Will all rate cuts be passed to tracker mortgage holders?

S

Shawady

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Just read an article in this morning's paper about the massive drop in profits for the main banks. This statement caught my eye; "The lost profits will make it almost impossible for banks to pass on expected ECB interest rate cuts, of up to 1.25%, to mortgage holders and businesses."
Does this apply to tracker mortgages?
I got a good deal with NIB and was wondering is there any way they can change the terms or take me off the tracker mortgage and put me on a variable rate?
 
Trackers are guaranteed over the period of the loan - they are the only loans where banks have to pass on cuts in interest rates. I got my letter from NIB yesterday notifying me that the cut in interest rates had been passed on.

Sprite
 
Some of the more recent tracker loan offers have a get out clause for the bank allowing them to use another reference rate other than the ECB if an event occurs than fundamentally affects the use of the ECB as a reference rate.
 
NorfBank said:
Some of the more recent tracker loan offers have a get out clause for the bank allowing them to use another reference rate other than the ECB if an event occurs than fundamentally affects the use of the ECB as a reference rate.
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Do you know any particular banks that have these tracker mortgages with get-out clauses?
 
The get-out clauses seem to be a relatively new (since summer) thing. When did you get your mortgage from NIB? Best thing is just to give them a call.

Sprite
 
Shawady said:
I got a good deal with NIB and was wondering is there any way they can change the terms or take me off the tracker mortgage and put me on a variable rate?
Click to expand...

NIB reserve the right to switch you to a variable or fixed rate if your LTV increases above 80%

You must maintain one of their Easy, Easy Plus or prestige packages.

Property must remain your private principal residence.

If there ceases to be a rate of interest known as the ECB Refinance Rate, they will base your rate on the nearest equivalent to the ECB Refinance Rate.

Taken from my terms and conditions late ’06. If none of these apply you are probably ok.
 
I am really annoyed with my bank Ulster bank - all 8 increases have been put on within a week, yet they will not put the decrease until Nov so my payment on the 31st will not have the decrease!!
 
lodged a complaint with Ulster bank today, as they are delaying passing on the rate as long as they can 30 days, however the raise in interest rates was passed on straight on,

lodge a complaint if your not happy
 
WaterSprite said:
The get-out clauses seem to be a relatively new (since summer) thing. When did you get your mortgage from NIB? Best thing is just to give them a call.

Sprite
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PTSB have had an option to break a tracker for a number of years .I took a mortgage with them 3 years ago and deep in the small print of the mortgage offer there is a get out clause .My sol at the time said she could not envisage any circumstances where they would use the clause but methinks things have changed!
 
Anybody knows when Halifax(Bos) passing on interest rate cuts on tracker ? Till date I havn't received any communication from them. For last increase they were very quike to send letter. Any idea what new rates are going to be ? At the moment my online account is showing 4.95%
 
According to PTSB Website, the full .5% rate drop will be passed onto existing holders of variable and tracker mortgages!
 
gally74 said:
lodged a complaint with Ulster bank today, as they are delaying passing on the rate as long as they can 30 days, however the raise in interest rates was passed on straight on,

lodge a complaint if your not happy
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My First Active mortgage came out today and rate cut wasn't passed on either. Not surprised considering FA/Ulster Bank are in same group.
 
NorfBank said:
Some of the more recent tracker loan offers have a get out clause for the bank allowing them to use another reference rate other than the ECB if an event occurs than fundamentally affects the use of the ECB as a reference rate.
Click to expand...

This clause is in my PTSB tracker mortgage that is nearly 2 years old. I think it means though that they can use another reference rate if an event such as say the ECB ceased to exist or something - not an "event" where they are just not happy with their profit margins.
 
I dont see why rate cuts can't be passed on. Sure didn't the banks give people mortgages 2 - 3 years ago on the lower ECB rates. All thats happening now is that these retes are returning to the level of 2005 / 2006
 
gally74 said:
lodged a complaint with Ulster bank today, as they are delaying passing on the rate as long as they can 30 days, however the raise in interest rates was passed on straight on,

lodge a complaint if your not happy
Click to expand...

I did lodge a complaint and got through to their "Concern" team who gave me some bull that they normally know about the increases 6 weeks in advance. I questioned him on this and he could not answer and then asked him given there is talk of another interest rate cut on the cards will they be told 6 weeks in advance!!;)
They must be saving millions by not passing on the cuts straight away.
 
I also have a Tracker with First Active and I didn't get my reduction yeaterday.
I rang them this morning and they said that 'unfortunately, it is not coming into effect until 01st Nov 08'..... Looks like they were holding off for a month...
I was just speaking to a dill so he couldn't explain why this was the case.....

J
 
PTSB are holding off the cut until the first two weeks in Nov I was told yesterday. Looks like they are within their rights to do this as they have to pass them on within 30 days. But of course same as everyone else have raised their rates within a week. If I thought I could get a better rate elsewhere I would move, but don't think the chances of getting a better rate and / or a tracker elsewhere are very good.
 
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