Tracker mortgage: €205k @ 2.1%, 17 years remaining
Variable rate mortgage: €145k @ 3.9%, 31 years remaining
Hi Frederick
The way to answer this is to calculate the average rate you are paying.
Assuming you are referring to the current balances...
KBC is the cheapest variable rate for your LTV at 3.05% + €3,000 to cover your fees, so that is clearly not the right thing to do.
You could switch the lot to Ulster Bank at 2.3% fixed for two years. But where would you be after that? If the banks increase rates more than the ECB rate increases, you would regret switching.
So I reckon that paying an aggregate 0.5% over the cheapest fixed alternative is probably a price worth paying for the tracker.
If you have surplus cash, pay off the non-tracker portion of the mortgage.
You must keep this decision under review.
As time progresses, you pay down the capital on the tracker quite quickly, so its value diminishes.
If the banks cut rates without a cut in ECB rates, there might be better value elsewhere.
Brendan