etc.

I'd just prefer to have the burden of a mortgage off my back, so if myself or my wife did have job or health issues - we wouldn't have that worry at lease.

I know it's probably not the optimal financial option. But there is more to finance than pure numbers, there is the psychological side of decisions also.

Thanks for all the advice!

Bass Reeves

I am semi retired, I have a commercial tracker on s farm loan. Originally I borrowed 150 k on this loan over 20 years. There is no way I would pay it off early. There is slightly less than 4 year's left. There is about 45k left on payments. The interest last year was about 350 euro.

From my cold dead hand will it be taken off me early.

Bobeagleburger

Have you maxed your pension contributions OP?

Might be worth doing that before paying off a cheap mortgage? A lot of factors though, mortgage rate, pension funds invested in etc etc

Get professional advice would be a good idea. Might save you a good few quid. Good luck.