BoI to withdraw tracker mortgages

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damson

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From today's Irish Times: "Bank of Ireland is to withdraw its tracker mortgages from Friday."

Anyone (brokers?) know any more about this? There's nothing on their website yet. I'm particularly interested in whether they will just cease offering trackers to new clients, or whether they will try to change existing trackers to standard variable or fixed rates.
 
It means that they are not making trackers available to new customers.

They cannot move existing customers with trackers over to standard variable or fixed without their agreement. Banks have been losing money on tracker mortgages for over an year now and would desperately love to get existing customers off them.

From what I've heard, they have been offering very generous 2 -5 yr fixed rates to these customers to tempt them away from their trackers.
 
Unless your finances were in such a state that moving to a temporary discounted rate was the only way to get you out of a hole I really can’t see why anyone would want to give up their tracker.
 
makes sense, there's no logic in offering trackers any more (unless you link them to the interbank rate instead of the ECB rate)
 
Hi, just wondering if anyone could explain in simple English why the banks are losing money on tracker mortgages. We have a tracker with NIB +0.5% over ECB rate and really don't understand why the banks aren't happy with them. Are they not making 0.5% on them?
 
Hurling Fan said:
Hi, just wondering if anyone could explain in simple English why the banks are losing money on tracker mortgages. We have a tracker with NIB +0.5% over ECB rate and really don't understand why the banks aren't happy with them. Are they not making 0.5% on them?
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In a nutshell the banks are paying more interest to borrow the money than you are paying them back. The interbank interest rate is alot higher than the ECB rate.
 
Just to add some meat to the previous post but still keeping it quite simple.
The benchmark banks use to finance their variable and tracker mortgages is 3 month Euribor. Historically this used to trade very close to the ECB rate but since the credit crunch and the lack of trust in the banking market the Euribor rate has shot up as banks charge each other more for lending. 3 month Euribor was trading today at around 5.4%.
NIB are lending at ECB + 0.5% (4.25%) but are borrowing this in the money markets at a much higher rate (5.4%) and are thus losing money on these mortgages.
 
What is the situation with people who have tracker mortgages with BOI say for a set period e.g. 3 years, when this period is up is it open season again ? even though they are not a new customer, will the BOI still offer a tracker I wonder, though it might be a higher rate when the agreed period is out ? Or is it a case of taking the best of whats on offer or shopping around the banks for a better deal?
 
Trackers are for the term of the mortgage.
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Indeed, sorry, so it's a matter of negotiating a new rate ECB+?? (one that's prob not gonna be to my liking one imagines :rolleyes:)
 
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Havealaugh said:
Indeed, sorry, so it's a matter of negotiating a new rate ECB+?? (one that's prob not gonna be to my liking one imagines :rolleyes:)
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Are you sure there's a term attached to your tracker rate? I too have a tracker with BOI, but as far as I'm aware, it will stay at the same percentage above ECB for the life of the mortgage. Hmm. Must double-check that, now that you've got me wondering ...
 
Celt,
I think you're getting term (years left to run) and margin (+ 0.75%) mixed up?
 
Celtwytch said:
Are you sure there's a term attached to your tracker rate? I too have a tracker with BOI, but as far as I'm aware, it will stay at the same percentage above ECB for the life of the mortgage. Hmm. Must double-check that, now that you've got me wondering ...
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Purely for info only as god knows how old it is but all BOI tracker rates mention the margin rate is for the life of the loan : [broken link removed]
 
MikeySligo said:
I could be wrong but I dont think BOI done the discounted tracker. AFAIK on PTSB had these??
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BOI used to offer discounted trackers but as far as I remember these were over a year ago and were just discounted for one year.
For people coming off discounted trackers it's a case of checking the T & Cs of the loan offer.
 
NorfBank said:
Celt,
I think you're getting term (years left to run) and margin (+ 0.75%) mixed up?
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No, I'm not. I was referring to Havealaugh's post regarding having a tracker with a particular margin over a set period of time. I substituted the word term for period, which may be causing confusion.
 
NorfBank said:
BOI used to offer discounted trackers but as far as I remember these were over a year ago and were just discounted for one year.
For people coming off discounted trackers it's a case of checking the T & Cs of the loan offer.
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Did they really. BOI will be happy enough there so.
Thankfully ours is Ulster Bank tracker so unless they start talking about revaluations if the house prices keep on falling.....

***Just copped our LTV isn't relevant anyway.
 
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