this wouldn't happen, where do you thnk variable rates come from, by their nature they vary in line with ECB rates and whether the bank passes on all of the ECB change of part of it is really only the differende. There will be no way that ECB will be 4% and the variable wil lbe less than ECB rate,
I don't think you understood my point/question. I'm not saying the variable rate will be lower than the ECB, I'm saying the ECB/variable rate margin may go below 3.25% and therefore my overall rate may go below the variable rate.
apologies, I didn't think you were talking about the margin, or that a tracker would be more expensive than the SVR. The risk with a SVR is they can increase/decrease it at will, whereas with tracker it goes in line with teh ECB. So if rates were to go up by 50bps, then tracker would go up by 50bps, but the bank could chose to increase the SVR by 100bps, and likewise as rates comedown, they haveto pass on full decrease to trackers but no obligation to SRV holders.
apologies, I didn't think you were talking about the margin, or that a tracker would be more expensive than the SVR. The risk with a SVR is they can increase/decrease it at will, whereas with tracker it goes in line with teh ECB. So if rates were to go up by 50bps, then tracker would go up by 50bps, but the bank could chose to increase the SVR by 100bps, and likewise as rates comedown, they haveto pass on full decrease to trackers but no obligation to SRV holders.
@core123
I was actually just on to PTSB and asked the guy what the story was about moving to a variable out of curiosity..
Yes, I think most people on this forum are aware of how trackers and variables work.
Why would anyone move from a tracker where the rate is cheaper and margin is fixed to a variable where the rate is higher and could potentially move higher again?
If the situation arises at some time in the future that the SVR is cheaper than the tracker, then it may be worth revisiting this.
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