Tracker Mortgage Ulster Bank

acer1983

Hi all , just looking for some advice currently have a tracker with Ulster Bank house valued €450,000 amount of mortgage outstanding €75,000 14 years left on mortgage. Should I fix.?

Geuze

What is the tracker margin?

acer1983

Hi Geuze currently 1.45%

Geuze

The word currently is odd, as tracker margins are fixed for the life of the mortgage.

The current ECB rate is 1.25%.

Your mortgage rate is ECB + 1.45% tracker margin = 1.25 + 1.45 = 2.70% at the moment.

Bear in mind that the ECB rate will rise again, twice, fairly soon.

There are a lot of debates on AAM about what your issue:

https://www.askaboutmoney.com/forums/tracker-mortgages-other-than-redress-issues.116/

Geuze

https://www.askaboutmoney.com/threads/i-have-an-ulster-bank-tracker-%E2%80%93-should-i-consider-fixing.228533/

This seems to be useful:

What will happen if I stay on my tracker?

While permanent tsb is acquiring the non-tracker mortgages from Ulster Bank, AIB is acquiring the tracker mortgage book.

So your mortgage will move to AIB.

Apart from the shocking treatment of tracker customers, AIB has treated its mortgage customers fairly – well, fairly in comparison to other lenders.

• It does not maintain an artificially high default variable rate, and so lazy or busy customers coming off fixed rates don't find themselves paying a super-high rate. (The default variable rate for a customer with >80% LTV with AIB is 3.15% compared to 4.5% for Bank of Ireland.)
• It allows existing customers to avail of the rates on offer to new customers (even though we had to embarrass them into changing their policy on this)
• It does not try to trick customers with very large cashback
• It had an unfair way of calculating break fees, but again we embarrassed them into bringing this into line with their legal obligations and, in fact, customers can benefit from a peculiarity in the result.

Conclusion: AIB is likely to be good value in the long term, so you do not need to consider switching to another lender.

What will happen if I fix now?

Update and correction: 19th September 2022: if you fix a tracker now, your mortgage will still be sold to AIB, not ptsb.

The normal considerations apply:

• If you fix, assume you will not get your tracker back when the fixed rate ends
• If you have an expensive tracker, say, ECB + 1.75% or higher, you should probably fix
  • Note: "ECB + 1.75%" means "European Central Bank rate plus an extra 1.75%" (a margin of 1.75%). Check your mortgage contract.
  • See here for AIB's fixed rates
• If you are planning to trade up or overpay your mortgage, you probably shouldn't fix, as you may face early repayment penalties on a fixed rate, which don't apply to trackers
  • But if you are planning to trade up in, say, 5 years and your tracker is not particularly "cheap" (e.g., if it's ECB + 1.5% or higher), you could consider fixing on Ulster Bank's 5-year rate. (Note the word "consider".)

walterking

https://www.boards.ie/discussion/2058265934/tracker-mortgage-ulster-bank

your balance is only 75k.

Interest rate changes will not have a huge affect on you.

I suspect your tracker is 0.95% - July rate increase brought this to 1.45%. Sept rate increase notifications only going out now will bring it to 2.2%.

If ecb went to 3% (your rate 3.95%), your repayments would go up by €150 a month.

You could take the 10 year 2.8% rate if you need the peace of mind, but your tracker will be lost. However at the end of 10 years, you balance will be about 30k so rate changes even less of a concern