Thousands to take up AIB's movable tracker mortgage
Published 30/06/2014 | 02:30
THOUSANDS of AIB, EBS and Haven mortgage holders are expected to take up a new deal that will allow them to move home and keep their valuable trackers.
The new offer will be available to the mortgage holders with the AIB group from tomorrow, the Irish Independent has learned.
It is estimated that large numbers of homeowners have held off moving because up to now they would automatically lose their good-value trackers.
AIB will add 1pc to the existing tracker rate, but the deal will apply for the full remaining period left on the tracker mortgage.
Both Ulster Bank and Bank of Ireland also impose an extra 1pc, but restrict the tracker mover rate to just five years.
For customers of AIB group, any additional lending on top of what is already owed will be at a variable rate or a fixed rate.
AIB is also cutting the cost of its fixed rates by up to 0.59pc.
The new tracker-mover deal from AIB will mean customers who are in negative equity – where the value of the property is less than the mortgage taken out on it – will be able to move to a new property.
The bank is also enhancing its negative equity product to allow people to trade down, as well as to trade up.
AIB said there had been a large volume of inquiries about the new tracker-mover product.
Head of mortgage business development at AIB, Michael Quirke, said: "These enhancements to our mortgage offerings further underline our commitment to supporting the residential property market and our customers who are considering moving home."
Finance expert and founder of the Askaboutmoney.com website Brendan Burgess welcomed the fact that AIB had introduced what he said was a flexible tracker mover product.
Trackers are priced at a set margin over the European Central Bank rate, currently at 0.15pc.
Tracker holders are typically on a margin of 1pc to 1.25pc over the ECB rate. But some are on a margin of just 0.5pc over the ECB rate.
This means a typical tracker holder is moving to a rate of just 1.40pc following the cut this month in the ECB rate. Most variable rates are 4.5pc.
Mr Burgess said: "The difference between a cheap tracker and a full standard variable rate deterred a lot of people from moving."
Tracker transfers that allow you to retain your tracker for the full remaining term were now offered by KBC Bank and Permanent TSB along with the AIB group, he said.
However, KBC adds a 1.25pc margin to the existing tracker rate.
Three lenders – Bank of Scotland, Danske Bank and ACC Bank – are pulling out of this market and do not offer tracker transfers.