How is tracker less expensive than variable?
- Thread starter wexford
- Start date
The EBS tracker is not cheaper than their variable. Tey cost exactly the same - at the moment. It is not a necessary feature of a tracker that it is cheaper than a variable rate. However many trackers are cheaper than standard variable rates on offer and also give the added assurance that the rate will track the underlying ECB rate - something that standard variables do no promise. Check out some of the on tracker rates for more info.
Going forward with a tracker you know exacly what the margin is. with the variable rate the mortgate provider decides what the margin will be and there is always the posibility that the provider will grant themselves a larger margin at some future date.
I hope this makes sense to you.
I hope this makes sense to you.
Are you sure? See the best buys table for other tracker rates on offer.
Those are nominal rates - the respective CARs are 3.30% and 3.20%. You really need to look at the CAR in order to assess the real cost and compare with alternative offers elsewhere. There are cheaper rates than this on offer - see the best buys list linked above.
Oops! 
Sorry I should have said APR above. APR is to loans what CAR is to deposits. Both are "normalised" rates which allow assessment of the true cost/return of a loan/deposit and comparison across products. The nominal rate does not allow for such like with like comparisons and does not alway reflect the true cost/return on a loan/deposit. Hope that clears things up.
Sorry I should have said APR above. APR is to loans what CAR is to deposits. Both are "normalised" rates which allow assessment of the true cost/return of a loan/deposit and comparison across products. The nominal rate does not allow for such like with like comparisons and does not alway reflect the true cost/return on a loan/deposit. Hope that clears things up.