20 Year Fixed Term/Replacing Tracker

We're now thinking about holding the tracker and upping our monthly repayment by €100. Take on this mortgage for the first time lol

We've changed our mind again. Fixing for 20 years with finance ireland at 2.5%, 1500 cash back.

What are the options for accelerated repayment of such a long term fixed loan?

@Rossies Why not consider Avant's 2.25% rate fixed for 15 years? If you manage to make some overpayments in the coming years while keeping your monthly repayment the same, your mortgage will be cleared in less than 20 years.

That would mean there will only be a few years after the end of the fixed rate before the mortgage is cleared, and the interest payments will be really small at that point away, so rate rises wouldn't matter so much.

Rossies said:

We've changed our mind again. Fixing for 20 years with finance ireland at 2.5%, 1500 cash back.

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€837 a month on two PS salaries is pretty manageable. You will never get a 1.25pp tracker ever again once you fix.

I think you should leave it where it is. I think it's very possible that ECB+1.25pp will stay below 2.5% on average for the term of your mortgage.

You can always fix at a future point. But once you give up a tracker it's gone forever.

Rossies said:

Two civil servants in permanent pensionable jobs.
When we started on the tracker in 2007 repayments were 1300 per month. Now they are 837 which is manageable.
We fear the repayments going up again with interest rate increases.
I wouldn't consider myself overly Conservative
We will only have one child for college in 10 years.

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Why the fear? And from everything you have said, you are being overly conservative. It seems like you are making an uninformed decision. It is important to factor in the rest of your financials when making this decision

€1300/m 15 years ago was probably a much bigger part of your take home pay. I'm assuming your salaries have increased since then and you have benefitted from the tracker so your payment has gone down and now the €837 is a much smaller percentage of your take home pay. Is that correct?

You are both PS workers so your pensions should be taken care of and you are effectively in guaranteed employment with no risk of a loss of income. You don't need to protect yourself by willingly paying an extra 1.25% interest

What is your income level today? If your loan-to-income (LTI) is less than 2 then you should stay on the tracker. If you had financial trouble and suffered drops in income/unemployment and your LTI was still high today (>3), then there would be some argument in fixing for a longer term for security

And finally, just because you took out a 35 year mortgage, it does not mean you need to use all 35 years. The best way to save money and protect yourself from interest rate increases is to pay off your mortgage sooner. Do you have other savings currently doing nothing? i.e. on deposit, set aside for education fund etc. And how much are you saving regularly from your monthly income?

_OkGo_ said:

Why the fear? And from everything you have said, you are being overly conservative.

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Exactly what I said earlier too...

It sounds like Rossies has already made the switch.
He may be right in the face of unknown future factors such as the war in the Ukraine, inflation etc.
Personally I would have held onto the tracker and overpayed it as much as possible.

Sorry, I think you are utterly crazy giving up a 1.25% tracker. Fixed rates are going nowhere for the moment. Ukraine probably elongates that. Remember the media love to scaremonger people.

If you added €100 extra to your mortgage payment, then in 5 years time the balance would be under €130,000.

If interest rates rose to 2%, giving you a 3.25% rate, payments then would be €920 / month.

Push yourselves and add €150 per month immediately to the tracker mortgage payment and watch the years fall off the end date of the mortgage. Your 20 years would become just over 16 years.



But don't give up a tracker.

Giving up that tracker rate was not the right play there at all. Rates won't move for quite a while yet and his balance would've come down. Even 2.5% was higher than what's available elsewhere. Not a good decision imo

I'd like to thank everyone for reading my post and giving their opinions. The final outcome was that we pulled back from re mortgaging and subsequently fixing for the remaining 20 years. We're keeping the tracker and have applied to mortgage provider to increase repayments by €100 per month.

Rossies said:

The final outcome was that we pulled back from re mortgaging and subsequently fixing for the remaining 20 years.

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Great call.

Keep a close eye on rates. If they are rising and rising to the point where you want the certainty of a fixed rate then do it then.

But for now I think you are better off holding on to the tracker as once it's gone it's gone.