Homeowners who want to move house but are afraid to as they will lose their tracker mortgage might be offered a lifeline by two major banks.
It is reported that Bank of Ireland and Permanent TSB are considering offering this facility to borrowers who sell their property and have a balance leftover after the sale proceeds are used to clear a portion of the original mortgage.
As an example, if someone had a mortgage of €400,000 on a tracker mortgage, sold their property for €300,000, the balance €100,000 would be allowed to remain on the tracker rate by the bank under these proposals. It is reported that Bank of Ireland will allow the borrower to retain the tracker mortgage for a period of 5 years whilst Permanent TSB will allow the borrower to retain the tracker mortgage for the term for the mortgage. The homeowner would also be allowed to transfer this tracker mortgage onto a new property they buy which result in the borrower having 2 mortgages, the tracker mortgage and the new mortgage.
A tracker mortgage is a mortgage where the interest rate is linked to the interest rates set by the European Central Bank (ECB). Tracker rates are so cheap that someone who borrowed €300,000 on a tracker rate is paying €450 a month less than someone on a variable rate with the same-sized mortgage. It is a huge incentive for borrowers to retain their tracker as they are making considerable savings as compared to borrowers on variable rates. Ulster Bank already allow its customers who are moving home to keep their tracker rate on the existing balance owned on their home and transfer this to the mortgage on the new home.
At David Walley + Co Solicitors we have acted on behalf of many clients in respect of distressed property sales. We are property solicitors who have extensive experience acting on behalf of clients buying and selling property.