# Opting for tracker for first time - anything I should know or be aware of?



## Caveat (19 Aug 2009)

Hi

AFAIK it's all very straightforward but thought I would ask.

Coming off fixed of 5.55% next month with PTSB and have been told over the phone that I can opt for a tracker at ECB + 2.25%.  

A bit of a no-brainer in the current climate.  Apart from the obvious risk of base rate increases is there anything else I should know?

I'm assuming that we can opt out on an at least yearly basis for example?

I will be talking to the lender of course and am expecting details of options by post but this is all new to me and just wanted some feedback first.

TIA


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## csirl (19 Aug 2009)

Is the rate accurate? 2.25% in total i.e. ECB + 1.5% would be more normal for a tracker. ECB + 2.25% seems very high.

In theory a tracker mortgage should be cheaper than any other mortgage as the bank does not have to pay a risk premium as it is not taking the interest rate movement risk. Generally speaking, it is expensive to get someone to take a financial risk on your behalf.


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## Caveat (19 Aug 2009)

Thanks, yes AFAIK rate is accurate and no, it's not a good deal relatively speaking - but it is a good deal for us, relatively speaking.

I'm not sure if the expense and bother of switching lenders is worth it.


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## pjmn (19 Aug 2009)

Have a look at your original paperwork when you took the fixed rate mortgage – that may have specified if you could move on to a tracker and at what price, if it stated ECB + 2.25% then fair enough, it’s probably not a bad deal overall, but if the original paperwork suggests an ECB rate with a lesser margin, then you have cause for complaint.


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## guinang (19 Aug 2009)

csirl said:


> Is the rate accurate? 2.25% in total i.e. ECB + 1.5% would be more normal for a tracker. ECB + 2.25% seems very high.
> 
> In theory a tracker mortgage should be cheaper than any other mortgage as the bank does not have to pay a risk premium as it is not taking the interest rate movement risk. Generally speaking, it is expensive to get someone to take a financial risk on your behalf.


 
PTSB offer the same tracker rate to anyone coming off a previous rate (1 year new business tracker), and were promised a tracker rate in to the future.  
I considered coming off this tracker since variable was cheaper at the time (3.25 tracker vs 3.2 variable).  The difference wasn't much, but made me think that tracker wasn't worth it.  PTSB decided to raise variable rate by .5% last month, so glad I stuck with my tracker.


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## Caveat (19 Aug 2009)

Thanks all - can anyone expand on this though?



Caveat said:


> I'm assuming that we can opt out on an at least yearly basis for example?


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## NorfBank (19 Aug 2009)

On a variable or tracker you can moved to a fixed at any time. Some lenders have started introducing an admin charge for this though. I don't think PTSB do but might as well check before signing up.

If you mean can you opt out for a year and then revert to a tracker then no.


www.moneybackmortgages.ie


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## Caveat (19 Aug 2009)

NorfBank said:


> On a variable or tracker you can moved to a fixed at any time. Some lenders have started introducing an admin charge for this though. I don't think PTSB do but might as well check before signing up.


 
Sounds good - thanks.


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## john m (20 Aug 2009)

I'm in the same boat and yesterday the Perm TSB are putting us on a tracker which is 0.8% + ECB, eequating to 1.8%. Sounds too good to be true when they said the variable is 3.55%. Why would there be a difference in tracker rates? Does it depend on mortage value / term etc?


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## NorfBank (20 Aug 2009)

Don't look a gift horse in the mouth!

You probably took out the fixed rate a while back when PTSB had everyone at a certain loan to value and over a certain mortgage amount reverting to low trackers at the end of the fixed rate period. People who took out recent fixed rates in the last 1 to 2 years did not get such an attractive tracker rate as lenders began to realise the folly of their ways.

[broken link removed]


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## peelaaa (20 Aug 2009)

Caveat said:


> Hi
> 
> AFAIK it's all very straightforward but thought I would ask.
> 
> ...


 
I would try and get mortgage with another lender and stay away from PTSB. I am stuck on there tracker +2.25 so paying 3.25 while the variable rate in other banks is a lot less. I can't move it due to negative equity.


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## deeheg (20 Aug 2009)

you lucky things most banks are not offering trackers so grab it


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