Process of Changing from variable to tracker

[davidclayton]

hi all,

newbie here. researching mortgages with a view to buying a house in about 6 months. was thinking of going for a fixed rate for a couple of years, then move to a tracker rate.

as for as i know, if you want to prematurely change from fixed to variable (before you have finished the fixed term), you are charged fees. my question is that when you're on a tracker and you want to change to variable, are there any changes?

also, what's all this split mortgages about? as far as i can tell, you can pay half your mortgage on fixed and half on variable/tracker. i presume the fixed side of this is term based aswell? (ie. 3 years, 10 years, etc.). are the rates differnt on these split mortgages, or is it just the standard fixed/variable /tracker rates used?

all advice appreciated,
dave.

 

[irishlinks]

Moving from a tracker to a standard variable rate would - in most cases - not be of any use to you. Most (if not all) lenders trackers are at lower rates than their "standard variable" rates. Also - on a tracker you are guaranteed to stay a specific % above the ECb rate for the length of the mortgage. A "variable" will probably move up and down roughly in line withe ecb rates - but it could be put up if the lender wanted to at any time.

Re Split mortgages - yes the rates would normally be the lenders standard rates. It's just like having 2 seperate mortgages with the same lender . It's a good way of hedging your bets .

 

[davidclayton]

on a tracker you are guaranteed to stay a specific % above the ECb rate for the length of the mortgage. A "variable" will probably move up and down roughly in line withe ecb rates.

i know at the moment trackers are a fair bit cheaper, but let's just say that in the future (because of competition or other factors) a tracker becomes more expensive than a variable rate. could i change to a variable rate, and if so, are there fees involved?

Re Split mortgages - It's just like having 2 seperate mortgages with the same lender . It's a good way of hedging your bets .

can you tell them what percentage to split the two? or does it have to be 50/50? (ie. could it be 70% fixed and 30% tracker?)

 

[irishlinks]

i know at the moment trackers are a fair bit cheaper, but let's just say that in the future (because of competition or other factors) a tracker becomes more expensive than a variable rate. could i change to a variable rate, and if so, are there fees involved?

I suppose it would depend on each lenders terms and conditions and the difference in rates involved. Most lenders if threatened with you going elsewhere would probably let you swap over for free if you push.

can you tell them what percentage to split the two? or does it have to be 50/50? (ie. could it be 70% fixed and 30% tracker?)

Again each lender may be different - but I would hope that all of them would allow any split that you wanted. Ask them - if any of them don't seem willing and it's what you want - then go elsewhere.

 

[davidclayton]

thanks for the help irishlinks

 

[csirl]

i know at the moment trackers are a fair bit cheaper, but let's just say that in the future (because of competition or other factors) a tracker becomes more expensive than a variable rate. could i change to a variable rate, and if so, are there fees involved?

Generally banks will reduce their rates i.e. margin above ECB, at the request of the customer if the customers rate is out of whack with market competition and there is a danger that the customer will move to a competitor. Usually done at no cost to customer.