How to calculate the repayments on an UB or BoI mover tracker

[Brendan Burgess]

How to calculate the revised repayments on an Ulster Bank or Bank of Ireland mortgage.

Let's say I have an Ulster Bank mortgage of €200k @1% over 20 years. How much will the repayments increase by if I move the tracker to a new home? The rate will increase to,say, 2% for 5 years, after which it will move to a SVR of 5%

My repayments at the moment are €920 per month.

Karl Jeacle's Mortgage Calculator allows you to do this.

Scroll down to Fixed loan data
Enter Principal : €200k
Enter interest %: 2
Enter years: 20

This will show the payment of 1011.77

Then click on Interest and the "Expenses" field will change to "Interest rates"
Under interest % #1 , put in 5%
Under Start month, put in 61 ( 5 years at 12 months = 60)
Under end month, put in 240 ( 20 years at 12 months = 240)

Click on Payments Table. This will show you the payments for 2014.
Slide over to 2019 and you will see that in March 2014, your repayment will rise to €1,243







Additional interest - which is the real cost in the early years

First 5 years - 1% of €200,000 = €2,000 a year or €166 per month

From year 6 on - a further 3% of €157,000 = €4,710 per year or a further €400 per month - in the initial years

But it won't be €400 a month for the full 15 years. As I pay off the capital, the difference will be much smaller. But as the monthly repayment is fixed, the €200 extra is fixed for the life of the mortgage (assuming interest rates don't change)

 

[pippa175]

Thanks Brendan. I would have thought the repayments would have been higher. I had a look for our own situation and it definitely makes the deal more palatable.

 

[Brendan Burgess]

Hi pippa

Thank you. It was your question on the other thread that prompted me to look for calculators. Then I couldn't find your question to reply to it.

I am very surprised at the figures myself. I thought it would be much more expensive.

Brendan

 

[pippa175]

I had heard previously that on a tracker for a mortgage of 300k, over the lifetime you could save up to 150k when comparing to SVR.

Possibly when I heard those figures it had been computed over a longer lifetime e.g. 30-35 years and estimated higher average SVR.

For us, it is definitely worth paying attention to such variables when figuring out our potential costs.

Thanks for your detailed response, I really appreciate it.
Pippa