# Tracker v Fixed rate



## dazeconfuse (9 Apr 2010)

Just coming to the end of a three-year fixed rate, our default position (agreed at the time of fixing) now is to go onto a tracker at 1.1% above ECB

Is this the best thing to stick with? I know trackers are talked about as gold dust these days, but having been so badly burned by fixing when we did, just want to be sure we're making the right choice this time. Thanks.


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## jaykayphd (9 Apr 2010)

I don't understand how this question continually arises on here! 

ECB rate currently stands at 1%. Therefore your tracker rate will be 2.1% guaranteed until the ECB raise their rates and obviously your tracker rate will rise accordingly to track the ECB rate but will not exceed the 1.1% differential. 

Standard variable rates are variable and can be changed whenever the bank decides it still needs more money.

Looking at [broken link removed]for example they have variable rates ranging from 2.59 - 2.99% and fixed rates ranging from 3.25 - 4.25 % depending on LTV and years fixed respectively. 

All far less then your tracker of 2.1% and all rates that will rise along with the ECB rate. 

And with AIB supposedly destined to raise their rates again before year end and BOI to raise their rates by next week, tracker if available is the only way to go.


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## dazeconfuse (9 Apr 2010)

Thanks for the response, I know it's a pretty basic question, it's just having been so badly burned by making the decision to fix, I was wondering if there might be some snag I was missing. Thanks.


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## Paulk (9 Apr 2010)

Dazeconfuse, I am in the same boat as you. I fixed for 3 years at 5.45% so I also feel that I got burned badly, despite reassurances from broker at the time etc. However, nobody could have predicted just how drastically things would change.

Like you, I'm going onto a tracker shortly -mine is 1.25% above ECB.

I realise that this is purely speculation but is the ECB unlikely to raise interest rates until next year? Or is it possible they could raise this year?


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## Petal (10 Apr 2010)

I took out a tracker and then fixed when rates started to rise. I was in a fixed rate for 3 years at 4.85. When I came out of the fixed rate, I went back onto a tracker and THANK God for that. Am now on 2.1 (as mentioned by jaykayphd) and I'm not sure I'm going to be in a hurry to fix again. I think at the end of the day, tracker these days is the best thing to be on and there is no snag or anything. Just be careful when you get you letter from your lender telling you "your fixed rate has expired and please select one of the listed options"...  My bank conveniently didn't offer me the tracker although specified in my mortgage agreement. So I wrote back to them and said, thanks but no thanks I want what was agreed originally. They'll try anything these days to avoid you from going back onto a tracker as they're losing money on tracker rates. So beware!


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## jaykayphd (10 Apr 2010)

Of course its possible they could raise the rates this year, it probably all depends on how well the German and French economy start to perform versus the millstone that is the Greek economy. 

But what are your choices? Take the tracker,fixed or variable. Variable is a no no so that just leaves you two options.

And surely the only option is a tracker if offered, especially so considering the banks are supposedly losing money on these products!

Assuming the ECB rate remains unchanged for the remainder of the year your interest rate would be 2.25% for 8 months versus 8 months at a 4 yr fixed rate of 3.95% with AIB. Over those 4 years the ECB will have to riase thier rate by 1.75% which obvioulsy is possible. Even as the ECB rate edges up you are still on to a winner. Sure after you come out of the fixed rate in say 4 years time I'd imagine you wouldnt have the tracker product ever offered again. Therefore in my opinion tracker is the only way to go if you have the option. 

Do a search on here there are loads of threads on the same subject.


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## Paulk (10 Apr 2010)

Good points JayKay. 

It did occur to me that the financial crisis in Greece may delay the ECB in raising the interest rate...fingers crossed!


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## ipxl (10 Apr 2010)

I know that most if not all of the banks here ceased to do tracker mortgages since late last year (true?).

Are there any instances currently where someone who wishes to extend their current mortgage (example scenario - purchase of a site in advance of selling  their existing home) where the institutions might allow the customer to retain the right to have a tracker mortgage ?
My guess was that any renegotation of terms on an existing mortgage would trigger the lending bank to drop the terms of a tracker mortgage in favour of a standard variable rate mortgage at higher rates, etc.


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