# RTE's Consumer Show - tracker mortgages to go next year?



## HMC

Hello,

My mother told me an item on the Consumer Show last night mentioned that all those with tracker mortgages will be forced to give them up next year.  Is this correct?

Did anyone see the programme?

Thanks
HMC


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## aristotle

This is not true so no need to worry. She must have picked up something wrong as you cannot be forced off your mortgage agreement unless you have broken some serious terms & conditions of it.


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## fobs

no this was not said. Eddie Hobbs claimed that rates will start to go up sharply from next year and so people may be forced to go to fixed rates to avoid this. Not sure how right he is and I will stick with my tracker for the forseeable!


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## cloughy

if tracker rates go up, and you opt to fixed then maybe the bank can deem this to be a breakage in the original agreement, and hence loose tracker after the fixed period, as you can't have your cake and eat it. Was differrent where banks allowed to fix and revert to tracker, but I can bet they will tighten up their wording for all new fixed requests.


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## DeeFox

Eddie Hobbs said that interest rates would increase late next year and that by 2012 it would make more sense to fix your mortgage - thus people would give up their trackers.


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## NorfBank

Oh to have Eddies crystal ball for just a few minutes


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## Teenoso

I think Eddie is wrong to say people on trackers should consider fixing because of pending interest rate hikes. Remember your tracker is for the lifetime of your mortgage, fixing for 3,5,10 in the short term could save you money(if interest rates were 7-8%) but where does that leave you after the fix term ends, on the standard variable rate, paying through your teeth. Keep your tracker sleep tight knowing no matter what rate the ECB sets your bank will be losing money on your tracker


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## Protocol

Example: you have an ECB tracker mortgage with a 0.75% margin.  You pay 1.75% now.

Current SVRs are in the range 3.75-4.50 roughly

Current fixed rates are in the range 3.50-4.50 roughly.

Say some econ growth and a bit higher inf returns across the EMU, and the ECB act to raise rates.

At ECB = 3%, you will pay 3.75%, the SVRs might be 5.5%+ approx, and the fixed rates might be 5-6%.

You should still be saving on the tracker.

At ECB = 4%, you pay 4.75%, fixed rates might be available for 5-6%.

I think any tracker with a 0.5-1.00% margin is very hard to beat.


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## DB74

Didn't see the programme but maybe Eddie was talking about people on Variable (not tracker) rates


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## Paulk

Do not forget that the ECB indicated recently that it was unlikely to increase its rate until 2012 at the earliest.

I'm sure that when the ECB rate does start to increase that it will be a slow process, as the Eurozone is still very fragile.


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## Howitzer

Paulk said:


> Do not forget that the ECB indicated recently that it was unlikely to increase its rate until 2012 at the earliest.
> 
> I'm sure that when the ECB rate does start to increase that it will be a slow process, as the Eurozone is still very fragile.


Do you have a link to that? That isn't my understanding of the ECB's current position.


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## Goggles

I can't post the url but there was an article on 3rd Sept in the Irish Independant that reported what Paulk mentions above - title "Mortgage divide" if you google it you will find it


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## aristotle

The ECB never state when rates will increase. In their press conferences they give updates and use certain words and phrases that the press then interpret. No one knows when rates will increase although it is generally accepted that it will be well into 2011.

It all depends on economic recovery, inflation etc.


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## Paulk

Howitzer said:


> Do you have a link to that? That isn't my understanding of the ECB's current position.



http://www.independent.ie/business/p...e-2322925.html


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## Paulk

Eddie Hobbs contradicted himself on the Consumer Show. He started off by saying that tracker mortgages would save customers around €100,000 over the term of the mortgage. Surely, this has to be welcomed.

However, he then went on to say that mortgage rates will rise dramatically over the next year. Consequently, he feels that it is advisable for tracker customers to fix sooner rather than later. He said that once the ECB rate starts to increase, the cost of fixing will rise sharply. 

However, I'm certainly not going to let go of my tracker, as I believe it will always be cheaper than going for a fixed option.


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## VOR

Protocol said:


> I think any tracker with a 0.5-1.00% margin is very hard to beat.





Paulk said:


> However, he then went on to say that mortgage rates will rise dramatically over the next year. Consequently, he feels that it is advisable for tracker customers to fix sooner rather than later. He said that once the ECB rate starts to increase, the cost of fixing will rise sharply.
> 
> However, I'm certainly not going to let go of my tracker, as I believe it will always be cheaper than going for a fixed option.



I am with you guys all the way.
I am amazed at Eddie's stance. It is a short term view. If I am in year 3 of a 35 year tracker, why would I move to a 5 year fixed? Will I not end up paying more from years 8-35?


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## Howitzer

VOR said:


> I am with you guys all the way.
> I am amazed at Eddie's stance. It is a short term view. If I am in year 3 of a 35 year tracker, why would I move to a 5 year fixed? Will I not end up paying more from years 8-35?


It's worse than that. You'll pay more from now until ECB rates exceed your fixed rate. That could be any length of time away.

And then you'll be paying more for the duration of the product.

Unless Eddie forsees some sort of Weimar Republic hyper-inflation scenario occuring within the next 18 months this is a no brainer.

For what it's worth I remember seeing Karl Deeter (Mortageg Broker) on some program on TV3 about 15 months ago explaining how he was trading in his Tracker for a Fixed mortgage then. Just cos someone wears a suit and appears on TV doesn't make them right.


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## Paulk

Howitzer said:


> Unless Eddie forsees some sort of Weimar Republic hyper-inflation scenario occuring within the next 18 months this is a no brainer.
> 
> For what it's worth I remember seeing Karl Deeter (Mortageg Broker) on some program on TV3 about 15 months ago explaining how he was trading in his Tracker for a Fixed mortgage then. Just cos someone wears a suit and appears on TV doesn't make them right.



This is pretty much what Eddie was implying ie that inflation will become a major issue sometime next year. As a result, the ECB rate will rise sharply and the cost of fixing will go up and up. He said that it now costs around 5% to fix but this figure will be a lot higher next year. Thus, it makes sense for people to fix earlier in order to save money.

However, I still disagree with what he said. I can't see the ECB rate inreasing by 5% over the next few years.


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## MurrayDub

Cant be true. You can actually watch the programme on RTE player so have a look.


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## DB74

Had a look at the programme this morning and that is what he said. His opinion was that people should come off trackers as early as next year to go onto a fixed rate. The clip is at the very end.

They actually played the closing music and rolled the credits while he was talking about it which I thought was incredible to say the least, given that this item would be more important to most people than any other item on the show.

On another off-topic note, the RTE player nothing short of an absolute disgrace IMO. You can't watch 30 secs of anything without it stalling. Whatever about stalling/buffering when watching a live programme (eg World Cup etc) there is no excuse for it while watching a programme that has already been recorded. Why oh why do we have to put up with shoddiness everywhere we turn in this country.


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## aristotle

DB74 said:


> On another off-topic note, the RTE player nothing short of an absolute disgrace IMO. You can't watch 30 secs of anything without it stalling. Whatever about stalling/buffering when watching a live programme (eg World Cup etc) there is no excuse for it while watching a programme that has already been recorded. Why oh why do we have to put up with shoddiness everywhere we turn in this country.


 
Its likely to be down to your broadband rather than RTE. I find the RTE player great and watched the whole all-ireland football game yesterday on it and many repeat programs.

You can check your broadband speed here ... [broken link removed]


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## tallpaul

aristotle said:


> Its likely to be down to your broadband rather than RTE. I find the RTE player great and watched the whole all-ireland football game yesterday on it and many repeat programs.
> 
> You can check your broadband speed here ... [broken link removed]


 

Agreed. You need to vent your spleen at your broadband provider not RTE in this instance.

RTE Player always works flawlessly for me, recorded or live media streaming. Even the Katie Taylor fight on Saturday evening, which I assume would have been watched by many people, streamed stutter-free for me.


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## DB74

Fair enough. I don't have any issues with other sites though and I can never watch RTE player comfortably, either in work or at home. The World Cup was atrocious on RTE even though I could watch a different HD stream perfectly with no stuttering at all AT THE SAME TIME!

Download Speed is 3505 kbps
Upload Speed is 325 kbps
Ping Test 63ms

Getting off-topic here though so I'll post this post in the relevant section

http://www.askaboutmoney.com/showthread.php?t=143983&highlight=RTE+player


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## ajapale

DB74 said:


> Getting off-topic here though so I'll post this post in the relevant section:
> 
> http://www.askaboutmoney.com/showthread.php?t=143983&highlight=RTE+player



Yes, please keep this thread to discuss the Consumer Programme and the rumour that tracker mortgages may be withdrawn next year.


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## annR

DB74 said:


> Had a look at the programme this morning and that is what he said. His opinion was that people should come off trackers as early as next year to go onto a fixed rate. The clip is at the very end.
> 
> They actually played the closing music and rolled the credits while he was talking about it which I thought was incredible to say the least, given that this item would be more important to most people than any other item on the show.



Yes I heard him say that and I thought it was a bit strange to say on a consumer show to come off your tracker mortgage and go fixed.  Perhaps it might apply to people who for some reason know that they will definitely be fixing at some point but otherwise it didn't make any sense to me.


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