# 6% mortgage rates are back



## Jethro Tull (1 Jul 2008)

From the indo

Gonna put a lot of strain on people who are already over stretched. Surely we are gonna see many more case such as this one over the next while.


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## Camry (1 Jul 2008)

That can't be right.

Tom Parlon told the entire country that interest rates will always be 4% +/- half a percent.


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## Jethro Tull (1 Jul 2008)

Camry said:


> That can't be right.
> 
> Tom Parlon told the entire country that interest rates will always be 4% +/- half a percent.


 
Good auld Tom. how did the PDs ever go wrong with such visionaries at the helm


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## rmelly (1 Jul 2008)

Camry said:


> That can't be right.
> 
> Tom Parlon told the entire country that interest rates will always be 4% +/- half a percent.


 
Was this before or after joining the CIF?


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## efm (1 Jul 2008)

Jethro Tull said:


> Gonna put a lot of strain on people who are already over stretched. Surely we are gonna see many more case such as this one over the next while.


 
Whatever about the sympathy I may have for the women on the Gerry Ryan show I am shocked by the ill informed comment on that other website blaming the illusive _Vested Interests_ for the women's misfortune - are people really that daft?


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## ClubMan (1 Jul 2008)

efm said:


> blaming the illusive _Vested Interests_ for the women's misfortune - are people really that daft?


Good pun!


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## z109 (1 Jul 2008)

efm said:


> Whatever about the sympathy I may have for the women on the Gerry Ryan show I am shocked by the ill informed comment on that other website blaming the illusive _Vested Interests_ for the women's misfortune - are people really that daft?


Well the other options are to blame the couple for taking on the loan, shared blame between all of them, or no one is to blame.


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## rmelly (1 Jul 2008)

or blame Gerry Ryan?


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## efm (1 Jul 2008)

ClubMan said:


> Good pun!


 
Thanks - didn't think anyone else would get it though 



yoganmahew said:


> Well the other options are to blame the couple for taking on the loan, shared blame between all of them, or no one is to blame.


 
You blame the couple for taking a loan they couldn't afford - you don't blame a bank economist


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## ClubMan (1 Jul 2008)

efm said:


> You blame the couple for taking a loan they couldn't afford - you don't blame a bank economist


But what about the VIs?


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## whizzbang (1 Jul 2008)

rmelly said:


> or blame Gerry Ryan?


I think this is the safest approach.


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## Protocol (1 Jul 2008)

Thank God I opted for a 4.5% tracker, in light of these 6% SVRs.


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## ClubMan (1 Jul 2008)

Where/how did you get an _ECB _+ 0.5% tracker? Is your _LTV _very low or something?


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## Jethro Tull (1 Jul 2008)

you have to feel sorry for Austin Hughes, that feeling in his gut (about rate reductions) must be pretty painful now


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## Jonathan.OB (1 Jul 2008)

I warn you the Irish sub-prime crisis has yet to start. This is barely the beginning.


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## MrMan (1 Jul 2008)

Jonathan.OB said:


> I warn you the Irish sub-prime crisis has yet to start. This is barely the beginning.




Jeez we can hardly wait. It is starting to feel like some people are getting some perverse kick out of the possibility of Ireland's economy crashing.


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## rmelly (1 Jul 2008)

Jonathan.OB said:


> I warn you the Irish sub-prime crisis has yet to start. This is barely the beginning.


 
Well spotted there, poindexter.


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## Camry (1 Jul 2008)

MrMan said:


> Jeez we can hardly wait. It is starting to feel like some people are getting some perverse kick out of the possibility of Ireland's economy crashing.


 
I guess that depends on what sort of glasses you are wearing.

I see a well informed warning to people who might be reading the latest "things are stabilising, go out and get a big mortgage" declaration from a "leading economist", a "property expert" or somesuch.

What sort of glasses are you wearing?


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## rmelly (1 Jul 2008)

Camry said:


> I guess that depends on what sort of glasses you are wearing.
> 
> I see a well informed warning to people who might be reading the latest "things are stabilising, go out and get a big mortgage" declaration from a "leading economist", a "property expert" or somesuch.
> 
> What sort of glasses are you wearing?


 
The phrasing used was not that of a 'well informed warning' it has all the hallmarks of sensationalist journalism. For a start the use of the term 'sub-prime crisis' is misleading and aimed at causing panic. What percentage of the Irish market is sub-prime lending? As for 'This is barely the beginning', this is stating the obvious, anyone reading this post (or with any sort of awareness) knows that rates have increased over the last 6 months, with momentum increasing, with expected ECB rate increases to come.


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## MrMan (1 Jul 2008)

Camry said:


> I guess that depends on what sort of glasses you are wearing.
> 
> I see a well informed warning to people who might be reading the latest "things are stabilising, go out and get a big mortgage" declaration from a "leading economist", a "property expert" or somesuch.
> 
> What sort of glasses are you wearing?




Funnily enough I haven't come across much of the 'things are stabilising go out and get a big mortgage'. The glasses I am wearing are ones that allow me to look at things as they stand and make my own assessments on what is the next step for me. I don't think you can talk people who cannot afford it into buying beyond their means because they simply will not be able to get the mortgage to do so in the first place. 

I don't think we should sit back and point fingers and say I told you so I think we should get on with things and do everything necessary to avoid the absolute slump that some are predicting.


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## Camry (1 Jul 2008)

I find it pretty ubiquitous, although it is not the wall to wall coverage it was up to as recently as a few months ago. Just to show I am not making things up:

[broken link removed]

Just a taster:



> AFFORDABILITY for house-hunters is set to rise as *the property market is now balancing out.*


 
It is not about finger pointing. It is about getting some proper information (not spin, or in some cases out and out lies) out there for people to act on.

And to this point


			
				MrMan said:
			
		

> I don't think you can talk people who cannot afford it into buying beyond their means because they simply will not be able to get the mortgage to do so in the first place.


 
Surely that is what got this country into these problems in the first place. People were able to borrow beyond their means and were happy to do so because 99% of the information available to them said they would be mad not to.


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## Jethro Tull (1 Jul 2008)

MrMan said:


> I don't think you can talk people who cannot afford it into buying beyond their means because they simply will not be able to get the mortgage to do so in the first place.


 
Maybe not now but it has happened in the past few years to a lot of people. I really hate to think of how many people will have stories such as this woman in the next few years.

A lot of people would have bought houses etc in the period 05-06 with discounted trackers for anwhere between the first 12-36 months. As these are reset to trackers now (which seem to have a higher spread above ECB than had been the case) or standard variable mortgages (ditto) then I have a feeling this isn't the last of these types of call the likes of Gerry Ryan will have to field. Add in people who fixed for 2-5 years when the ECB started rising rates and it gets worse. 

I wonder how many people didn't fix or 'only' fixed for a relatively short period seeing as such luminaries as Austin Hughes were clogging the airwaves telling them ECB rate cuts were coming any time now.....


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## Jethro Tull (1 Jul 2008)

Camry said:


> Surely that is what got this country into these problems in the first place. People were able to borrow beyond their means and were happy to do so because 99% of the information available to them said they would be mad not to.


 
Come on now, youre forgetting that house prices only ever go up......


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## Treehouse (1 Jul 2008)

rmelly said:


> For a start the use of the term 'sub-prime crisis' is misleading and aimed at causing panic. What percentage of the Irish market is sub-prime lending?




To my mind, a large percentage. They may not be technically called "sub-prime", but there could well be a lot of _de facto_ sub-prime out there.

For example, could one not say that anyone on a 100% mortgage who borrowed above, say, 5x their salary, is "sub-prime"?

I think the point is that in Ireland, our sub-prime is part of the standard (prime) mortgage market. After all, what is sub-prime other than mortages given to people unlikely to be able to pay long-term: given the scandalous lending practices in this country in recent years that could describe a very large number of borrowers. Call it sub-prime or call it the vulnerable end of the prime market, it doesn't really matter. What matters is the %age of people with some reasonable chance of defaulting.


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## tester1 (1 Jul 2008)

I had to fight tooth and nail last yr to fix our mortgage for 10 yrs. 
Bank kept telling me I was mad basically. 
I would love to ring her up now and remind her of our conversations.


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## Camry (1 Jul 2008)

tester1 said:


> I had to fight tooth and nail last yr to fix our mortgage for 10 yrs.
> Bank kept telling me I was mad basically.
> I would love to ring her up now and remind her of our conversations.


 
I too had a "mortgage specialist" tell me that interest rates were coming down. Sure, it said so in all the papers.


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## MrMan (1 Jul 2008)

> It is not about finger pointing. It is about getting some proper information (not spin, or in some cases out and out lies) out there for people to act on.



I agree with you regarding getting the right info out there, I would just like that info to be the bare facts with no slant as to 'what might happen' because as you and jethro rightly say that was how the positive spin was used i.e here are the facts but things are going to getting better.



> Surely that is what got this country into these problems in the first place. People were able to borrow beyond their means and were happy to do so because 99% of the information available to them said they would be mad not to.



I agree that 100% never looked to a positive move and it turns out they weren't and people are still looking for them, but in the current climate we all now know that people are having to raise 10% + of a deposit to buy a property so positive spin isn't going to change that fact. 



> I wonder how many people didn't fix or 'only' fixed for a relatively short period seeing as such luminaries as Austin Hughes were clogging the airwaves telling them ECB rate cuts were coming any time now.....



Would you not agree that George, David & co are the ones clogging the airways for some time now?

Regarding that piece on Gerry Ryan, of course there will be more hard luck stories they make the best news, but I wouldn't be basing my opinions on the economy on what the producers on Gerry Ryan decide to put out over the airwaves.


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## Jethro Tull (1 Jul 2008)

Camry said:


> I too had a "mortgage specialist" tell me that interest rates were coming down. Sure, it said so in all the papers.


 
Was that really his logic??? Dear god, if thats whats advising the youth of today then we're in trouble (and i know all advisors aren't this clueless before I get people's backs up )

I know Austin almighty was shouting this from the roof tops but for a 'specialist' to be saying this, the mind boggles.


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## Jethro Tull (1 Jul 2008)

MrMan said:


> Would you not agree that George, David & co are the ones clogging the airways for some time now?


 
Indeed the more bearish are getting media time now, however i personally feel its too late. How many people mortgaged their futures on the advise of clowns like 'Comical' Austin Hughes and 'Desperate' Dan McLaughlin? I always remember a representative from EBS (about 3, maybe 4 months ago) telling people they were better off buying than renting according to her banks assumptions. Assumption 1 was that house prices would fall a further 10%. In that case the logical thing would be to wait for this 10% drop and then buy, making even more hay than she was saying could be made. However even this basic query was put to her, she was allowed to spout her 'buy now' mantra unopposed.

In any case I'm quite convinced that there's no way the likes of Hughes would possibly get into a debate with McWilliams and co as references to his blatant lying would expose him for what he is.

Thank god we have this to chart the bull thats been spouted so one day even the dogs on the street will know how VIs conspired to create the biggest con job in irish history (quote stolen unashamedly from a poster on another website)

Btw how many 'bottoms' have been called by now? (not directed at MrMan, just thinking out loud)


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## MrMan (1 Jul 2008)

> Btw how many 'bottoms' have been called by now?



I would guess almost as many as the peaks over the last ten years or so by Lee, McWilliams et al, were they liars when they constantly called a slump. The beauty for both sets of economists is that they can argue that they are never wrong, just slightly out with their dates.


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## MrMan (1 Jul 2008)

> Thank god we have this to chart the bull thats been spouted so one day even the dogs on the street will know how VIs conspired to create the biggest con job in irish history.



I know from your previous posts that you have very strong feelings regarding VI's and thats fair enough, but there needs to be a whole lot more accountability taken by individuals such as the lady on the Gerry Ryan show. People took on massive debt and you can say that it was on the radio in the paper that it was the right thing to do, but surely every individual has to look at their own circumstances and make some sort of informed decision as to whether or not they can service a loan over 30+ years, these are grown adults, they vote they drive surely they must be responsible for their own actions.

You can even move on from houses and look at all other forms of credit that have prospered in our 'boom' time. People paying back 5 year credit deals at 29%apr for tvs and kitchen appliances and driving cars they can't afford. It all comes back to personal responsibilty and the VI's couldn't do much without a very willing public.


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## Jethro Tull (1 Jul 2008)

MrMan said:


> I know from your previous posts that you have very strong feelings regarding VI's and thats fair enough, but there needs to be a whole lot more accountability taken by individuals such as the lady on the Gerry Ryan show. People took on massive debt and you can say that it was on the radio in the paper that it was the right thing to do, but surely every individual has to look at their own circumstances and make some sort of informed decision as to whether or not they can service a loan over 30+ years, these are grown adults, they vote they drive surely they must be responsible for their own actions.
> 
> You can even move on from houses and look at all other forms of credit that have prospered in our 'boom' time. People paying back 5 year credit deals at 29%apr for tvs and kitchen appliances and driving cars they can't afford. It all comes back to personal responsibilty and the VI's couldn't do much without a very willing public.


 
This is what I posted on that property pin thread and I stand by every word, its collective responsibility IMO

"Rock and a hard place situation here IMO. 

Of course personal responsibility has to come into play no one forced anyone to lie, beg, cheat and steal just to get a 100%, 40 year mortgage. 

However, many ordinary people wanted to have a home to call their own for them and their family. They knew long term renting was out (despite promises that legislation would change). So they listened to: 

1) the government, and in their naiveity believed that elected representatives would do whats best for them (the elctorate) and not whats best for themselves and their developers cronies. Vote FF 
2) So called experts on television. VIs allowed to spout sh!te and peddle their wares on national TV without anyone questioning their often dubious logic (or anyone who did was dismissed as a doom monger and most certainly not given the same air time). 
3) Their bank manager who lend them too much and may well have used the oft spouted line, 'Don't worry capital appreciation will take care of any worries you have' 
4) The Joneses. they'd gotten on the ladder maybe in an arera they didn't like but capital appreciation got them up a few rungs into a nice 3 or 4 bed in a decent area. Listening to the media and govt, believeing prices never go down they took the plunge also 

I definately think its a case of collective responsibility. People make their own decisions but in the face of such a campaign of VI/FF laddermania propaganda its very easy for rationality to go out the window 

As an aside, one thing i really hope comes out of this boom. FF will be exposed for what they are and willhave their credibility destroyed and their antics exposed. Although I'm not holding my breath"


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## cancan (1 Jul 2008)

People who didn't fully understand the lisbon treaty voted no.

Why they couldn't apply the same logic to the market and borrowing huge amounts of money is beyond me.

If you have basic job in a booming sector which can't last , no savings, and take on huge commitments, what do you expect to happen?

The same people who had any equity took out huge loans against it to fund a lifestyle that was not sustainable.

Is it sad when it goes wrong - yes.

Are people culpable to some degree in the mess they now find themselves in?
Hell yes.


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## shnaek (2 Jul 2008)

Jethro Tull said:


> As an aside, one thing i really hope comes out of this boom. FF will be exposed for what they are and willhave their credibility destroyed and their antics exposed. Although I'm not holding my breath"


That is possibly true, but none of the other parties could have their credibility enhanced by it either.  Which means the parties will stay at the same positions, relative to each other. Ireland is stuck in groundhog day!


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## groom (2 Jul 2008)

MrMan said:


> I would guess almost as many as the peaks over the last ten years or so by Lee, McWilliams et al, were they liars when they constantly called a slump. The beauty for both sets of economists is that they can argue that they are never wrong, just slightly out with their dates.



I often hear this levelled at DMcW to which I have heard him respond that he never called a slump rather he has pointed to there being signs of a bubble in existence. Can you provide a reference to anywhere that he calls a slump?


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## MrMan (2 Jul 2008)

I could say I heard him say it and use that as a reference, but I think you know what I mean. He had been predicting the end of the boom, the bubble bursting call it what you want long before anything happened, so he was wrong before he was right!


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## Brianne (3 Jul 2008)

Have to agree with posters who say that people have always to take personal responsibility for their own economic situation. 
However I feel that the economic mess that can occur do to people's irresponsibility or bad decisions becomes everyone's and it is here I think that we are badly let down. Maybe worldwide or at least Europe wide, banking practises in reckless lending need to be reassessed because like it or not if the system collapses, we all suffer. Have banks been reckless? Well ,when I see a huge morgage been given to a single twenty something with no permanent job , I think that is reckless.When I see college students with no income being offered credit cards I think that is reckless.

On our first morgage of 20,000 Pounds, we were paying back 280 Pounds a month  and to get it we had to have a good deposit, the criteria was two and half times my husband's salary and half mine. That was in 1981 and was with Irish Permanent. They told me that they didn't expect me to stay working and wouldn't give us an extra four thousand which would have allowed us to buy a new house and get a grant of three thousand. My salary was five thousand and with the stamp duty the house cost twenty three thousand nine hundred. In other words the house was approx four to five times my salary though the interest rates were awful.
In the last six years or so, you couldn't open a paper without being told about the property market. The Sunday Independent et al  contain what appear like factual articles  and are nothing more than advertisements. 
Tax incentives both to owners and investors continued to be given by the government. At one stage it looked to me as if we were importing builders to build houses for said builders to live in. 
To me it was a bit like the story of the Emperor's Clothes and mass behaviour at its most frenzied; fuelled by bank's , not investigated at all seriously by the media, instead aided and abetted by said media and the type of political thinking that can see nothing wrong in a situation that sees an ordinary house cost ten/ more times a multiple of the average wage.
I think that Jethro Tull has said it all!!1


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## Brianne (3 Jul 2008)

Have to agree with posters who say that people have always to take personal responsibility for their own economic situation. However I feel that the economic mess that can occur do to people's irresponsibility or bad decisions becomes everyone's and it is here I think that we are badly let down. Maybe worldwide or at least Europe wide, banking practises in reckless lending need to be reassessed because like it or not if the system collapses, we all suffer. Have banks been reckless? Well ,when I see a huge morgage been given to a single twenty something with no permanent job , I think that is reckless.When I see college students with no income being offered credit cards I think that is reckless. 
On our first morgage of 20,000 Pounds, we were paying back 280 Pounds a month  and to get it we had to have a good deposit, the criteria was two and half times my husband's salary and half mine. That was in 1981 and was with Irish Permanent. They told me that they didn't expect me to stay working and wouldn't give us and extra four thousand which would have allowed us to buy a new house and get a grant of three thousand. My salary was five thousand and with the stamp duty the house cost twenty three thousand nine hundred. In other words the house was approx four to five times my salary though the interest rates were awful.
In the last six years or so, you couldn't open a paper without being told about the property market. The Sunday Independent et al even have a property editor in which what appear like factual articles were and are nothing more than advertisements. 
Tax incentives both to owners and investors continued to be given by the government. At one stage it looked to me as if we were importing builders to build houses for said builders to live in. 
To me it was a bit like the story of the Emperor's Clothes and mass behaviour at its most frenzied; fuelled by bank's , not investigated at all seriously by the media, instead aided and abetted by said media and the type of political thinking that can see nothing wrong in a situation that sees an ordinary house cost ten/ more times a multiple of the average wage.


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## dodo (3 Jul 2008)

Can I ask what rate did you fix at for 10 years


tester1 said:


> I had to fight tooth and nail last yr to fix our mortgage for 10 yrs.
> Bank kept telling me I was mad basically.
> I would love to ring her up now and remind her of our conversations.


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