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

Folks thanks very much for all your advice, really appreciate it.

I've talked with an advisor who advised to stick with the Tracker but only IF I can afford to pay it at 5.25% for two years (worse case scenario if there's two more increases and it takes 2 years before reducing). If I don't think I can do that he's advised to fix it.

From reading online the thinking is that the ECB wants the rate at somewhere around the 2% mark so if that did happen in time mine would be 3.25%. That's only .25% less than the current 5 year fixed or 0.55% less than the 10 year fixed. Would seem better to take the fixed then? I'd have 9 years left when it finished then.

Bit of thinking and math to do over the weekend!
 
If your tracker rate went to 5.25% you would be paying €930 per month. Would you be able to manage if that happened?
 
1) Existing tracker margin. (This is set in your mortgage contract.)
  • 1.3%
2) If you have an additional mortgage on the same property, what is the rate?
  • No
3) Amount outstanding on your mortgage
  • 90k
4) Remaining term ..15 years
5) Lender Boi
6) Value of your home 280k
7) Might you trade up or overpay your mortgage? No
8) Do you face any barriers to switching? E.g., an impaired credit record, a mortgage with a warehoused portion due to a restructuring, reduced income since you took out your mortgage, you are now renting out the property. No
9) What rates are you considering fixing at? 3% over 5 years or 3 3% over 10 years
10) Does your house have a high BER rating which might qualify it for a lower rate? Check it here or estimate it if necessary...NO

I'm in the exact same boat with 15 years left and 90k too pay with a margin of 1.3%..from last Sept I kept requesting rate changes and luckily I got in before latest BOI increases

so I can fix at 3% for 5 years or 3.3% for 10 years,..I have till the 8th too decide but I'm edging toward fixing for how long I don't know
 
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j@j0209 said:
1) Existing tracker margin. (This is set in your mortgage contract.)
  • 1.3%
Click to expand...
Your tracker rate is about to go to 4.3%, and in March it will probably go to 4.8%. Nobody can really say what will happen after that.

Fixing for 10 years at 3.3% looks like a good idea.

j@j0209 said:
so I can fix at 3% for 5 years or 3.3% for 10 years,..I have till the 8th too decide but I'm edging toward fixing for how long I don't know
Click to expand...
If you decide to fix, fix for 10 years (not 5). If you only fixed for 5 years you'd be at the mercy of BOI's rates for the remaining 10 years of your mortgage, and their rates have historically been higher than those of other lenders. If you fix for 10 years, you'll only have the final 5 years on BOI's rates, and it will matter much less then since your balance will be so much lower.
 
Ya we need the certainty of what repayments will be,we were part of the tracker scandal and fought for years to get it back,but I just can't see ecb rates back around 0 ever again,maybe down to between 1.5% and 2% but reading online sources it seems the cheap money days are over,I think wel sort the fix for 10 years @ 3.3%,thanks for the reply and advice
 
My decision now is too fix for 5 or 10 years...today is last day before the newer rates kick in
 
Paul F said:
If you decide to fix, fix for 10 years (not 5). If you only fixed for 5 years you'd be at the mercy of BOI's rates for the remaining 10 years of your mortgage,
Click to expand...

This is so important. BoI has a long history of exploiting existing customers. There is a short window where their rates are competitive and you can guarantee them for 10 years. You should do so.

Brendan
 
Paul F said:
If your tracker rate went to 5.25% you would be paying €930 per month. Would you be able to manage if that happened?
Click to expand...
So for us this is what it came down to and the answer was no. It would put too much pressure on us so we decided to go with the 5 year fixed rate of 3.5% for some stability. May regret it in the long run but for the next few years it was the best option for us & we'll see where the rates are then.
 
Remember that you can have:
  • A 5-year fix at 3.5% – a monthly repayment of €803, or
  • A 10-year fix at 3.8% – a monthly repayment of €824
@Brendan Burgess said his inclination was to fix for 10 years. That has the advantage of only having to worry about rate fluctuations for the remaining 9.5 years of your mortgage (versus 14.5 years if you fix for 5 years).

Either way (but especially if you fix for 5 years), you should put an annual reminder in your calendar to review your mortgage to see if switching lender makes sense.

Have you already sent off the form to fix?
 
1. Existing tracker margin BOI
ECB +0.9%

2) If you have an additional mortgage on the same property, what is the rate?
  • Fixed at 3% with 2 years of the fixed-rate period remaining.
3) Amount outstanding on your mortgage
  • 229K tracker and a second mortgage 71K on the property
4) Remaining term Tracker 9 years Second Mortgage 17 years
5) Lender BOI
6) Value of your home 700K
7) Might you trade up or overpay your mortgage? No on the tracker (might pay off the second loan once the tracker is finished)
8) Do you face any barriers to switching? No
9) What rates are you considering fixing at? 3.5% 5 years or 3.8% 10 years (on the Tracker)
10) Does your house have a high BER rating which might qualify it for a lower rate? No
11) How well could you handle a further 2% rise in the ECB rate? Not great
 
@patsyhayes70

With the ECB rate at 3%, your mortgage rate is now 3.9%

With 9 years to go, if you fix for 5 years, you will have 4 years left at the mercy of BoI's exploitative mortgage rate policy.

Given that you would have difficulty handling a rate increase, you should fix for 5 years.

Brendan
 
Should this not change to 1% now as its unlikely that there will be more than 0.75% or max 1% extra added at this stage

11) How well could you handle a further 2% rise in the ECB rate?
 
peemac said:
Should this not change to 1% now as its unlikely that there will be more than 0.75% or max 1% extra added at this stage

11) How well could you handle a further 2% rise in the ECB rate?
Click to expand...

Hi peemac

I agree that 1% is the most likely maximum increase.

But economic and interest rate forecasts are woeful. So I thought that 2% would be the safest bet?

Maybe ask both?

11) How well could you handle a further 1% rise in the ECB rate?
12) How well could you handle a further 2% rise in the ECB rate?
 
Thanks, Brendan, that was what I was thinking (probably best to fix for 5 years instead of 10) - as (my rate) will probably go to 4.40% minimum soon enough, and then who knows how long it will take to get back to 3.4% could be a year plus. (only glimmer of hope is inflation coming down and supply chains are easing)

You mention
BoI's exploitative mortgage rate policy. ---
Click to expand...
What has that meant in the past for fixed rate BOI mortages holders coming to renew their mortgage rates - any guess what a fixed rate could be like in five years, given historic fixed rates? As its hard ot find this info online - all new to me been in my cosy Tracker for the last 19 years
 
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BoI kept rates high and attracted new business with cash back, or with special deals with lower rates and no cash back, neither of which existing customers could avail of.

While this has been less obvious recently, I expect BoI to revert to type.

No one has any idea of what rates will be in 5 years.

Brendan
 
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Thanks Brendan,
Final question - just wondering should i fix for the remaining term of 9 years (at 3.8%), given that when I come out of my fixed rate (after 5 years) as you say I am at the mercy of the prevailing rates, which historically have been a lot more than 3.8%? My current circumstances are not likely to change between now and then (wage static / no inheritance etc..)
 
patsyhayes70 said:
should i fix for the remaining term of 9 years (at 3.8%),
Click to expand...

Will they allow you to fix for 9 years?

Assuming they do - 5 years at 3.5% or 9 years at 3.8%?


If you fix for 5 years, you will be at their mercy for the last 4, but the balance will be a lot lower then. You will pay off a lot of capital over the next 5 years.

It's much of a muchness.

Brendan
 
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