# PTSB Tracker Mortgage Question and cutting rates



## core123 (24 May 2012)

Hi,

I reverted to a tracker with PTSB after i came off my fixed mortgage. Great you might say you are very lucky however the terms are ECB + 3.25%. So am paying 4.25%. Do you think anything will be done for the likes of me like or will these reductions only for variable rates? I was very upset when they offered me this rate but I have to grin and bear it as in neg equity and can't change lender. 

John


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## taldar (24 May 2012)

You cannot have it both ways im afraid.  When we were paying 6.1% variable you were still paying your ECB +3.25%  Plus your still paying less than variable customers anyway!


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## Whatstracker (24 May 2012)

How long are you tied to the tracker?


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## corklad (25 May 2012)

@core123

I was just about to post a similar question! I'm in the same boat as you after coming off a 3 year fixed 2 years ago (mortgage taken out in 2007), so I'm on a ECB + 3.25% (=4.25%) right now too. (@Whatstracker that lasts for the rest of the mortgage - no term on it) 

I was actually just on to PTSB and asked the guy what the story was about moving to a variable out of curiosity. He told me you can move off a tracker any time you want and the rate we'd be offered today is 4.69%. Obviously you lose the tracker forever and can't go back. 

But what I was thinking lately was the same as you no doubt - what happens if the ECB goes to it's natural average of 4%, which it will eventually. We're then on 7.25%. Lets not talk about today but ten years from now, say, when all this banking crisis is over. If the ECB is at 4% will the variables be 3.25% or more above that still?

You're question is will they do anything for that tracker margin we were given. The answer is no to that. As taldar said, we had it 'good' when the variables were at 6.1% or so. 

I've another question for people out there but I guess no-one knows the answer right now. With the talk of moving the trackers to IBRC that will be fine for the people on the ECB + 1% who won't ever move off that, but what about people like us on 'bad trackers'? If hypothetically the ECB goes up high and the variables stay low what options will we have? Will we have an option to go back to PTSB and go on a variable? 

I'd be really interested to hear people's thoughts on these points.


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## cloughy (25 May 2012)

"If hypothetically the ECB goes up high and the variables stay low what options will we have? Will we have an option to go back to PTSB and go on a variable?"

this wouldn't happen, where do you thnk variable rates come from, by their nature they vary in line with ECB rates and whether the bank passes on all of the ECB change of part of it is really only the differende. There will be no way that ECB will be 4% and the variable wil lbe less than ECB rate, 

A tracker is a form of variable rate, with the only real difference being the margin being fixed, whereas the margin on a variable is at the discretion of the bank.


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## corklad (25 May 2012)

cloughy said:


> this wouldn't happen, where do you thnk variable rates come from, by  their nature they vary in line with ECB rates and whether the bank  passes on all of the ECB change of part of it is really only the  differende. There will be no way that ECB will be 4% and the variable  wil lbe less than ECB rate,



I don't think you understood my point/question. I'm not saying the variable rate will be lower than the ECB, I'm saying the ECB/variable rate margin may go below 3.25% and therefore my overall rate may go below the variable rate. 

Back in the good old days the ECB/variable margin was around 1%.


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## walshd (25 May 2012)

Bring back the good 'ol days +1%... At least you have a choice to switch back when/if that day comes.. can't have your cake and it eat.  Some of us are slaves to the SVR, whatever the rate is!


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## cloughy (25 May 2012)

corklad said:


> I don't think you understood my point/question. I'm not saying the variable rate will be lower than the ECB, I'm saying the ECB/variable rate margin may go below 3.25% and therefore my overall rate may go below the variable rate.
> 
> apologies, I didn't think you were talking about the margin, or that a tracker would be more expensive than the SVR. The risk with a SVR is they can increase/decrease it at will, whereas with tracker it goes in line with teh ECB. So if rates were to go up by 50bps, then tracker would go up by 50bps, but the bank could chose to increase the SVR by 100bps, and likewise as rates comedown, they haveto pass on full decrease to trackers but no obligation to SRV holders.


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## corklad (25 May 2012)

cloughy said:


> apologies, I didn't think you were talking about the margin, or that a tracker would be more expensive than the SVR. The risk with a SVR is they can increase/decrease it at will, whereas with tracker it goes in line with teh ECB. So if rates were to go up by 50bps, then tracker would go up by 50bps, but the bank could chose to increase the SVR by 100bps, and likewise as rates comedown, they haveto pass on full decrease to trackers but no obligation to SRV holders.



Yes, I think most people on this forum are aware of how trackers and variables work.


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## Brendan Burgess (25 May 2012)

corklad said:


> @core123
> 
> 
> I was actually just on to PTSB and asked the guy what the story was about moving to a variable out of curiosity..





corklad said:


> Yes, I think most people on this forum are aware of how trackers and variables work.



When I saw your query about asking PTSB if you could move from a tracker to a variable, I got the impression that you might not be aware of how trackers work. 

Why would anyone move from a tracker where the rate is cheaper and margin is fixed to a variable where the rate is higher and could potentially move higher again?  If the situation arises at some time in the future that the SVR is cheaper than the tracker, then it may be worth revisiting this.


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## corklad (25 May 2012)

Brendan Burgess said:


> Why would anyone move from a tracker where the rate is cheaper and margin is fixed to a variable where the rate is higher and could potentially move higher again?



They/I wouldn't/shouldn't. 



Brendan Burgess said:


> If the  situation arises at some time in the future that the SVR is cheaper than  the tracker, then it may be worth revisiting this.



Correct. My original point of debate was the margin I have over the ECB with the  tracker is 3.25%. At the point I was offered that the ECB was at 1% and  the corresponding SVR offer was 4.15% (this was 2010). So PTSB were  working with around that 3% margin over the ECB. My point is, say in 10  years time, the margin of the SVR over the ECB goes back to that magical 1% then it doesn't make sense for me to be on the tracker. 

My worry at that point would be that the loan is sitting in IBRC with all the happy people on low trackers and no escape mechanism.


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