Key Post I have a tracker managed by Pepper – should I keep it or switch lender?

@Track2023

Hi Paul

It does tilt it towards fixing.

While I was marginally on the side of staying with the tracker, I am probably now marginally on the side of fixing at 3.75% if it's still available.

Brendan
 
Brendan Burgess said:
While I was marginally on the side of staying with the tracker, I am probably now marginally on the side of fixing at 3.75% if it's still available.
Click to expand...
Yes, rates could have gone up by the time a switch is completed.

@Track2023 If you do decide to switch, apply to several lenders at the same time (or make sure that your broker does). Get approval in principle from as many of them as you can and do as many of the subsequent steps as you can before you have to involve a solicitor.
 
Hi Brendan,
Asked for advice here some time ago but for various reasons including a degree of fear of getting it wrong, I left things stand with Pepper. I guess I was hoping the ECB rate might start to settle down but now reckon we could see a volatile political period in the longer term.
So even though ECB just signalled this may be the top of the interest rises, I am wondering if I wouldn't be better off trying to move away from Pepper in order to get a fixed rate and also just to allow myself the freedom to switch products without having to move bank.

I am considering undertaking some energy upgrades which I am told would move my house into the A/B BER rating so wondering if I might grab a green fixed rate too. AIB suggested applying for a variable rate now and transferring to the Green 5 year Fixed once the work is done - could be 6 months before work is finished. I am a bit nervous of getting stuck with a variable should the green fixed rate become too high in the meantime.

One other thing to note is that my mortgage runs until I am 70 but most banks will force me to repay over a shorter period - something I am not crazy about as I would prefer to have more disposable income for holidays etc while I still can.

1) Existing tracker margin.
  • ECB + 1.5%
2) If you have an additional mortgage on the same property, what is the rate?
  • No additional mortgage
3) Amount outstanding on your mortgage
  • €132,000
4) Remaining term: 15 Years
5) Lender: Pepper
6) Value of your home: €500,000
7) Might you trade up or overpay your mortgage? No
8) Do you face any barriers to switching? No
9) What rates are you considering fixing at? AIB Green 3.65% or Avant 7+ year loans at 3.95%
10) Does your house have a high BER rating which might qualify it for a lower rate? Currently E1 but with investment of 35k I've been told I should be able to reach A3 - thinking of including it in new mortgage amount

Any advice very much appreciated
 
@mir2001

When this recent increase is passed on, you will be paying 6% ( ECB 4.5% + 1.5% margin)

It is likely to stay at this level for about a year and then maybe come down. I doubt it will come down below 2% , meaning that you will be paying 3.5%

You could fix for 5year to 10 years with Avant at 3.95%
You could fix with AIB for 5 years at 4.65% or 5.05% for ten years.
You could also go AIB variable at 3.75% but I suspect that this will rise.

It's very hard to know. If the 15 year term is important to you, then stick with Pepper.

But getting a 2% reduction with Avant would seem like good value. I would probably apply to Avant and see what term they will give you and what the repayments will be.

Brendan
 
Thanks Brendan, I will look into the Avant 7 year offer this week as I think it will be a good few years before ECB rate comes back to 2% especially if the war in Ukraine goes on and is compounded by climate change.
 
@mir2001

I don't think the ECB rates at the level they are at will last longer than a year - which is what Brendan says. It could be shorter.
 
Brendan Burgess said:
@Albert2023

Please read the first post

Brendan
Click to expand...
If you want to ask whether you should switch to another lender or keep your tracker, please provide the following information:
1) Existing tracker margin. (This is set in your mortgage contract.) ECB + 0.95%

  • If your tracker margin is 1%, please state it in the following format to avoid confusion: ECB + 1%
2) If you have an additional mortgage on the same property, what is the rate? NA

  • E.g., "Fixed at 2% with three and a half years of the fixed-rate period remaining."
3) Amount outstanding on your mortgage € 50,959.74

  • If you have both a tracker and a second mortgage on the property, specify the amount outstanding on each
4) Remaining term: 5 years and 2 months (exp 13 Nov 2028)
5) Lender Pepper
6) Value of your home €350,000
7) Might you trade up or overpay your mortgage? No/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? 3.75% green 4-year
10) Does your house have a high BER rating which might qualify it for a lower rate? B3
11) How well could you handle a further 2% rise in the ECB rate? Not sure, current salary not sufficient, using up savings to fund cost of living.
 
So you could switch to EBS I presume for 3.75% for 4 years.

You will shortly be paying 5.45% (4.5 ECB + 0.95% margin)

If the ECB rate remains at 4.5% you will save 1.7% of a bit less than €51k or €600.
The saving in the following year will be even lower because the balance will be lower.

So overall, stay where you are. You probably won't recover the costs of switching and if ECB rates fall as expected, you will lose out.

I am not sure how interested EBS would be in a €50k mortgage for 4 years.

Brendan
 
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Thank you Brendan
 
Hi,

I would appricate some advice, please see details of pepper mortgage. Speaking to them this morning there are another 2 rises each by .25% to be added on.

1) Existing tracker margin. (This is set in your mortgage contract.) ECB + 1.4%

  • If your tracker margin is 1%, please state it in the following format to avoid confusion: ECB + 1%
2) If you have an additional mortgage on the same property, what is the rate? N/A

  • E.g., "Fixed at 2% with three and a half years of the fixed-rate period remaining."
3) Amount outstanding on your mortgage € 192,000.00

  • If you have both a tracker and a second mortgage on the property, specify the amount outstanding on each
4) Remaining term: 13 years and 10 months
5) Lender Pepper
6) Value of your home €375,000
7) Might you trade up or overpay your mortgage? yes/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? AIB variable rate 3.95% or maybe Avant fixed for 7 years.
10) Does your house have a high BER rating which might qualify it for a lower rate? C3
11) How well could you handle a further 2% rise in the ECB rate? would struggle
 
Hi, Just wondering who you would advise switching the mortgage to? It has been interest only for the duration but I
made a 300k lump sum payment recently bringing the loan down to 160k. Now looking to switch so we can repay capital, probably looking at a 13 year mortgage ideally with the option of overpayments. Any advice would be welcomed, thanks.


1) Existing tracker margin. (This is set in your mortgage contract.)
  • ECB + .75%

2) If you have an additional mortgage on the same property, what is the rate? None


3) Amount outstanding on your mortgage 160k

4) Remaining term - 9 years interest only
5) Lender - formerly BOSI now pepper
6) Value of your home 700K
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? No idea
10) Does your house have a high BER rating which might qualify it for a lower rate? B3
11) How well could you handle a further 2% rise in the ECB rate? Not well
 
@Carol1978

Sorry, I had not seen this at the time.

You are paying a rate of 5.9% (ECB 4.5% +1.4%) at the moment.

A tracker with a margin of 1.4% isn't great so you should not worry about losing it.

You could fix for 7 years with Avant at 3.95% .

This would be the equivalent of a ECB rate of 2.55% + 1.4% .

It's very hard to forecast ECB rates but they may come down to 2% but probably won't go much below that. If they fall to 2% , you would be paying 3.4%.

I think that the security of 3.95% for 7 years is worth going for. But it's close.

Brendan
 
munster99 said:
ECB + .75%
Click to expand...

So today, you are paying 5.25% ( ECB 4.5% + 0.75%)

ECB rates will probably fall to 2% at some stage, your interest rate will fall to 2.75%

You could probably fix at 3.85% with the likes of Avant.

On balance, I think you should stick with your tracker.

Brendan
 
Thanks Brendan, that was my issue, whether to hold out or switch now.
 
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