Are you entitled to a tracker mortgage? Homeowners urged to check their contracts

Are you entitled to a tracker mortgage? Homeowners urged to check their contracts

HOMEOWNERS are being urged to check their mortgage contracts to check whether or not they are entitled to be on valuable tracker deals.

A number of homeowners who chose to fix the rate on their mortgage when they purchased their property may be entitled to revert to a tracker when the fixed period comes to an end.

Trackers offer the best value in the market for mortgages, especially with the European Central Bank expected to reduce their rates a further three times between now and next March.

Frank Conway of MoneyCoach has advised people to dig out their contracts and check the fine print. Some 200,000 people have fixed rates.

Most of those coming to the end of a fixed rate deal end up on a variable rate. Variable rates are far higher than tracker rates, meaning that a homeowner who can get back on to a tracker could save hundreds of euro.

Those on variable rates can often end up paying up to €250 a month more in repayments for the same sized mortgages than those on trackers.

Large numbers of homeowners who took out four and five-year fixed rate deals in 2006 and 2007, before trackers were withdrawn, have contracts that allow them to revert to a tracker once the fixed period is up.

“There are likely to be mortgage holders who took out four and five-year fixed rate deals who may have forgotten about the terms of their contracts.

“Some may be about to receive a windfall in lower monthly repayments but it is important they are aware of this and lock into the lower repayments,” Mr Conway told the Irish Independent.

Between 2006 and 2007, four and five-year fixed rate mortgages were costing between 4.5pc and 5.5pc. For fixed-rate mortgage holders who are now due to roll back to tracker deals, the monthly repayments on a €250,000 mortgage will fall from about €1,266 to about €988.

Mr Conway said it was important that mortgage holders check their mortgage contracts to see if they can revert to a tracker mortgage.

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