# Can't switch mortgage providers - negative equity - very annoyed?



## Kluivert (14 Jan 2010)

2 Yr Fixed mortgage with PTSB is up now at the end of the month. 

Paying 5.2%. 

I thought great finally will be able to move to cheap rate with another bank. 

Only for AIB and BOI to turn around and state that in order to switch the LTV must be less than 92%/90% respectively. 

I was hoping to apply for BOI 2 yr fixed at 2.7% and save some money. 

I am very annoyed. 

I tried explaining that my current repayments every month is 1k and we pay 1250e each month. 

On top of than we're saving 500e per month.

We are currently servicing other personal loan repayments - Car Loan and small personal loan. 

I am in a professional position in a permanent job and O/H is a nurse in a permanent job. 

I explained surely are repayment capacity should be taken into account - NO!.

Credit policy states LTV less than 90% and thats just that. 

Rang an estate agent LTV works out around 125%. 

Is there anything I can do?


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## moneyhoney (14 Jan 2010)

*Re: Cant switch mortgage providers - negative equity - very annoyed?*



Kluivert said:


> Is there anything I can do?



In a word no. The reason no-one will lend you the money is because the asset is worth less than the mortgage & in the event that you defaulted on the mortgage, the asset wouldn't be worth enough for them to re-coup their losses.


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## Kluivert (14 Jan 2010)

*Re: Cant switch mortgage providers - negative equity - very annoyed?*

I understand the asset is not worth what we bought it for. 

But surely if one can service their repayments and there is a proven history of that and considered a low risk of defaulting, then loans should be granted.


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## dereko1969 (14 Jan 2010)

*Re: Cant switch mortgage providers - negative equity - very annoyed?*

No they shouldn't. 
What's a low risk of defaulting? Has no-one in your 'profession' been made redundant? What if you or your other half have a serious illness?
Stop saving and pay off your loans as you are paying more in interest on the loans than you are earning on your savings.


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## kaplan (14 Jan 2010)

*Re: Cant switch mortgage providers - negative equity - very annoyed?*

@Kluivert
You have become captive of your lender - an outcome of the banking crisis - Your situation is shared by tens of thousands of others - what's more as you cannot switch you are also captive of your lenders power to increase its margin - of coure the advise to pay down your mortgage only makes sense if you can afford to. I suspect there will be a growing concern as people realise they will now have to pay higher rates on their mortgages which they cannot switch to cheaper providers (if there are any) - there's a risk of abusive profit taking by banking unless controlled for - but as yet this problem hasn't been articulated at Gov policy level


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## Brendan Burgess (14 Jan 2010)

You can't switch mortgages until you are down to 90% LTV. 

However, have you checked your mortgage documentation? Is there any chance that you will automatically be switched to a cheap tracker rate? 

Brendan


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## Kluivert (14 Jan 2010)

Firstly thanks for your advise so far. 

I checked the PTSB mortgage pack and fixed rate reverts to Tracker + Current Margin. Got the letter from PTSB early this week and this option works out at 4.25%*

*Letter states Tracker will never be more than 3.25% over the current ECB Rate hence 1% ESB + 3.25% = 4.25%. 

LTV Variable is 3.65%.  

2 Yr Fixed is same at 5.25%. 
3 Yr Fixed is 5.65%. 
7 or 10 Yr Fixed is 6.1%. 

If this is an issue afflecting ten of thousands of people its time it was brought to the front. Does any know if this is a pointer being looked at by the law reform commission regarding personal debt.


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## Brendan Burgess (14 Jan 2010)

No but feel free to raise the general issue and what might be done in the forum on Negative Equity/Dealing with Debt


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## R196 (14 Jan 2010)

my fixed rate of 4.75% with PTSB just ended in December.  they switched me to a tracker - ECB + 1%. my repayments are down by almost 400 euro per month.


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## Kine (14 Jan 2010)

R196 said:


> my fixed rate of 4.75% with PTSB just ended in December. they switched me to a tracker - ECB + 1%. my repayments are down by almost 400 euro per month.


 
Make sure your TRS is being correctly calculated, I came off a 5.29% fixed onto an ECB + 1.15%, mortgage dropped about €600. However, my TRS has now decreased (due to the lower interest amount) so my repayments have gone back up by €200.


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## monica2 (18 Jan 2010)

Hi all i am currently a mortgage holder with bank of scotland ireland on a fixed rate until mid 2011,they have raised rates to extremley high levels and i am wondering does anyone know if i will pay these rates when my term is up or if there is a existing customer cheaper rate?


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## paulpd (18 Jan 2010)

I had the same concerns but came across this on the BOS site so hopefully we should be ok.

"
*29.09.09 - Statement by Bank of Scotland Homeloans*

Bank of Scotland Homeloans would like to clarify the following in relation to its fixed rate mortgage accounts: 

Bank of Scotland Homeloans has circa 34,000 mortgage customers. Of those, approximately 3,500 customers are on a fixed rate.
The 3,500 customers who took out a fixed rate mortgage with Bank of Scotland Homeloans prior to July 2009 will roll onto the highly competitive variable rates of 2.50% gross or 2.75% gross when their fixed term ends.
In July of this year, the planned variable roll off rate increased for new business. Bank of Scotland Homeloans has accepted two new customers since July of this year who will roll off their fixed rate mortgages between July 2011 and July 2014. These will roll onto a planned variable rate of 6.00% gross – this planned rate may go up or down at any time.
The Bank of Scotland Homeloan fixed mortgage rate process is fully transparent and all customers are advised of a roll off rate at the time of taking out their mortgage - so customers have an informed choice to make when they take out the mortgage.
The impression given by reports today that existing customers are being penalised is misleading and disingenuous. Of the 34,000 Bank of Scotland Homeloan mortgage customers, only two may roll onto a planned variable rate of 6.00% gross. "


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## TonyD (18 Jan 2010)

I doubt they will be getting any new customers with those extortionate rates(BOSI):

*Fixed Rate Period* 
*Gross Rate* 
*APR** 
1 Year Fixed Rate 
6.35% 
6.21% 
2 Year Fixed Rate 
6.80% 
6.36% 
3 Year Fixed Rate 
7.15% 
6.57% 
5 Year Fixed Rate 
7.75% 
7.12% 


*Description* 
*Gross Rate* 
*APR** 
LTV Variable Rate - Loan to Value <= 80% 
5.90% 
6.06% 



@monica - I would get a copy of the fixed rate agreement/loan offer you signed and see what rate you roll-off onto.


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