Should I Switch From a Tracker Mortgage

by | Nov 1, 2022 | Mortgages, Back to Blog

It is always essential to have all the facts, this will allow you to make an informed decision on whether to switch from your tracker mortgage to a fixed rate or not.

This 4-step plan will help you make this decision regarding Switching from Your Tracker Mortgage in Donegal.

Oh, the misery

Should I Switch From a Tracker Mortgage | Advice First Financial

Mortgage misery continues for Donegal tracker rate mortgage holders and over Ireland thousands of homeowners as a hefty 0.25% interest rate hike was announced by the ECB last week.

In response to this, all lenders will increase all Tracker rate products in the nest few weeks.

In Ireland, there are close to 250,000 tracker rate mortgage holders that will be affected. So far, most lenders have not increased the standard or managed variable rates yet, this is likely to change shortly though.

People whose mortgages were sold by the banks and are now controlled by the likes of finance group Pepper or Start Mortgages have seen their tracker and their variable rates rise.

This is the 6th rise in ECB rates since the summer 2022

This week’s decision alone could account for an extra €20 monthly on the average mortgage in Donegal, with more hikes not ruled out before the end of 2024.

The governing council of the ECB feels it had no choice but to impose interest rate increases as it tries to contain inflation running at five times its target, a Reuters poll found. Eurozone inflation has soared.

So, the question now is whether tracker rate customers should fix their rate or not.

For us, the answer to this question will depend on 2 things,

  1. the margin of the mortgage.
  2. Whether the lender will give you back the tracker rate following a fixed period.


If your mortgage has a low margin, of 0.6% points to 0.75%, then it could still be worth holding onto your tracker.

However, if your tracker mortgage is at a higher margin, say 1.25 % or above, then giving up your tracker in favour of a fixed rate is worth having a conversation over.

As we always advise, people on trackers should take expert advice at this stage, as the steps they should or should not take will differ for everyone depending on how much they owe, the term remaining, their income, and other personal factors.

Lots of Donegal mortgage holders have opted to fix their rates to lock in at interest rates as low as 2.5pc. However, those trying to switch lenders to get the current lower fixed rates have been frustrated by massive delays in lenders processing their applications. it is extremely frustrating currently.

4 Step action plan before switching from your tracker rate

So, to make this important decision, it is essential to have all the facts, this will allow you to make an informed decision on where to switch to a fixed rate or not. This 4-step action plan will help in making this decision.

  1. Know your current margin. That is ECB rate + margin. Your latest mortgage statement will show this.
  2. Enquire with your current lender whether they will allow you back to your tracker rate if you where to fix for a period now.
  3. Know your mortgage balance and remaining term.
  4. Contact a trusted Mortgage Advisor/ Broker in Donegal to discuss your best options.

If you have questions or need advice on whether you should switch from a Tracker Mortgage, call 074 9103938 or email now.

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