What is a tracker?

T

themom

Guest
Can someone explain this to me like I am a 5 year old because even though Im not 5 I just dont understand!:eek:
 
themom said:
Can someone explain this to me like I am a 5 year old because even though Im not 5 I just dont understand!:eek:
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I presume you mean a tracker mortgage?? All this means is that your mortgage rate tracks the base rate set by the European Central Bank so when the ECB raises rates, your mortgage rate goes up by the same amount and vice versa when they reduce rates. Banks then charge a set margin on top of this ECB rate and this margin varies depending on institution and factors such as loan to value ratio.
 
Tracker mortgage
This is a mortgage that is set at a fixed percentage or 'margin' above the ECB rate at the start of your mortgage. For example, it could be set at the ECB rate plus one percentage point. So, if the ECB rate rises by a percentage point, so does your rate. It will also 'track' the ECB rate when this rate goes down. Tracker rates continue over the term of your mortgage.
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www.itsyourmoney.ie

FYI - this is the type of query that itsyourmoney.ie (and the associated contact e-mail, number and postal address) was set up to help with by the Financial Regulator (required as not everyone is lucky enough to have discovered AAM!, at least not yet).

Before you contact us, you might like to look around this website as many of your questions about personal finance will be answered. We do not give advice or sell anything. We give you free, independent information in plain English and help answer your questions.
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http://www.itsyourmoney.ie/contactus


Can't say I've ever contacted them myself (this was just the second time I actually looked at the website, first was following the initial TV add campaigne), but I'd assume the level of information available is quite good.
 
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