Key Post Should borrowers with trackers consider fixing? (General guidelines)

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Hi Brendan,

Would value your opinion:

1) Existing tracker margin ECB+1.1 %
2) Amount outstanding on your mortgage 235K
3) Remaining term 18 years
4) Lender PTSB
5) Value of your home comparable houses in the area recently sold between 320-350K
6) Might you trade up or overpay your mortgage? not trading up, could potentially overpay in the future
7) 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. No
8) What rates are you considering fixing at? I don't think I should, but value your opinion on this
 
Petal said:
1) Existing tracker margin ECB+1.1 %
2) Amount outstanding on your mortgage 235K
Click to expand...

Hi Petal

You definitely should not fix with permanent tsb. The longest you could fix for would be 7 years at 3%. And after that you would be at the mercy of ptsb's policy of very high rates for existing customers.

So you should not give up your tracker for that.

You have about a 73% Loan to Value.
So you could switch to Avant Money and fix for 10 years at 2.6%
Or you could fix for the full 18 years with Avant at 2.75%.

It's a very close call. At 1.1% margin, it's neither too high where fixing is clear nor too low where keeping the tracker is clear.

I would probably start the process of switching to Avant. This will take a few months. And when you have to make a decision, base that decision on the fixed rates pertaining that day.

Either way, you will probably have a cheap enough mortgage for the remainder of the term.

Brendan
 
Hi Brendan,

1) Existing tracker margin - ECB + .75%
2) Amount outstanding on your mortgage - 147K
3) Remaining term - 14 years
4) Lender - PTSB
5) Value of your home - 425,000
6) Might you trade up or overpay your mortgage? - Will overpay in the future
7) Do you face any barriers to switching -No
8) What rates are you considering fixing at? - I don't know

Thanks in advance to all.
 
castle4 said:
1) Existing tracker margin - ECB + .75%
2) Amount outstanding on your mortgage - 147K
3) Remaining term - 14 years
4) Lender - PTSB
Click to expand...

As this is a ptsb mortgage, you should not give up your tracker to fix with them. Their fixed rates are high and after 7 years you would be at the mercy of their very high rates.

As your LTV is <60%, you could fix with Avant for up to 14 years years at 2.4%.

It's a close call. But, on balance, as you intend to overpay, I would stick with the tracker.

Brendan
 
Thanks a mill Brendan, it's exactly like you said, it's not a clear situation, I think I'm leaning more towards not fixing, hoping that this crazy economy and inflation will come right again at some stage!
 
Hi Brendan,

Thanks in advance for your help.

1) Existing tracker margin - 1.75%
2) Amount outstanding on your mortgage - 152k
3) Remaining term - 17years
4) Lender - AIB
5) Value of your home - 450k
6) Might you trade up or overpay your mortgage? - Trade up - no, Overpay - yes
7) 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. - No
8) What rates are you considering fixing at? - Avant 15years @2.4% (only started process = unlikely to complete in time) or AIB 5years @2.45% / 10years @3.2%

Also have a second variable mortgage on the same property with AIB on 2.95%, balance of 96k with 9 years remaining. Assuming can't move both mortgages to Avant in time will fix for 5years @2.45% with AIB.

Should I try for Avant and risk AIB increasing rates or just move forward with AIB and what would you suggest in relation to the tracker?
 
1) Forget the tracker. A margin of 1.75% is not worth much.

2) You have a Loan to value of 55%

3) I think that 2.45% at 5 years is better than 3.2% for 10 years.
If you fixed for 10 years you would be paying an extra .75% on €248k or €2,000 a year.
No one knows, but I would take the chance and fix for 5 years.
Any overpayments will be cheaper as well.

4) Avant at 15 years at 2.4% would be best of all. If you could make the choice today, I would say go for that.
But how long will it take Avant to make a decision?
In the meantime, Avant might increase their rate.
In the meantime, AIB might increase their rate.

No one knows, but I think I would be on the safe side and fix with AIB.

Brendan
 
Thanks Brendan, great advice as always
 
Hey,
Would really appreciate any input, we were assuming we should fix and had started the process but didn’t realise the timelines involved…

1) Existing tracker margin. 2.1%
2) Amount outstanding on your mortgage 235k
3) Remaining term Just over 10 years
4) Lender AIB
5) Value of your home Approx 460k
6) Might you trade up or overpay your mortgage? Possibly overpay
7) 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. No
8) What rates are you considering fixing at? Had been considering Avant 7 years (2.4 I think) but didn’t realise how long their timelines are.

Thanks so much!
 
Hi Maeve

Your tracker is not worth much. A high margin with only 10 years left, so leave that out of the equation.

You could fix with AIB for 5 years at 2.35%. The equivalent 5 year rate with Avant would be 2.15%

So you save .2% of €235k or about €400 a year for 5 years - say €2,000. You would pay €1,500 legal fees up front.
So for all the hassle, you would save €500.

And there is a big risk that Avant's rates or AIB's rates will rise before Avant processes your application.

So fix for 5 years with AIB.

You could consider fixing for 10 years at 3.1%, but that would not be worth it.
If you qualify for a Green mortgage you would get a rate of 2.1% with AIB.

Brendan
 
Hi Brendan

All advice appreciated

1) Existing tracker margin. 2.25%
2) Amount outstanding on your mortgage 189k
3) Remaining term 21 years
4) Lender PTSB
5) Value of your home Approx 330K
6) Might you trade up or overpay your mortgage? Considering taking extra to finish outside of house
7) 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. No
8) What rates are you considering fixing at? We were thinking of releasing equity on mortage of 40K approx to fully complete self-build house and fixing for as long as possible. Have applied to Finance Ireland and was looking at a 15 year fixed but now that rates have increased I am getting concerned. We have sent in application with 2 weeks and waiting to hear.
Other option is to fix on balance of current mortgage and forget top up for the moment and fix with Permanent TSB for 7 years at 3%. Am concerned this could also go up so wondering how long can I wait really. Appreciate any advice.

Thanks so much!
 
Thanks so much Brendan, very much appreciated.
I just realised I had a typo in the outstanding amount - it’s approx 135k not 235k!
Also, if changing lender my self employed husband would need to get accounts signed off so that’s an additional cost.
If you thought that would make any difference to what we should do would be great to hear, I’m thinking those factors make it even less worth while trying to change lender.
 
Hi nichorra

This is a very difficult case.

A tracker of 2.25% is not much use. But it might be useful if you are stuck with ptsb.

You have a 57% LTV at the moment.
If you borrow €40k more, you will have €229 mortgage on a house worth €330k or 69%. (It's safest to assume that the value will not rise due to the extra work.)

You could fix for 7 years with Avant at 2.35% but there is no knowing how long this will take or what the rates will be when you draw it down.

Ptsb exploits its existing customers, and they charge 3% for a 7 year loan. But they really go for people with top-ups where the rate is 3.95% variable.

On balance, I would make a plan to get out from under ptsb's clutches especially as you have 21 years to go.

So, apply to Avant and AIB. Apply for enough to clear your mortgage and do the home improvements.

There is a risk that rates will rise by the time you draw down your switcher mortgage, but I don't think that they will be more than 3% and 3.95%. They could be, but probably won't be.

If you can't or don't switch, I would reluctantly stay with the tracker rather than leaving myself vulnerable to ptsb's treatment of non-tracker existing customers.

Brendan
 
Brendan Burgess said:
So you save .2% of €235k or about €400 a year for 5 years - say €2,000. You would pay €1,500 legal fees up front.
So for all the hassle, you would save €500.
Click to expand...

Your savings by switching to Avant would be only .2% of €135k or €200 a year. So the savings over the first 5 years would not be enough to pay the costs of switching.

So it makes the decision to fix with AIB for 5 years clear cut.

Brendan
 
Brendan Burgess said:
Your savings by switching to Avant would be only .2% of €135k or €200 a year. So the savings over the first 5 years would not be enough to pay the costs of switching.

So it makes the decision to fix with AIB for 5 years clear cut.

Brendan
Click to expand...
Thanks so much.
 
1) Existing tracker margin. 1.1%
2) Amount outstanding on your mortgage 130
3) Remaining term 15 years
4) Lender KBC
5) Value of your home Approx 250k


Hi Brendan,

Having only gotten my tracker back in I think 2019 or so when all the tracker stuff was going on I really enjoy the lower cost of my mortgage but now that KBC, my lender is pulling out of Ireland I am wondering what to do. Have you any advice for me?
 
Hi Muddle

1) Default option - do nothing : Stay on tracker. ECB rates will probably rise to 2% , so your rate will rise to 3.1%

2) KBC alternative: Fix for 5 years at 2.4% - But you will be vulnerable to BoI's very high rates for existing customers after that.

3) Avant alternative: Switch to Avant for 10 years at 2.4%

I think that the Default option of staying on the tracker is better than becoming a customer of Bank of Ireland's exploitation of existing customers. Anything could happen at the end of 5 years.

The Avant alternative is better again, if you can qualify for it.

So apply to Avant.
If that rate is still available when you get to drawdown stage, go for it.
If Avant's rates have risen in the meantime, just stay on your tracker.

Brendan
 
1) Existing tracker margin 3.25% Tracker
2) Amount outstanding on your mortgage €301,600
3) Remaining term 20.8 years
4) Lender PTSB
5) Value of your home 470,000 plus ?
6) Might you trade up or overpay your mortgage? Started over paying this year €1100 pre paid to try reduce term to 15 years
7) 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. No
8) What rates are you considering fixing at? Unsure what to do thinking of fixing for 5 years but looking for some advice
 
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