# Moving House - Tracker Mortgage Negotiation



## cz22

Quick one, has anyone on a Tracker attempted to negotiate with their bank when moving to a new property? i.e. maintain their spread over ECB or even allow the bank to increase it within reason in return for paying down and taking out a mortgage on a new property.


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## RMCF

I asked about this late last year.

Was told if I was to move house then your 1st mortgage is closed out, and a fresh one opened. In other words "no you can't keep your tracker which is costing us big time".


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## robd

cz22 said:


> Quick one, has anyone on a Tracker attempted to negotiate with their bank when moving to a new property? i.e. maintain their spread over ECB or even allow the bank to increase it within reason in return for paying down and taking out a mortgage on a new property.



ZERO chance.  Legally mortgage has to be cleared in full by solicitor for sale to proceed.  Otherwise other party would not be getting legal possession.

You can't transfer a mortgage to a new property.  You would be taking a completely new mortgage, new contract etc., unlrelated to first mortgage, on new property.

Why would any bank then offer you a loss making tracker mortgage on a new property?


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## cz22

Never mentioned transfering the mortgage to a new property. Simply want to see if anyone has attempted to negotiate with their bank, i.e. I would like to move house but the loss of the tracker rate outweighs the desire to move. Both the bank and I are locked into a contract that is not to the benefit of either party. Quid pro quo, you give me the flexibility to move and I'll agree to pay a higher rate thus reducing the loss the bank is making, albeit not as punitive as market rates.

It seems logical but not sure if any mortgage lenders are open to or have the capacity to negotiate.


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## Pope John 11

RMCF said:


> I asked about this late last year.
> 
> Was told if I was to move house then your 1st mortgage is closed out, and a fresh one opened. In other words "no you can't keep your tracker which is costing us big time".



Yes, and it is also costing all variable mortgage holders too. So why should variable mortgage holders pay extra on top of their mortgages just because you want to hold onto your tracker and move house at the same time. If you 'negotiate' and it goes your way, then its variable mortgage holders that have to suffer.


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## Brendan Burgess

I was at an Irish Banking Seminar on the mortgage market last year and one of the speakers mentioned that two Irish banks had "transferrable tracker mortgages". In other words, you were able to transfer the terms and conditions to a new mortgage on a new property.

However, despite enquiries, I was unable to find any evidence that such a term exists in any Irish mortgage. I wasn't able to identity the institutions who had such mortgages eitehr. However, it's worth checking the mortgage agreement just to make doubly sure.


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## csirl

Pope John 11 said:


> Yes, and it is also costing all variable mortgage holders too. So why should variable mortgage holders pay extra on top of their mortgages just because you want to hold onto your tracker and move house at the same time. If you 'negotiate' and it goes your way, then its variable mortgage holders that have to suffer.


 
Banks are not making a lose on tracker mortgages - this is just banking PR spin. They are making a loss on the speculation games they played with their mortgage accounts which is not the same thing. 

At the time when the vast majority (if not all) tracker mortgages were given out, the funding was available to the bank for the entire term of the mortgage at a rate less than the borrower pays - if the banks had stayed put and not speculated, they would still be making a healthy profit out of their existing tracker mortgages. 

For example. Say a customer was given a tracker at ECB +1% for 25 year mortgage. The bank purchased the money at ECB + 0.6% locked in for 25 years and was due to make a profit of 0.4% per annum with zero risks. However, after having done this, the banks decided that they'd like to make even bigger profits and started trading the these contracts for shorter, more profitable funding arrangements which ultimately tanked.


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## DB74

The banks are making a loss on the tracker mortgages though, albeit through their own greed or whatever.

They are just not going to put their hands up and say 

"We could have guaranteed a profit on the tracker but we screwed up and now we are making a loss"


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## dec1892

How about trying to negotiate with the bank that you'll remove them from the loan commitment and therefore the tracker rate (by selling the house) if they were willing to reduce the mortgage still outstanding by 10%??

Has anyone heard of this been done before?


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## cz22

csirl said:


> Banks are not making a lose on tracker mortgages - this is just banking PR spin. They are making a loss on the speculation games they played with their mortgage accounts which is not the same thing.
> 
> At the time when the vast majority (if not all) tracker mortgages were given out, the funding was available to the bank for the entire term of the mortgage at a rate less than the borrower pays - if the banks had stayed put and not speculated, they would still be making a healthy profit out of their existing tracker mortgages.
> 
> For example. Say a customer was given a tracker at ECB +1% for 25 year mortgage. The bank purchased the money at ECB + 0.6% locked in for 25 years and was due to make a profit of 0.4% per annum with zero risks. However, after having done this, the banks decided that they'd like to make even bigger profits and started trading the these contracts for shorter, more profitable funding arrangements which ultimately tanked.


 
Agreed. 

The rate increases have significantly more to do with poor funding and credit decisions, simply spin to deflect attention.

To put it rather crudely, 

If I don't negotiate and maintain the status quo, the bank suffers (funding cost > yield), I don't move to a preferred location, and the funding shortfall exists for the bank which has to be made up by someone... i.e. variable rate holders.

If I do negotiate, bank has opportunity to reduce their funding shortfall on my mortgage, I get to move, and the reduced funding shortfall should benefit someone... you would like to think the benefit would go to variable rate holders but who knows... a lot of balance sheet clean up yet to go.

Just interested to hear if anyone has had any similar discussions with their bank. Not looking for a variable v tracker debate... similar to the divisive spin of public v private sector.


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## NorfBank

dec1892 said:


> Has anyone heard of this been done before?



It's not happening.

Most people who have trackers have them for a long term, say 25 year average. 

The banks thinking is that in the next few years, credit will get back to normal, they will be trusted in the interbank markets again so can borrow at normal rates while ECB increases will make their trackers profitable again. 

They are not going to crystallise their losses now. 

It could be foolish but hey why change the habits of the last few years?


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