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Andy836, I of course meant that SVR/fixed rates of lending did not reflect the ECB rate. I obviously do not dispute that tracker mortages reflect those. But I and many other good people of Ireland obviously do not have these magic beans and our rates do not reflect the ECB rates. But tracker or...

I think the disagreement is over the definition of "loss-making", is it not? Your definition of loss-making only includes after its own costs of borrowing, period. But why? If trackers can only be made profitable when the bank has to rely on that "the majority of operating expenses, impairment...

The basic idea of central banks varying their rates is that those rates are reflected in lending rates of commercial banks. By varying the rates, they can restrict credit or stimulate economic activity, correct? Otherwise, what is the whole point of the ECB base rate changes? Our banks do not...

If I understood correctly some of the replies above, our banks during the boom did not pass the risks of defaults to insurance companies or to other investors by bundling and securitizing home loans and selling them elsewhere. This does not make any sense. I always thought they were so reckless...

Surely its net interest margin equals its net profit margin if they decide to cover their administrative and capital costs using funds from elsewhere, say from the capital markets unit, and if there are no defaults? So it is an internal accounting decision, “the costs” are not in-built in how...

Does anybody know if the fixed rate over ecb rate in trackers was approximately equal to the banks' profit margins or the profit margins could be higher (or lower)? That is, could the banks borrow money at the rates below the ecb base rate in the past? I struggle to understand how the banks...

Berneseduke, what interest rates you are talking here? The ECB base rate or the Irish banks' rates? The pundits in europe seem to think that the ecb rate will stay low near zero or so for a year maybe longer as the european economy is in a really bad shape still. Of course who knows, it may go...

I must say I am at a loss for words when I read the BOI staffers’ complaints that they also lost trackers, like a satirical film almost. One of these 1,800 could be the one who sold me a svr in mid 2008 and explained that trackers and svr are both variables, always vary together although svr...

Brilliant idea. I signed up and will urge people with svr that i know to sign up also. I only hope they publicise it enough so it becomes visible enough, a focal point for all captive customers so that the numbers are there. Like you guys I am sick of writing to minister Noonan's office and...

Yes, the ECB base not Euribor of course, thanks for correcting me. But this is not the point, the point is they themselves probably believed all variable rate products were to reflect their funding costs anchor, the ecb base rate, albeit svr at discretion not immediately. I would like to think...

And another point. I do not think I misunderstood what “at discretion” clause implied in the SVR contract, I feel rather misled. In fairness this is why I am so angry about the whole shebang ever since. I asked for a tracker, and the BOI officer who said it was unavailable (June 2008?) however...

Sarenco, nicely summarised and itemised. Oddly, the govt response is almost bipolar: we are pro-market and pro-business center-right government and we will not regulate bank rates for the fear or deterring new entrants and let the competition sort it out; at the same time we are anti-business...

And I wondered if one could design a system where borrowers and lenders could bypass intermediaries. We do it all the time on ebay these days. Hypothetically, if I could issue personal bonds at 2.5% over ECB rate for 20 years, and sell them to the current deposit holders who make 0.5% at best on...

Orka - thanks for confirming the logic of a captive audience making sense. I brood about it all the time, but then when I put it in writing, I am surprised how stark it is, that it can't be right, can it? And then other people on this forum read and confirm that in fact yes, this is in fact...

I am getting confused what one should and should not include each time. When arrears and bad debt is discussed, we cannot include trackers because they are insulated in their contracts and SVR are to bear the costs so that God forbid if we even mention that the costs of arrears are shared across...

cremeegg - really funny about golf club memberships, khe khe. I can imagine a loan contract that includes a clause that "Your interest rate under no circumstances would be lower than our costs of funds including the costs of 1 (one) annual golf subscription and 20% of the annual service for the...

I do not know the data, can't say about averages. Perhaps the average NIM you refer to is skewed by subprime lending rates. My evidence is anecdotal. I know three persons who hold mortgages in the states and none of them pays over 3%. One pays at 1.65 (or 1.75) 15 years fixed, and two pay at low...

I am still not clear how they arrive at 4.5% and not at say 3%. it is because they can aka "what markets will bear" right? There is no underlying calculation as to what goes into their interest calculation surely? Suppose their borrowing costs are at 0.7%. Since the interest they pass to...

Yes, but is my hypothetical of 120K v. 11K for the first 10 years correct in terms of numbers or I made a mistake? It can't be right, cant be that big. I understand the logic of borrowing from deposits and lending long. But I have a near zero interest from my deposit - the bank borrows my...

Hi Brendan, thanks. Apologies again for a possibly stupid question. I don't understand why should I forget compound interest and term length, why is it not relevant? Suppose there is a mortgage of 300,000 for 30 years, at 4.5%. From Karl's calculator: https://www.drcalculator.com/mortgage/ie/...