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Tracker customers in a fix as lenders alter rules

LENDERS are changing the rules for homeowners on lucrative tracker mortgages, a new survey reveals.

Most banks and building societies have shut off the option of allowing tracker mortgage holders to take out a fixed rate and then return to their tracker at the end of the fixed period.

People with trackers are on average around €200 a month better off than those with standard variable rate mortgages. This means there is a saving of €100,000 on a tracker over the life of the mortgage.

However, the majority of lenders are now refusing to allow people to keep their trackers if they opt to fix their rate for three or five years, a new survey carried out by the Irish Independent in conjunction with RTE One's 'The Consumer Show' reveals.

Customers of AIB, Halifax and Bank of Scotland, EBS and Haven, Ulster Bank, Bank of Ireland and ICS Building Society will lose their trackers if they opt for a fixed rate.

Permanent TSB will allow some of their customers to go back to a tracker if they fix, explaining that some mortgage holders have a clause in contracts allowing them to fix but later return to a tracker. However, customers who do not have the clause will not be able to keep their trackers.

Just three lenders will allow their tracker customers to go back to a tracker if they fix -- National Irish Bank, Irish Nationwide Building Society and KBC Bank. A spokesperson for the Financial Regulator last night said that lenders must ensure the implications of switching to a fixed rate and that costs were "clearly explained to customers".

Consumer watchdogs said it was clear that some lenders were not being clear and upfront with their customers.

"Lenders are very determined to take control through every means they can," Consumers' Association chief Dermott Jewell said.

New calculations by the Irish Brokers' Association estimate that trackers are now worth €100,000 to the 400,000 homeowners fortunate enough to have taken them out.


Having a tracker, where the rates are as low as 1.5pc, is now worth the equivalent of owning 94oz of pure gold.

Trackers have proved to be great value as the interest rates charged on them can only rise when the European Central Bank (ECB) rate rises.

The expectations now are that ECB rates may not rise for another two years.

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The Irish Independent/'Consumer Show' survey also indicates that a number of lenders charge a fee for allowing mortgage holders to fix their mortgage.

Ulster Bank charges €125. Permanent TSB charges €100. Irish Nationwide has approval in place to charge €190 for arranging a fixed-rate mortgage, but to date it has not charged this fee, the lender said.

  • See Charlie Weston's interview on 'The Consumer Show' tonight at 8.30pm on RTE One.

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