Warning over tracker offers by banks

TRACKER-MORTGAGE holders have been warned not to rush into accepting discounts from their banks in exchange for moving to a different type of loan.

Banks are suffering huge losses on tracker loans and the Irish Brokers Association (IBA) has forecast that banks will consider “break discounting” large low margin tracker loans to get rid of them, similar to the experience in the USA in 2008 and 2009.

Offers by banks in this climate to switch lenders or change the terms of a mortgage should be given close consideration and a long term cost-benefit analysis should be carried out, according to IBA chief executive Ciaran Phelan.