BOI Homeloan Variable vs Tracker Variable

[daithi28]

Can somebody advise please?

I received a letter from BOI today saying that my 2 year variable discounted rate is coming to an end and now I must choose between the following:

Homeloan Variable Rate = 5.440%
Tracker Variabe Rate ECB + 1.25% = 5.250%

My current mortgage setup is 28 years remaining with a LTV of 62-65%

BOI does not state the difference between Homeloan or the Tracker rate, neither does their website and a Google search hasn't returned anything useful.

At 1st glance I'd say pick the lower rate (obviously), but am I missing something? i.e. why would you deliberately pick the higher interest rate?

The difference in monthly payments between the two rates is €19.06 (projected).

Your help would be greatly appreciated.

 

[irishlinks]

The tracker mortgage will always be the ECB (European Central Bank) rate plus 1.25%/ The other variable mortgage can be variied by the bank as and when they decide. At the moment all the lenders tracker mortgages are lower then their standard variable rates. This may not always be the case - but I would be very surprised if it wasn't. I would go for the tracker.
Of course you could shop around - especially if your mortgage is less than 80% of the value of your house - you could get better rates elsewhere possibly.