# Give up tracker?



## Frederick1 (3 Apr 2019)

Hi all,

We have a split mortgage with PTSB having moved home 2 years ago and ported the tracker. From a recent meeting with another bank it looks as if some savings can be made by switching.

Just wondering if there is any reason not to switch? Are we risking anything by giving up the tracker?

Tracker mortgage: €205k @ 2.1%, 17 years remaining
Variable rate mortgage: €145k @ 3.9%, 31 years remaining

LTV around 65 -70%

Thanks in advance for any help


----------



## luckystar (4 Apr 2019)

You've a pretty high margin on the tracker and paying way over the odds on the variable. Personally think you should move to a better combined rate. And try bring overall term to 25 years or less


----------



## so-crates (4 Apr 2019)

You haven't really given enough information. All you have outlined is your current situation, impossible to confirm the advantage of a switch without seeing what it would go to.

Just to check, I assume the numbers are the current outstanding balances?


----------



## gimp (4 Apr 2019)

Dont ever give up a Tracker. You can never get it back
And why would you believe anything a Bank tells you


----------



## Brendan Burgess (4 Apr 2019)

Frederick1 said:


> Tracker mortgage: €205k @ 2.1%, 17 years remaining
> Variable rate mortgage: €145k @ 3.9%, 31 years remaining



Hi Frederick

The way to answer this is to calculate the average rate you are paying. 

Assuming you are referring to the current balances...



KBC is the cheapest variable rate for your LTV at 3.05% + €3,000 to cover your fees, so that is clearly not the right thing to do.

You could switch the lot to Ulster Bank at 2.3% fixed for two years.  But where would you be after that?  If the banks increase rates more than the ECB rate increases, you would regret switching.

So I reckon that paying an aggregate 0.5% over the cheapest fixed alternative is probably a price worth paying for the tracker.

If you have surplus cash, pay off the non-tracker portion of the mortgage.

You must keep this decision under review. 
As time progresses, you pay down the capital on the tracker quite quickly, so its value diminishes.
If the banks cut rates without a cut in ECB rates, there might be better value elsewhere.

Brendan


----------



## Brendan Burgess (4 Apr 2019)

gimp said:


> Dont ever give up a Tracker. You can never get it back



This is not correct. Most of the time, you should not give up a tracker. But a high margin tracker with a short mortgage term could easily be given up to get a better rate on the rest of the loan. You have to do the maths.


----------



## Frederick1 (4 Apr 2019)

Many thanks for all your replies. 

@ so-crates: Yes, they are the current balances.

KBC were offering 2.8% fixed for 3 years, which  but I guess, as you say Brendan, there's the risk of the banks increasing the rates more than the ECB rate after that.


----------

