Tuesday 16 January 2018

Alan Ahearne: Banks need a solution to tracker dilemma as economy is suffering

Remember the Financial Regulator's ad in the bubble years in which a guy stands up in a bus and admits that he doesn't know what a tracker mortgage is. If he had bought a property around that time using a mortgage product other than a tracker, he would now sorely regret that lack of knowledge.

Compared with other mortgage products, trackers have been a boon for borrowers – and a bane for banks, taxpayers and the economy.

The average interest rate on a tracker is about 1.25pc. This assumes a margin of 1pc over the ECB's rate and compares with an average rate on a variable-rate mortgage of about 4.5pc.

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