Tracker rate mortgage change

[christine2756]

@bondsteveen That's not how tracker mortgages work

 

[bondsteveen]

@christine2756 I understand that the apr is an annual rate and that rate is paid on a declining balance and that as the years progress more of the payment goes to principal than interest.

That said for a €100,000 mortgage over 20 years with a rate of 0.8 the total interest paid would be €8,246 and for a rate of 2.8 the total interest paid would €30,714

Taking the above figures gives a percentage difference of 370%

The rate of 2.8 would have monthly payments of €544 and that of 0.8 monthly payments of €451.

A lot to consider when changing rates.

 

[carbon20]

@bondsteveen I believe when the OP says they have a 0.8% tracker, that is 0.8% on top of the ECB rate which has increased from being 0% for years to 2% in the space of half a year. So they’re already paying 2.8% but the concern is that the ECB are planing even more rate hikes towards 3% and maybe higher depending on the inflation numbers

 

[christine2756]

@carbon20 Precisely

 

[bondsteveen]

@christine2756 Sorry my misunderstanding.

 

[pamkjohn]

@lonmarjc I gave up my 1.25 rate for a five yr 3% rate. I'll only have 2yrs left after this. A lot depends on the current monthly payment and how long you've left. Luckily the difference for me in monthly payments is only an extra 35 per month as I've around 50k left. As I was advised by someone independent - it won't make that much of a difference for me as the values are relatively low.

 

[raerae300]

@lonmarjc I got offered a shocking 5.2 over 5 by KBC who I have my tracker with. Shocking and I went looking as I feel the rates will only rise for a solid 18 months. Realistically I want to just lump off my mortgage to combat the tracker increases that will be coming

 

[pebeto]

@lonmarjc You must be on 0.8 + the bankers cut no ?

 

[shawnee77]

@lonmarjc You seem to be getting a lot of strong blanket opinions here that I don’t think are helpful.

The advice in this forum should help. My read of the general advice is that it may or may not be the right call to fix depending on your lender and circumstances, and your ECB + 0.8% margin is in the middle of the pack of tracker value.