Key Post I have a Bank of Ireland tracker – should I consider fixing?

@Oscar77

Assuming ECB rates of 3%, you will shortly be paying 4.35%

After that ECB rates could rise or fall.

So it might appear tempting to fix at 3%. But what happens after the 5 years? You will be subject to Bank of Ireland's predatory lending practices towards existing customers.

So, you should either fix for 10 years at 3.3% which would mean that you would have only 7.5 years left subject to BoI's rates.

Or stay on the tracker and have the margin guaranteed for the the full term.

If you can handle a rate rise to 4.35%, then I think you should live with the tracker.

But if that would cause you great difficulty, then fix for 10 years.

Brendan
 
Thanks Brendan
 
Hi Brendan,

Happy New Year. Looking for some advice as the fixed leg of our mtg is coming to an end. Trying to decide if keeping the tracker is sensible or should we fix all of our mtg and stay or switch to a different lender.

1) ECB +1.9%
2) Fixed @ 3% 1 month left.
3) Tracker 206k
Fixed 203k
4) Tracker 18yrs
Fixed 23yrs
5) BOI
6) 850k
7) No
8) No
9) 3% 5 yrs or 3.3% for 10yrs
10) B2

Thanks in advance.
 
@sonnyikea

ECB +1.9% is worth nothing. With ECB rates likely to go to 3%, you will be paying 4.9%
While you qualify for a green mortgage, Bank of Ireland does not give them to existing customers.

Your LTV is 48%

5 or ten years fixed seems like the right idea. I don't trust Bank of Ireland, so in 5 years, their rates may yet again be the highest in the market. So as you have no plans to overpay or trade up, fix for 10 years.

I would say that these rates will rise in the very near future.
No need for you to wait for the current fixed rate to end. Break out of it and fix for either 5 or 10 years.

In case there is any delay in getting the early repayment fee for the fixed rate bit, fix the tracker immediately.

Brendan
 
Thanks @Brendan Burgess much appreciated. I see that you don’t favour PTSB either but they are coming up as a very competitive 5yr green mtg with 2% cash back + 2% monthly cash back if I open an account that charges €6 a month fees. It seems too good to be true. Thoughts?
 
Hi Sonny

Two risks with ptsb.

They have a long history of exploiting vulnerable customers. I doubt that this has changed. So while you might get a good deal for 5 years, you would be very vulnerable at the end of this. It's just not worth the risk.

But more importantly, BoI and ptsb may well increase their rates in the near future. You could apply to ptsb only to find that by the time you have your letter of offer or draw down your mortgage, they have reverted to their norm. And by then, BoI may well have increased their rates as well.

The simplest, safest, hassle-freeest, approach is to fix now with Bank of Ireland.

Brendan
 
Thanks Brendan. I appreciate your input and help.
 
Existing tracker margin. ECB + 1.25%
2) If you have an additional mortgage on the same property, what is the rate? No additional
3) Amount outstanding on your mortgage Approx 145k
4) Remaining term 18.5 years
5) Lender BOI
6) Value of your home Estimate 265K
7) Might you trade up or overpay your mortgage? Considering making another lump sum of €10k. Made a €10k payment 2 years ago.
8) Do you face any barriers to switching? No
9) What rates are you considering fixing at? 3% for 3 years or 5 years or 3.3% for 10yrs
10) Does your house have a high BER rating which might qualify it for a lower rate? No
 
@Coggy79

With the ECB rate at 2.5%, you will soon be paying 3.75%. This could go up or down, but is more likely to rise than fall.

The problem with Bank of Ireland is that they have a long history of charging much higher rates to existing customers than new customers, so fixing for 5 years, leaves you will 13 years at their mercy.

On balance, I would fix now for 10 years for the following reasons:
  • You won't be far wrong. Even if the ECB rate fall, I doubt that they will fall much below the 2% required for fixing at 3.3% to cost you money.
  • Fixing for ten years, leaves you at their mercy for only 8 years. I would worry less about that as your mortgage balance will be lower then anyway.
But pay off the €10k first and more if you think you might pay it off in the near future. By fixing for 10 years, you could face early repayment penalties if you try to pay a lump sum off it.

But make a decision today.

I have no inside knowledge, but BoI could increase their rates at any time. They are behind the others in this rate increase cycle.

Brendan
 
Appreciate the advice Brendan. Thank you.
 
Hi Brendan

1) Existing tracker margin - ECB + 1.25%
2) If you have an additional mortgage on the same property, what is the rate? Small additional mortgage taken after original one to finish off/furnish self-build house at the time - 3% fixed for 4 more years.
3) Amount outstanding on your mortgage - €136k & €17k
4) Remaining term - 19.5 years & 4 years
5) Lender - BOI
6) Value of your home - Not sure but I'd say €360k-390k
7) Might you trade up or overpay your mortgage? - Probably not on the main one but hopefully on the small one soon.
8) Do you face any barriers to switching? - No
9) What rates are you considering fixing at? Spoke to BOI yesterday. Can fix for 2 years @ 3.4% or for 3/5 years @ 3.5%. 10 year fixed is 3.8%. Variable 3.9%

Thanks in advance
 
Last edited by a moderator:
Do you have a 17 year loan to repay €17,000??? Is that a typo? I think you should fix for 5 years @ 3.5% and save yourself from the worry of the ECB rate rises.
 
@Goggin01 I'd leave it as it is. You've far too long left at the end of the fixed period.

For a while you will be circa 4.75% but likely circa 3% if the ECB medium term target of 1.5%-2% rate is met.
 
Sorry yeah that should be 4 years on the small one. Not worried about that, just put it in.

Thanks for the replies. Both conflicting so just shows how hard a decision it is. Another increase today, another to come in March and possibly one in May too. I'm up to 4.25% now, that could be 5.25% by May. I'd take the hit on it for a short while if I knew or believed it was going to reduce like you said. It's just a matter or "IF" and "When" that happens.

I'm none the wiser. Seems like a gamble either way.
 
A watched phone never rings. You will be watching for the ECB rate to come down each month. How quickly is does......no one knows!

You can have 3% now (I'd hurry though!) or paid 4.25% and 4.75% next month. Each month that passes means that you need a month where the rate is 1.25% to break even if you like. Or you need 7 months where the rate is 2.75% to break even.

The question you need to ask yourself is over the next five years, how quickly do you think the ECB rate will fall back down to less than 1.75% at which point your tracker is saving you money. I think personally, it won't. At the end of the 5 years fixed, you take your chances on the fixed/variable rates available....that's the gamble of life.
 
@Goggin01

So you have €136k @1.25% margin with nearly 20 years to go.

You definitely do not fix for a short term like 2 or 3 years as you would lose your tracker for the remaining 17 years.

As of today you will be paying 4.25% - you will probably be paying 4.75% in a couple of months - it could go either way after that.
You can fix for 5 years @3.5%
Or 10 years at 3.8%

1.25% is not a great tracker but Bank of Ireland is a predatory lender, so the margin is a good guarantee against their predatory behaviour towards existing customers.

Balancing all these, I think I would fix at 3.8% for ten years.

Brendan
 
I disagree Brendan. Five years at 3.00% is a substantial difference. In five years time, his outstanding amount will be under 100k. Plus I would expect (am I allowed say that) that rates would be lower than 3.8% and if they weren't, they would've much higher. If they were 4.60% after your five years fixed, you would be in the same position after the ten years.

Fixing for ten will leave you down money. The commentary from ECB is that we are heading for 4% so with the tracker you would be paying 5.25%
 
PebbleBeach2020 said:
Five years at 3.00% is a substantial difference.
Click to expand...

Which rate are you referring to? BOI don't have a 3% rate:

Best Buy - Which lenders have the lowest mortgage rates? (Updated April 2023)

While I wrote the original post on this, Paul F has edited it and made it far easier to read and has kept it updated. Brendan You (or your broker) should apply to two or three of the cheapest lenders simultaneously. It might take some time for your loan offer to materialise, and today's Best...
www.askaboutmoney.com
 
Is it gone upto 3.5? Sorry, I fixed a few weeks back at 3.00% for five years giving up my tracker. If I didn't, and was doing so now, I would still go for five years at 3.5% and not 10 years @ 3.80%
 
Brendan Burgess said:
You can fix for 5 years @3.5%
Or 10 years at 3.8%
Click to expand...

@PebbleBeach2020

These are the rates I was basing my suggestion on.
If the 5 year rate was 3% and the 10 year rate was 0.8% higher, I think I would agree with you on fixing for 5 years. But at 0.3% difference, argues for a ten year fix - especially with Bank of Ireland as I just don't trust them given their history of exploiting existing customers.

Brendan
 
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