‘Tracker’ mortgages return 17 years after the Celtic Tiger
A “tracker-type” mortgage is coming back to the Irish market, more than 17 years after banks here stopped offering them.
m.independent.ie
Avant Launch Euribor Tracker
- Thread starter Lightning
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m.independent.ie
Be interesting to see if the so called "pillar banks" attempt to compete given the damage that ensued from their previous involvement.
Damage both to their reputation and significantly more importantly, damage to their customers.
If they do I'd say the T&C s would make for interesting reading.
Great to see the return if the tracker though.
Damage both to their reputation and significantly more importantly, damage to their customers.
If they do I'd say the T&C s would make for interesting reading.
Great to see the return if the tracker though.
Brendan Burgess
Founder
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So for an LTV <80%, the rate today would be euriobor 2.4% + 0.9% = 3.3%
The AIB variable rate is 3.95%
ptsb variable is 4.5%
The cheapest rate in the market is AIB Green 3 years at 3.1%.
So the Avant rate is clearly a Best Buy.
Brendan
The AIB variable rate is 3.95%
ptsb variable is 4.5%
The cheapest rate in the market is AIB Green 3 years at 3.1%.
So the Avant rate is clearly a Best Buy.
Brendan
Dr Strangelove
Registered User
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These are common in Spain AFAIK where Avant’s owner is.
Is there any significance in the fact that trackers up to now tracked ECB (MRO?) rates whereas this uses a Euribor rate? It's the latter less volatile or something?
www.ecb.europa.eu
www.euribor-rates.eu
Official interest rates
The three official interest rates the ECB sets every six weeks as part of its monetary policy to steer the provision of liquidity to the banking sector.
Euribor rates - all information on Euribor
Euribor rates: information, current rates and charts on the most important reference rate in the European money market
www.euribor-rates.eu
Hello,
The price promise, in terms of the fixed lending margin, is the big win for the consumer.
In times past, the big mistake that the Banks made wasn't offering the Tracker mortgage product itself, but offering it at too low a margin (they didn't price them correctly for their risk).
The fact that Avant have decided to price it off the (average) previous 12mth Euribor rate is interesting - it affords a level of stability for both consumer and lender.
How the Bank funds these loans is somewhat irrelevant - banks have traditionally matched long term lending, with a mix of short term deposits, interbank funding and retained profits - that won't really change, unless there's very cheap money on offer from the ECB, from time to time.
The price promise, in terms of the fixed lending margin, is the big win for the consumer.
In times past, the big mistake that the Banks made wasn't offering the Tracker mortgage product itself, but offering it at too low a margin (they didn't price them correctly for their risk).
The fact that Avant have decided to price it off the (average) previous 12mth Euribor rate is interesting - it affords a level of stability for both consumer and lender.
How the Bank funds these loans is somewhat irrelevant - banks have traditionally matched long term lending, with a mix of short term deposits, interbank funding and retained profits - that won't really change, unless there's very cheap money on offer from the ECB, from time to time.
Dr Strangelove
Registered User
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- 1,961
Both risk of default by customer and also the assumption that they could fund themselves at the MRO in perpetuity.
I had a colleague years ago who had a tracker with a 57bps margin. That’s the lowest I ever heard of.
There was even lower.
Lowest tracker margin known?
Hi, I'm more just curious on this one, but does anyone know what the lowest tracker margin in Ireland ever was? I always thought 0.99% was the standard margin that everyone got years ago, but I've heard of seem even lower, numbers like ECB + 0.65% or along those lines... Thanks.
www.askaboutmoney.com
The pricing transparency is very welcome indeed, compared to the one-sided, variable rate policies in operation.
So it's priced off the off the average, previous 12mth Euribor rate at drawdown and is effectively a rolling one year fixed rate with the benefits of a variable rate mortgage. There is good protection from interest rate shocks in that and will, somewhat, smooth the path for mortgage customers in a rising rate environment. I think that's a good product.
I had an NIB / Danske LTV mortgage at ECB rate +0.50%.