Should I Take Tracker?

Due to an ongoing Central Bank review my bank has offered me the chance to break out of my Fixed Mortgage and take a Tracker, should I do it? I won’t be the only one facing this decision due to this issue.

The Tracker rate would be 1.1 above the ECB = 2.35% at the moment.

2/3rds of mortgage is fixed for 3 years at 3.6% until Jan 2013 and 1/3 for 5 years at 4.1% until Jan 2015. I have been guaranteed the tracker rate on maturity of the fixed term.

The imminent ECB Rate hikes are making me think twice about going for the Tracker now. Any thoughts would be greatly appreciated.

The ecb would need to rise by 1.5% before you start losing on the 2/3rds and by 2% before you start losing on the final 1/3rd.

You'd also have the benefit of the lower rate prior to when the ecb goes over this.

IMO, assuming another .75% this year by ECB and .75% next year, you're better off on tracker.

It would take a 2% rise by end of this year to make it worth keeping the fixed rate and I can't see that happening.

Thanks Mcaul for your input, appriciate it.

Hi Detones, I am just wondering what bank is allowing you to break out of fixed? I am having issue with BOI and they want me to pay the penalty to break out. Was put on variable in error in 09 but then I susequently fixed last June for 3 years and naturally I now want out of this and want my tracker back dated so just curious to know if we dealing with same institution

Hi Val,

Yes were dealing with the same situation, I'll also be pursuing them for a refund.

They have only offered me the variable on the portion of mortgage I fixed for 3years. There was no Early Payment Penalty for me, however this may be due to fact we took out the Fixed term in January 09 and there is not as long left as yours. However the penalty should not apply anyway, this was an error made by the bank and they should sort you out for it.