20 Jun, 2019

What is a Tracker Mortgage?

A Tracker Mortgage is a product that is no longer offered in the Irish market but was common-place up until c. 2008 when it was with-drawn by most banks. The unique point of a tracker mortgage is that the interest rate is linked to the European Central Bank (ECB) Interest rate in that customers interest rates are a certain % plus ECB rate e.g. if the ECB rate is 1% and the customer has a rate of 0.75% above ECB then the customer’s rate will be 1.75%. If the ECB rate changes downwards then the customer’s interest rate will go down by the same % and likewise upwards.
In almost all cases if a mortgage holder has a tracker mortgage they should not remortgage as another mortgage provider will not be in a position to offer a tracker rate and variable rates with the other lenders are currently higher than tracker rates presently.

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