TRACKER mortgages are a dying breed. By the time first-time buyers feel the time is right to hop on to the property ladder, chances are they'll pay a hell of a lot more to borrow money than a homeowner who snapped up property before the credit crunch.

Since then, banks have pulled the plug on a range of mortgages -- 100 per cent loans are no longer available from most banks, and cash bonuses for first-time buyers are a distant memory.

KISS GOODBYE TO TRACKERS

The latest pruning has been on tracker mortgages. These mortgages, which track the European Central Bank (ECB) rate, are usually a lot cheaper -- particularly if interest rates are falling.

If you borrowed half of the value of your home from National Irish Bank (NIB) before last August using its tracker rate, you managed to snap up the cheapest mortgage around -- one that is 0.5 per cent higher than the ECB rate. As the ECB rate is at 3.75 per cent, a homeowner with this tracker mortgage is paying 4.25 per cent (4.34 per cent APR) interest.

As NIB pulled all its tracker mortgages for new customers earlier this month, its cheapest mortgage for a homeowner borrowing half of the value of their home today is a standard variable rate of 5.15 per cent (5.28 per cent APR). If the homeowner borrows €200,000 over 25 years, his monthly repayments under this rate come to about €1,187 -- that's €103 a month (€1,236 a year) more expensive than had he snapped up the cheapest NIB tracker mortgage before August.

NIB is not the only lender to withdraw its tracker rates for new customers. So too have AIB, BoI, EBS, First Active, IIB, Halifax, Permanent TSB and Ulster Bank.

Bank of Scotland is due to pull its tracker mortgages for new customers on November 4. Its lowest tracker rate, which is available (until November 4) to those borrowing more than €250,000 and up to 60 per cent of the value of their home, is 5.5 per cent (5.64 per cent APR) -- 1.75 per cent higher than the ECB. Anyone borrowing more than 60 per cent qualifies for a tracker rate of 5.55 per cent (5.69 per cent APR).

Leeds Building Society is the only other lender offering tracker mortgages to new customers -- but only to those borrowing up to 70 per cent of the value of their home. At 5.95 per cent (6.3 per cent APR), the Leeds tracker mortgage is not good value for money; it is 2.2 per cent higher than the ECB rate -- more expensive than the standard variable rate offered by most lenders.

"Since tracker mortgages were introduced about six years ago, anywhere from 350,000 to 400,000 tracker mortgages were taken up by Irish homeowners," said Frank Conway, director of mortgage brokers, the Irish Mortgage Corporation. "Many of those tracker mortgages were given out at between 0.95 and 1.1 per cent over the ECB rate."

HOLD ON TO TRACKERS IF YOU'VE GOT ONE

The credit crunch means most lenders can no longer afford to offer tracker mortgages to new customers. Existing customers who took them out before lenders pulled the plug on trackers have nothing to worry about. Unless they sign up to another mortgage, they will continue on a tracker rate.

"Some banks have been trying to convince borrowers to come off tracker mortgages and on to fixed-rate mortgages instead," said Michael Dowling, of the Independent Mortgage Advisers Federation (IMAF). "Think before you do that. Trackers are now a prized possession."

BECOME A DENTIST IF YOU'RE CASH-SHY

AIB, Bank of Ireland, First Active, EBS Building Society, National Irish Bank and Ulster Bank allow first-time buyers to borrow up to 92 per cent of the value of their home, while with Halifax and Bank of Scotland, the maximum mortgage is 90 per cent.

If you have a particular job -- such as an accountant, actuary, dentist, doctor, or lawyer --you can borrow up to 95 per cent of the value of a home from First Active and Ulster Bank. You may be able to borrow the full price of your home with AIB. "Young professionals who can demonstrate a strong capacity to increase their salary over the following three years may qualify for a 100 per cent mortgage," said a spokesman for AIB.

Not only can first-time buyers no longer bite the tracker mortgage cherry, many are finding it impossible to get the mortgage they need to buy a home. About one in five first-time buyers is offered a lower mortgage from lenders than the one they initially applied for, according to Dowling.

"If you are working in the construction sector, lenders deem your employment to be on a warning list," said Dowling. "There are plenty of banks offering 92 per cent mortgages, but people can't get them. If you're a plumber, for example, and your partner is working in the retail sector, you may only be able to borrow 80 per cent of the value of a property, even though you're both in permanent employment. Doctors and dentists, on the other hand, will be able to get a 92 per cent mortgage."

AVOID EXPENSIVE LENDERS

The main advantage of a tracker mortgage is that your lender must reduce your interest rate if the ECB rate falls. The same obligation does not apply to standard variable rate mortgages.

With interest rates falling, first-time buyers would do best to go with a standard variable rather than a fixed rate mortgage. Avoid Ulster Bank and First Active. At 5.6 per cent, a 25-year mortgage of €300,000 with First Active or Ulster Bank costs €1,869 a month. AIB, Halifax and NIB offer the cheapest standard variable mortgages. The monthly repayments on a 25-year mortgage of €300,000 work out at €1,736 under Halifax's 4.9 per cent standard variable rate, while AIB's 5 per cent rate costs €1,751 a month. As NIB's best rate (5.15 per cent) is available only to those borrowing up to 60 per cent of the value of their home, it will be beyond the reach of many first-time buyers.

After that, the best rates you'll get are from Bank of Scotland (5.25 per cent), Bank of Ireland (5.29 per cent), EBS (5.38 per cent) and NIB 5.4 per cent (for those borrowing between 60 and 80 per cent).

At 5.49 per cent, Irish Nationwide is the second most expensive lender, followed by Permanent TSB at 5.44 per cent.

Some of the rates above will not be available until November when the latest ECB rate cut is passed on.

DON'T GIVE UP IF YOUR LENDER HATES YOU

On October 14, Finance Minister Brian Lenihan unveiled the State's new Home Choice Loan. The loan, which will be sold by mortgage brokers, will be offered to first-time buyers who can afford to repay a mortgage but can't get the loan they need for a starter home from at least two mainstream lenders.

They will be able to borrow up to €285,000, depending on their income, and no more than 92 per cent of the property value. First-time buyers who are earning over €40,000 and have been in permanent employment for at least two years (or self-employed for two years) will qualify, and they can borrow up to five times their income. The loans cannot be used to buy second-hand homes. Brokers are not allowed to charge customers any fee. The interest charged on the Home Choice Loan should be a standard variable rate of about 5.4 per cent.

"The properties must usually have at least two bedrooms," said Dowling. "This is not sub-prime lending. The scheme is designed to help people in permanent jobs who can't borrow 92 per cent of the price of their home."

Some aren't so convinced. "There is no evidence that first-time buyers actually 'need' help," said Karl Deeter, operations manager with Irish Mortgage Brokers. "Most of them are holding off because the belief is that property prices have further to go."

All the same, for first-time buyers eager to snap up bargains in a falling market, the scheme could be the lifeline they need.