# Which is better Tracker or Variable rate



## rooneys (24 Feb 2009)

I'm looking to move my mortgage and the variable rate that I am being offered to move is 3.25%. However my bank have moved me onto a tracker rate at 4.25 %. I'm also looking to reduce the term of my mortgage to 20years from 27.

Any help or advice would be appreciated


----------



## kkelliher (24 Feb 2009)

The only difference is a tracker will move with the ECB whereas the variable rate is up to the bank if they move or not. You can be sure they will pass on a rise but dont always pass on a fall in rates.

If you can get a good tracker I would go with it personally


----------



## PaddyW (24 Feb 2009)

So you are on a tracker rate of ECB +2.25% by the looks of it. The ECB would have to drop another percentage point to come in line with the variable rate. For now at least, the variable rate is definitely the wiser choice and may still be if the ECB rate starts to rise again. I would go variable myself.


----------



## irishlinks (24 Feb 2009)

PaddyW said:


> So you are on a tracker rate of ECB +2.25% by the looks of it. The ECB would have to drop another percentage point to come in line with the variable rate. For now at least, the variable rate is definitely the wiser choice and may still be if the ECB rate starts to rise again. I would go variable myself.



Ecb plus 2.25 is not that good a tracker rate. If rates drop again next week as expected by 0.5% - your tracker will be 3.75%. The variable rates are probably  not going to keep dropping in line with any ECB rates - but your tracker will. When rates rise the variable rates may well start to rise faster. It's a hard one to call - because the tracker margin of 2.25% is not a great one. If it was me I would probably go for the 3.25 variable if there is no switching fees involved.


----------



## mary123 (24 Feb 2009)

Can you still get a tracker mortgage. I thought these were gone. I am thinking of changing. I have a mortgage with PerTSB (4.29%) and also a one plan (5.99%) top up mortgage both of which are fixed rates. Where can i get a tracker rate?


----------



## irishlinks (24 Feb 2009)

New customers can't get trackers anywhere in Ireland at the moment.


----------



## Senna (24 Feb 2009)

depending on your circumstances and if you can make repayments comfortably on both rates, then i would go with the tracker.  Rate cuts will be guarantee to be passed on and i think banks will soon stop passing on full rate  cuts, especially if rates continue to drop after march.  If/when rates start to increase you can always jump to fixed or variable.  If you turn the tracker down now you wont get it again.  The next 6 months/year will see where rates are going and they may well stay at the same low level for awhile.  At that time you can choose which is better tracker or variable.


----------



## mary123 (25 Feb 2009)

Sorry. i'm confused. I haven't gone about getting a tracker just yet as i thought i wouldn't be able. Am i correct so in thinking existing mortgage holders can get a tracker mortgage? If so, would it be with the bank you are currently with? Im with Perm TSB at the moment on a fixed rate with  a fixed rate one plan top up mortgage also. Or would another bank offer me a tracker to move?


----------



## PaddyW (25 Feb 2009)

Check your loan agreement Mary. It should state in the terms and conditions what type of mortgage you will move on to when your fixed term is up.


----------



## rooneys (25 Feb 2009)

Thanks folks. The banks will offer a tracker rate to existing customers but you will not receive a tracker rate when you switch banks.
There is switching fees involved in moving to AIB's variable rate but Halifax will pay the legal fees for you (1000 Euro).


----------



## PaddyW (25 Feb 2009)

If you're moving from Halifax to AIB, Halifax won't pay, as you are leaving them. AIB give legal fee costs, so they'll pay if you are moving to them.


----------



## rooneys (25 Feb 2009)

Nope I'm thinking of moving from PTSB to either Halifax or AIB.
Halifax will pay the legal fees if I move from PTSB, AIB won't .


----------



## PaddyW (25 Feb 2009)

Have AIB stopped the legal fees then? Must have been a recent thing.


----------



## Canny39 (25 Feb 2009)

Regarding reducing the term of your morgage why don't you have a look at this website, I've used and recommended it before and think it's great. You can see what effect many different decisions will have on your morgage such as the effect of making once off lump sum payments or regular overpayments. 
http://www.drcalculator.com/mortgage/ie/


----------

