New Mortage rates after fixed term expired

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eunan1981

Guest
I fixed my mortgage for first 2 years and this expires in coming weeks. Bank have offered me 5 options. But im not sure on their meaning. Will be contacting bank for further info/advice but some independant thoughts would be great:

Tracker + 1.35% >500K & LTV >80% - 2.35%
Existing Variable LTV Rate PDH - 3.45%
2 Year Fixed PDH - 3.5%
3 Year Fixed - 3.95%
5 Year Fixed PDH - 4.75%

I thought trackers were done away with and anyone who got one seem to gloat about it when asked so this seems obvious choice but does 500K and LTV have any bearing - not too sure what they refer to? The 3 fixed offers are self explanatory however existing variable is 3.45% whereas if i dont respond to bank they put me on an automatic variable rate of 2.35% so again unsure in difference.

Tracker and Variable both 2.35%. Which better in long run?

Appreciate any help.
Thanks
 
eunan1981 said:
Tracker and Variable both 2.35%. Which better in long run?

Appreciate any help.
Thanks
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Grab the tracker, they would not offer this unless they were obliged to do so.

I f you accept the variable, your tracker option is gone. Can’t see you ever getting a variable rate again that’s only 1.35 above ECB.

The 2.35% variable they are offering you today is a last ditch effort to steer you away from the tracker. Variable rates rise at the banks discretion and all banks standard variable rates today are well in excess of 1.35 above ECB.
 
My understanding of the tracker is that it is only available if your mortgage balance is greater than 500k and has a LTV of greater than 80%. Does this coincide with your mortgage.

'if i dont respond to bank they put me on an automatic variable rate of 2.35% so again unsure in difference.'
Where did you get this from - is it in your original agreement for when you took out the fixed mortgage.

I think the 2 or 3 yr fixed rates are good offer although I am not a fan of fixing. What about 50:50 fix and variable.
 
eunan1981 said:
but does 500K and LTV have any bearing - not too sure what they refer to?
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They have different rates for different size mortgages and different Loan To Values.

They are offering this rate if your mortgage is greater than €500K and your LTV is greater than 80%.

Presumably if this is what they are offering you, then you fit into this category.

If not accept the tracker and let them come back to you with the tracker rate that is relevant to your category, it could even be a better rate if your LTV is less than 80%.
 
Thanks for responding guys. The tracker is the first offer on the list however my mortgage is for 200K - so maybe tracker isn't available to me. Although why include it if its only for >500K when they would obviously know the amount of my mortgage.

And the 2.35% variable as opposed to 5 options is quote "in accordance with your loan offer or amended documentation, automatically move to variable rate of 2.35%".

Must check regarding tracker however as you say twofor1, i could accept it and await relevant tracker rate for my size of mortgage.
 
Your original documentation should state your options for when the two year fixed rate ends, if one of the options given says “at the end of the two year fixed term the loan will revert to ECB + xx%”, then you would be entitled to this option.

Would be worth finding this document.
 
twofor1 said:
Your original documentation should state your options for when the two year fixed rate ends, if one of the options given says “at the end of the two year fixed term the loan will revert to ECB + xx%”, then you would be entitled to this option.

Would be worth finding this document.
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Twofor1 has put his finger on it. Your mortgage must revert of a tracker of ecb + 1.35 unless you opt for a different rate.

I presume your mortgage is with Bank if Ireland. Bank of Ireland appear to issue those rate option letters as a sneaky attempt to lead unsuspecting customers into giving away their tracker mortgage rates.
 
Heres the condition (Shortended version) - as per Loan offer letter:

Basically first part states if no agreement in rate - "the interest rate applicable to loan will be a variable interest rate".

Second part reads - Interest rate shall be no more than 1.35% above ECB Main Refinancing Operations Minimum rate (Repo Rate) for term loan. And if repo rate is certified by lender to be unavailable, the interest rate applicable will be prevailing home loan variable rate.

Does this mean i'd be entitled to Tracker rate of +1.35%?
 
There is no need to reply. Just ignore the letter your mortgage automatically reverts back to a tracker +1.35. Your bank is simply trying to catch you out.
 
Artois said:
There is no need to reply. Just ignore the letter your mortgage automatically reverts back to a tracker +1.35. .
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If ECB + 1.35% was the only option the Letter Of Offer mentioned then it should revert to this automatically, but I would not count on it.

Usually they give a number of options and you must let them know which one you want. My guess would be if you do not let them know what you want, the loan will revert to whatever the bank wants which will not be the tracker.
 
Artois said:
There is no need to reply. Just ignore the letter your mortgage automatically reverts back to a tracker +1.35. Your bank is simply trying to catch you out.
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I certainly would not take that chance,indeed I would ensure I sent that letter my registered post.

I would no more trust a bank nor a banker as far as I could throw them,they have proven again and again to be deceitful beyond belief.
 
Appreciate the responses folks - great to get bit of advice. Definitely think i'll respond and choose tracker option as it specifically states that it will change to a variable 2.35% rate rather than ECB +1.35% if they don't get response by specific date.
Cheers again.
 
Knuttell said:
I certainly would not take that chance,indeed I would ensure I sent that letter my registered post.

I would no more trust a bank nor a banker as far as I could throw them,they have proven again and again to be deceitful beyond belief.
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Its not about trust, its about the written terms of the mortgage agreement. The bank are obliged to put him back on a tracker unless the mortgage holder consents to change to a different rate.

I got the same letter and also a call about a year and a half ago from Bank of Ireland when my tracker's initial year 1 rate of ecb + 0.7 went to ecb +.9. The bank offered a number of rate options. I viewed their letter as unnessary and an attempt to catch mortgage holders out.

I did not reply to their letter and have been on ecb +.9 ever since.
 
Thanks all for advice. Just got word from bank yesterday that i have got the Tracker rate so i'll be no more than 1.35% above ECb for lifeterm of loan, so Happy Days! compared to what i was and could have been paying.
 
eunan1981 said:
Thanks all for advice. Just got word from bank yesterday that i have got the Tracker rate so i'll be no more than 1.35% above ECb for lifeterm of loan, so Happy Days! compared to what i was and could have been paying.
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Hi, Im a bank of Ireland Mortage holder and im coming out of a two year fixed next month. I got a letter from BOI today with similiar information to what you got i.e. five options including the tracker option at 1.35% above ECB. Im considering this option as the Variable rate they are offering is 3.4% and the fxied range from 3.7% (2year) to 5.0% (5year). Did you send off that letter and tick the box as they requested? I presume if i do that then i like you will get the ECB rate +1.35% for the duration of the loan also? Considering im coming from a fixed rate of 5.2% im pretty happy to be saving something (nearly 200) on monthly repayments if i go with the tracker rate as they offer. Any advise be great
 
Yes, tick the box, smile and send it back locking in the tracker for life.

If you have been meeting the old repayments without being overstretched then it would make sense to fix your new payment at the same level as you are currently paying. By arranging this overpayment you will reduce the term of the mortgage and take years off it. Alternatively start saving that €200 in a higher interest savings account and pay a lump sum off the mortgage as you see fit.

[broken link removed]
 
eunan1981 said:
Heres the condition (Shortended version) - as per Loan offer letter:

Basically first part states if no agreement in rate - "the interest rate applicable to loan will be a variable interest rate".

Second part reads - Interest rate shall be no more than 1.35% above ECB Main Refinancing Operations Minimum rate (Repo Rate) for term loan. And if repo rate is certified by lender to be unavailable, the interest rate applicable will be prevailing home loan variable rate.

Does this mean i'd be entitled to Tracker rate of +1.35%?
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Eunan,

That's very interesting. Those two conditions are (almost) verbatim the same two included in my own agreement, however Bank of Ireland has refused to offer me the tracker rate. Currently waiting patiently in the queue of financial ombudsman complaints.
 
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