BoI to withdraw tracker mortgages

theoneill said:
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.
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You would be surprised how many financially uneducated people are out there!

Unless there is something in the small print about the bank reserving the right to switch over to tracking the Euribor rate, they are legally obliged to track the ECB rate. I havn't heard of any bank doing this and since they are losing a lot of money on these ECB trackers (especially on prior 2007 mortgages), they must have neglected to put this in their Terms & Conditions.

The only avenue they have to reduce their losses is to insist on house revaluations for LTV tracker mortgages.
 
Go through your mortgage agreement with a fine-tooth comb to make sure there's no nasty surprises in there!
 
polaris said:
You would be surprised how many financially uneducated people are out there!

Unless there is something in the small print about the bank reserving the right to switch over to tracking the Euribor rate, they are legally obliged to track the ECB rate. I havn't heard of any bank doing this and since they are losing a lot of money on these ECB trackers (especially on prior 2007 mortgages), they must have neglected to put this in their Terms & Conditions.

The only avenue they have to reduce their losses is to insist on house revaluations for LTV tracker mortgages.
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EBS now have in the T&C, the right to switch to tracking the Euribor rate. if it goes over the ECB rate.
 
Shorty69664 said:
EBS now have in the T&C, the right to switch to tracking the Euribor rate. if it goes over the ECB rate.
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Is this really the case?

How much higher is the Euibor rate? I see it listed as 4.629% at 1 week, 5.489% for a year, which is the applicable one?

Is it tied to the ECB rate in any way ie, ECB+0.5%?

Is EBS's rate Euibor + same percentage above ECB or just the rate itself?

How come they have not switched to this already, would they fear loosing customers?

Was planning on getting a mortgage through EBS as they are one of the few places left offering tracker mortgages.

Would be very wary of signing up for a variable rate, I'm sure banks are likely to keep raising this to try and make up for their recent losses so the tracker mortgage seemed the only appealing option...

Any advice on the above would be much appreciated.
 
Taken from my EBS loan offer:

"However, if we determine that the 1 month Euribor rate is more than 0.25% above the ECB rate for a period of greater than 30 days, then at our sole discretion we may subsitiute the 1 month Euribor rate for the ECB rate."
"If we determine that the 1 month Euribor rate is less than 0.25% above the ECB rate for a period of greater than 30 days, the tracker interest rate will revert back to the ECB rate."
 
Thanks for that. The 1 month rate is 5.118% at the moment I believe, so it's about 0.3 above ECB?

Is it tied to the ECB rate in any way ie, ECB+0.5%? I'm guessing its going to be related?

Have you gone ahead with your mortgage with this condition, and do you see it as a major problem?

Tracker mortgages still seem the best option to me, the fact the banks are withdrawing them would seem to suggest they agree:)

Thanks
 
Could be a problem... Very hard to know.
At the moment with the banks not lending to each other, the Euribor is very high.
ECB = 3.75 %
Euribor = 5.11%

I have signed the loan aggreement but not drawn down on it yet.
It's for a self build.....
 
Sorry, got confused with ECB rate.

That is a big increase alright, would be interested to see historically how the 2 have compared.

Am facing a difficult decision regarding mortgage, thinking of buying a 2 bed apt in the city centre through Docklands affordable housing, though it seems a very bad time to be buying/getting a mortgage.

Like I said I'm very wary of signing up for any mortgage product that the Irish banks have the ability to control the rate of, I suppose even being tied to this Euribor is probably preferable.
 
I've just been texted that AIB have also announced that they are withdrawing their tracker as of close of business today but cant find any confirmation on the web, anyone have further info. I've signed an AIB Tracker for an apt that we get the keys to on Oct 31st and wonder how this effects me.
 
bond-007 said:
All they have to do is change the margin. ECB + 0.5% could suddenly become ECB + 1.5%.
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Surely they are breaking their contract with the mortgage holder if it's not in the T & Cs?

If they could do this then it's not a tracker mortgage but just a regular standard variable mortgage.
 
SPC100 said:
Can they not borrow direct from ECB at ECB rate?
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Only if they have elligible collateral - government bonds, some investment grade corporate loans (not many left in Ireland!). to buy the government bonds where the yield is far lower than Euribor is costly, so banks only hold a certain amount of them. Government bonds yields are far lower because they are consired close to risk-free - AAA rated.
 
rmelly said:
PTSB also have it.
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in new contracts or all along - you have me worried now!



polaris said:
Surely they are breaking their contract with the mortgage holder if it's not in the T & Cs?

If they could do this then it's not a tracker mortgage but just a regular standard variable mortgage.
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I don't think they can change the margin for existing contracts, just new ones. Otherwise as you say it's not a tracker at all.
 
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