Keep tracker or not?

[Slim Shady]

Hi,

I am switching my mortgage and can hold onto my current tracker which is 1.75% (which originally was an 0.75% tracker started in 2006 and was increased by 1% to 1.75%when I moved from my first house) provided that I agree to a 1% further increase bringing the tracker up to 2.75% for the life of the mortgage?

The alternative being offered is 2.3% for 3 5 years and then I go variable or negotiate a fixed rate.

I am borrowing about 450, with 390 relating to the tracker rates.

I would just like to get some info as to what is the best thing to do.

Cheers
S

 

[Brendan Burgess]

Hi Slim

Very hard to know.

The best variable rate in the market at the moment is the AIB for LTV <60% which is 2.75% or ICS <60% 2.7%

So if you had to choose between one of these and an Ulster Bank tracker of ECB +2.75% , you should definitely take the tracker.

The alternative being offered is 2.3% for 3 5 years

I presume that is the 2 year fixed rate that they are offering you?

But should you fix at 2.3% and give up the right to a lifetime tracker?

How many years are left on the tracker element of the loan?

Brendan

 

[Slim Shady]

Hi Brendan,

24 years on the tracker
the 2.3% fixed is for 5 years but revert to variable or whatever the fixed offer are at that time afterwards.

If I fix I do give up the right to a lifetime tracker - this really is the question I was looking for assistance with

 

[Brendan Burgess]

It's really hard to know.

A tracker of ECB +2.75% is not very valuable today.

But it's possible that over the 19 years after the fixed rate would have ended, ECB rates will be lowish but the margins on mortgages will rise due to increased capital requirements.

I really don't know.

Brendan

 

[Slim Shady]

Cheers Brendan