Thursday 29 September 2016

Ulster Bank allows movers to keep tracker-type deal for longer

Published 18/08/2015 | 02:30

Thousands of people with tracker mortgages are reluctant to move as their rates are such good value and they fear losing the tracker rate
Thousands of people with tracker mortgages are reluctant to move as their rates are such good value and they fear losing the tracker rate

House movers who have an Ulster Bank tracker mortgage are set to benefit from a change in the rules.

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The bank is to allow those tracker holders who are moving house to keep a tracker-type rate for 10 years, in a move that puts it up to other lenders.

Up until now, Ulster Bank allowed tracker movers to keep the low rate only for five years.

Thousands of people with tracker mortgages are reluctant to move as their rates are such good value and they fear losing the tracker rate.

Most people with trackers are paying interest of only 1.05pc, as the rate is set at 1pc above the European Central Bank rate (ECB).

Now Ulster Bank will allow existing tracker mortgage holders who are moving to keep the amount they have still to pay on a new tracker rate.

It will be put on a new tracker that is between 2pc and 2.5pc above the ECB rate, and this rate would apply for 10 years.

Those in negative equity - where their borrowings are more than the existing property's value - will pay the higher margin.

Any new borrowings over and above the existing debt will be on the bank's fixed or variable rates.

Askaboutmoney.com founder Brendan Burgess said the new offer represented good value.

He said 10 years was long enough on the new tracker rate, as the balance owed after that time would likely be small.

Bank of Ireland offers a five-year window for any amounts transferred from an existing tracker and adds 1pc to the tracker margin.

AIB, Permanent TSB and KBC Bank allow homeowners to move the tracker for the remaining length of the mortgage, said Mr Burgess.

Irish Independent

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