# New tracker deal?



## davep (18 Apr 2011)

Just wondering if the new deal is offered by AIB. I have a tracker of 137k. Repay 1117 per month for next 11 years or so. I could afford to pay off about 40k. My existing tracker is .6 above the ECB. I feel it might be good to clear as much as I can but there are always wise advice here from those who totally understand these issues. Any feedback would be great.
Thanks
Dave


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## Gekko (18 Apr 2011)

I think that you'd be mad to overpay in relation to this mortgage.

You're funded at ECB + 0.6%. You can easily get a (net of DIRT) deposit rate in excess of this.

For example, BOI are currently offering a 2 year deposit product paying 3% in the first year and 6% in the second year (i.e. 4.5% over the lifetime of the product). You can withdraw the funds if needs be after one year.

If you lodged your €40,000 into the above product, your "after DIRT" take for the two years would be €2,628 [i.e. €40,000 x 2 x (4.5% x 73%)]

During the same period, you'd pay interest of €1,480 (i.e. €40,000 x 2 x 1.85%) on €40,000 of your mortgage (at a current rate of 1.85%).

The ECB rate would have to rise a hell of a lot before paying down your mortgage would make sense, and even then deposit products "beating" your mortgage rate should be available.


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## davep (18 Apr 2011)

Can I ask a straight question. If I paid off 40k then the mortgage would reduce by 44k. Would this not help? I have put my extra into AIB at 4.45 over one year as I told them I was offered 4.5 by Ulster bank. They said they could do 4.45 and I felt that the extra messing about was not worth the .05. So that's my situation now? Does it. Still make sence to sit tight


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## serotoninsid (18 Apr 2011)

@Gekko:  Is there not an additional factor right now, re. deposit risk?

Who's to say we don't wake up one morning and any irish held deposits are frozen?  Other than that uncertainty, I was of the opinion never to pay back my tracker early -and have been accumulating and tying up my hard earned savings in rolling 1 year fixed deposit accounts...although a bit uneasy about it right now..


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## Brendan Burgess (18 Apr 2011)

Lads

You are off topic here as AIB have no such deal. If they announce a deal, then you can do the calculations for dave

Brendan


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