# ECB + 50BP ( Best Rate Ever )



## Codogly (22 Mar 2019)

Just looking for views of AAM on the question of : " Will a situation ever arise where paying off your ECB + 50BP Tracker Mortgage makes sense ? "
My own belief is that it is highly unlikely following the usual economic principles that it will ever make sense to pay off such a low cost loan ... any rise in ECB Base Rate is likely to be accompanied by deposit rate / wage and possible asset value rises.
I suspect there are a lot of tracker mortgage holders who have built up a substantial cash deposit and who could clear or pay down the tracker mortgage but why would they when even at current brutal deposit rates can earn more on deposit than 0.50%

Am I missing any glaring issues ?


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## moneymakeover (22 Mar 2019)

Seems obvious


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## odyssey06 (22 Mar 2019)

Well remember a lot of tracker holders aren't on +50BP, some are on +150BP but your point is probably still valid.


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## Gordon Gekko (23 Mar 2019)

It only makes sense not to repay if you’re earning more than 0.5% after tax from the cash. So if it’s on deposit, that won’t be the case.

Even with a rental property where the effective interest cost might only be circa 0.25%, you still wouldn’t get that net of DIRT by having it on deposit.

Plus there’s the convenience and comfort factor of not having debt. If I’d €500k in cash and no debt other than €100k at 0.5%, I think I’d repay it anyway.


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## galway_blow_in (23 Mar 2019)

Gordon Gekko said:


> It only makes sense not to repay if you’re earning more than 0.5% after tax from the cash. So if it’s on deposit, that won’t be the case.
> 
> Even with a rental property where the effective interest cost might only be circa 0.25%, you still wouldn’t get that net of DIRT by having it on deposit.
> 
> Plus there’s the convenience and comfort factor of not having debt. If I’d €500k in cash and no debt other than €100k at 0.5%, I think I’d repay it anyway.



Paying off rock bottom loans is a waste , you could do numerous things with the money instead, I understand the emotional comfort of owing nothing to nobody but its still a waste


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