# Permanent TSB options coming off a 3 year fixed



## corklad (6 May 2010)

Just finished our fixed term for year at 4.99% with permo.

They've offered us these options

Tracker Variable Rate (ECB + 3.25%) : 4.25%
LTV Variable Rate: 4.15%
2 Year Fixed: 5.25%
5 Year Fixed: 5.75%
7 Year Fixed: 6.1%
10 Year Fixed: 6.1%

On paper it would seem to me that the tracker would be the best option of the variable rates in the medium term anyway since it would avoid permo deciding to put their rates up outside the ECB. 7 and 10 years are too long and the rates are just too high.

With the fixed rates, I guess the call then would be will the ECB raise rates 1% over the next 2 years, 1.5% over 5 years? I guess even if they do we'd still be saving money as the rates rise to meet these figures.

Opinions?


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## corklad (10 May 2010)

fuzzy10 said:


> those rates are fairly high.. im coming off a two year fixed next month with ptsb. those rates depress me!



I hear ya! What would you go for out of those?

Permo don't have the full rates on their site for existing customers but I found what looks similar here

(I don't have enough posts to post a link but it's the first result on google when you search for: john mullane permanent tsb)

It matches the rates I was offered.

The tribune wrote an article on the bad offers to existing customers yesterday also. 

(again google: banks heap misery on those in negative equity)

I'm not sure how exact they are though in their comment


> "At Permanent TSB, if you are a new customer you can get a  two-year mortgage loan fixed at 3.1%. If you are an existing customer  you would be paying 5.25%. If you are a new customer borrowing for five  years from PTSB, the rate is 3.7% and if you are an existing customer  you are going to be asked to pay 5.75%," he said.


From the chart it looks like the 3.1% and 3.7% are LTV <50%


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## csirl (10 May 2010)

> With the fixed rates, I guess the call then would be will the ECB raise rates 1% over the next 2 years, 1.5% over 5 years? I guess even if they do we'd still be saving money as the rates rise to meet these figures.


 
Your 2 year rate is 1% above the tracker rate, so you'd probably need the ECB to raise rates by 2% over the next 2 years to break even. Remember that if you take this rate today, you will be paying 1% more immediately. You will need this rate to be 1% below (not equal) at some stage to recoup this money i.e. (+1%) + (-1%) = 0%.


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## corklad (10 May 2010)

csirl said:


> Your 2 year rate is 1% above the tracker rate, so you'd probably need the ECB to raise rates by 2% over the next 2 years to break even. Remember that if you take this rate today, you will be paying 1% more immediately. You will need this rate to be 1% below (not equal) at some stage to recoup this money i.e. (+1%) + (-1%) = 0%.



That's pretty much my thinking too. There's no point in trying to predict the ECB in 2 years time and matching that now. You're losing money waiting for it to go up.


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## VOR (10 May 2010)

If I were you I would take the tracker rate for 2 reasons:
1) The standard variable is going to increase irrespective of ECB. It is well publicised that the banks want to increase margin.
2) If you take a fixed rate, PTSB will never offer you the tracker again. This is your only chance to take it. 

The tracker is the best of a bad lot really but it would be my choice.


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## corklad (11 May 2010)

It certainly is a bad lot alright. Here's hoping the ECB will stay low.


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## SISSOKO (12 May 2010)

Corklad,

Just wondering have you gone in and had a chat with them and tried to haggle.Those rates are cat , especially when they are offering 3.75% fixed to new customers.
I,ll be in the same boat next month so would be interesting to see what their
response would be ?


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## corklad (12 May 2010)

SISSOKO,

We got the mortgage through a broker and I've only been dealing with their mortgage customer service for queries so far. I'm wouldn't hold out much hope ringing them up and asking for a better deal. I might try though. If you don't ask you don't get...


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## corklad (13 May 2010)

Update: I rang a broker there and he said Permo don't tend to negotiate their rates, even with the brokers. So what we have we're probably stuck with.

His opinion was take the tracker as it'll avoid the bank hiking their rates on their own. He agreed it was the best of a bad bunch seeing as we can't switch. Am going to go with that.


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## seriams (14 May 2010)

corklad said:


> Just finished our fixed term for year at 4.99% with permo.
> 
> They've offered us these options
> 
> ...


 
Tracker seems very high. We went tracker in Nov last year with BOI, ECB + 1.25%


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## Shaggydog (24 Oct 2011)

Hi Corklad

Did you ever get any further with the TSB with this unreasable tracker rate. I have been offered something simular and my financial advisor has informed me that the rate offered is contratory to my terms and conditions of my mortgage. He says the rate of margin on the tracker can be NO HIGHER DURING THE LIFE OF THE MORTAGE than the margin taken during the original offer, IE our 5 yr fixed was 4.99%. The ECB base rate when we took the mortgage was 3.25%. The margin on the mtg was 1.74%. The ECB rate is now 1.5%. TSB can only charge us 3.24%(thats the ECB rate of 1.5% plus the orginal margin of 1.74%) on our tracker on NOT the 4.75% they are offering in their loan letter. Our terms state this on the back. ENSURE YOU CHECK THIS AND GO BACK.... YOU HAVE A CASE TO CHALLANGE AS THE TERMS WERE BROKEN if is this is the case.. good luck


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## corklad (25 Oct 2011)

Shaggydog said:


> Hi Corklad
> 
> Did you ever get any further with the TSB with this unreasable tracker rate. I have been offered something simular and my financial advisor has informed me that the rate offered is contratory to my terms and conditions of my mortgage. He says the rate of margin on the tracker can be NO HIGHER DURING THE LIFE OF THE MORTAGE than the margin taken during the original offer, IE our 5 yr fixed was 4.99%. The ECB base rate when we took the mortgage was 3.25%. The margin on the mtg was 1.74%. The ECB rate is now 1.5%. TSB can only charge us 3.24%(thats the ECB rate of 1.5% plus the orginal margin of 1.74%) on our tracker on NOT the 4.75% they are offering in their loan letter. Our terms state this on the back. ENSURE YOU CHECK THIS AND GO BACK.... YOU HAVE A CASE TO CHALLANGE AS THE TERMS WERE BROKEN if is this is the case.. good luck



Cheers for all that info! That's very interesting and even if it doesn't make a difference for me it might change things for someone else. 

I just had another look at my approval letter and pulled out the exact clause in it.









So they say it is the "tracker mortgage rate applicable to the balance outstanding on the loan". I'm not sure how much wiggle room there is there.

Is this similar to what you have? You said "Our terms state this on the back", what are they exactly? And please let me know the result you achieve. I, and others, would be highly interested as it would make a massive difference to repayments.


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## corklad (25 Oct 2011)

I'm wondering too are you referring to the back of the approval letter where they have some information. The title of the page is "Housing Loans Under Consumer Credit Act 1995" and they have tracker mortgage info in a box (does this come under that act?)








Item 1 there says the ECB rate "will not be exceeded during the term of the loan". I don't know if you could argue that even though I was offered an initial tracker and took a fixed instead that that tracker offer would be counted in this clause. 

Anyone out there have some idea or opinions? They would be massively appreciated.


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## jas376 (25 Oct 2011)

fuzzy10 said:


> those rates are fairly high.. im coming off a two year fixed next month with ptsb. those rates depress me!


 
The rates seem to me to be more favourable than what I would have expected.

I'm also  coming off a ptsb fixed rate (4.85%) soon and I was led to believe that I would be offered rates of around 6%.

I was all set to move to another lender but now maybe I won't have to if they offer me these rates of between 4% and 5%, which I can just about afford.

Have ptsb reduced its rates recently or was I misinformed?

You've cheered me up a little, Corklad. Thanks for that!


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## corklad (26 Oct 2011)

jas376 said:


> You've cheered me up a little, Corklad. Thanks for that!



I'm not sure you should be that cheerful. The variable rates have gone up a fair bit since then. The current tracker we took is now at 4.75% also. You might post the options you have when you get them.


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## corklad (26 Oct 2011)

Shaggydog said:


> He says the rate of margin on the tracker can be NO HIGHER DURING THE LIFE OF THE MORTAGE than the margin taken during the original offer, IE our 5 yr fixed was 4.99%. The ECB base rate when we took the mortgage was 3.25%. The margin on the mtg was 1.74%. The ECB rate is now 1.5%. TSB can only charge us 3.24%(thats the ECB rate of 1.5% plus the orginal margin of 1.74%) on our tracker on NOT the 4.75% they are offering in their loan letter.



Shaggydog, I was having another read over this and I think I understand better what you are suggesting there.

I think you are clutching at straws though. That 1.74% margin that the fixed rate was over the ECB doesn't seem relevant to me. That's never a tracker margin - that's just the rate they offered on the fixed period. Nowhere in the T&Cs does it say that that is margin that cannot be exceeded. 

Of course, I'd be very interested in seeing the outcome you come up with out of this (and please let us know) but I can't see you getting anywhere.


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## Shaggydog (8 Nov 2011)

Hi Corklad

We have gone to our solicitor with this. We are waiting to see how they calculated the inital fixed rate of 4.99%. They dont just pluck figures out of the sky when working these out. They work everything off the ECB rate plus a margin. The ECB BASE RATE AT THE TIME WAS 3.25%.. The MARGIN they are now looking for on the tracker is 3.25%. Our advise is that we took a tracker mtg in Nov 2006 with the option of fixing for 5yrs at 4.99%. The CCA states that the MARGIN RATE cannot be exceeded during the term of the loan. The MTG is a TRACKER as far as we are concerned, we just opted to fix the first 5 yrs. If this is the case the BIGGEST MARGIN the Bank can take is the margin they offered at the time which in our case was 4.99 less 3.25 = 1.74%.. The Tracker rate at the time was .5% above ECB so according to our advise they cannot increase that and at worst it cant be beond the initial MARGIN between our fixed and the ECB of 1.74%.. Its not a new mortgage offer as its still the same mortgage. All inital loan offer info should still apply. The Detail is to see how they intially worked out the rate.. A current MTG advisor has told me that in their company this is the case...


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## webbs (9 Nov 2011)

Hi Shaggydog

Would you keep us updated here on how you are getting on, as we are in a similar position with a margin of more than 3% on our tracker mortgage that we took out fixed for 3yrs back in 2007


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## corklad (9 Nov 2011)

Shaggydog said:


> We are waiting to see how they calculated the inital fixed rate of 4.99%. They dont just pluck figures out of the sky when working these out.



That will be the key to your case



Shaggydog said:


> The CCA states that the MARGIN RATE cannot be exceeded during the term of the loan.



I've been looking through the CCA (http://www.irishstatutebook.ie/1995/en/act/pub/0024/print.html) and I don't see anything about tracker mortgages or margin rate calculations. Have you more information on this?


Also, I my case I didn't actually get an official offer of different options at the start of the morning. The broker sent on a list of rates and LTVs from PTSB and I just told that broker which one I wanted - the 4.99% 3 year fixed in my case. Incidentally that list I got didn't include a tracker rate. 

Another question for you, did you go straight on to that fixed at the start of the loan? Not a tracker first and then moved to fix?


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## Fiskar (13 Nov 2011)

ShaggyDog

In same boat as you, coming off fixed next Feb. Have a meeting with the PTSB in Dec where I intend to raise this margin issue.
Below are the rates applicable in March 2007. If I could attach the html file I have on my USB it would be clearer to read but the rates are clear below.

Please let us know how you fare with the margins with your solicitor.

 New Business


The interest rate on an existing permanent tsb loan may vary from the rates quoted on this page HOME LOANS - Cost per EUR 1000

Fixed Interest Rates    Gross Rate        APR               over 20 yrs over 25 yrs over 30 yrs
1 Year Fixed (<500K)  4.69%               4.7%                6.42             5.66      5.18
1 Year Fixed (1M+)     4.69%               4.6%                 6.42             5.66     5.18
1 Year Fixed (500K-1M)4.69%             4.6%                 6.42             5.66     5.18
2 Year Fixed (500K-1M)4.99%             4.7%                6.595.845.36
2 Year Fixed (<500K)4.99%                4.7%                6.595.845.36
2 Year Fixed (1M+)4.99%                   4.7%                6.595.845.36 
3 Year Fixed (<500K)4.99%               4.8%                 6.595.845.36
3 Year Fixed (500K-1M)4.99%             4.8%                6.595.845.36
3 Year Fixed (1M+)4.99%                   4.8%                 6.595.845.36
5 Year Fixed           5.15%                  5.2%                6.685.935.46
10 Year Fixed          5.15%                 5.3%                 6.685.935.46 

Variable Interest Rates              Gross Rate             APR                 over 20 yrs over 25 yrs over 30 yrs
Standard Variable Rate              5.10%                   5.2%                 6.655.905.42
Tracker (LTV<=80%/1M+)         4.30%                   4.6%                 6.215.444.94
Tracker (LTV<=80%/500K-1M)   4.30%                   4.6%                  6.215.444.94
Tracker (LTV<=80%/<500K)      4.35%                   4.6%                  6.245.474.97
Tracker (LTV>80-95%/1M+)       4.30%                   4.6%                  6.215.444.94
Tracker (LTV>80-95%/500K-1M)4.45%                   4.7%                   6.295.525.03  
Tracker (LTV>80-95%/<500K)    4.45%                  4.9%                 6.295.525.03
Tracker (LTV>95%/1M+)             4.50%                 4.6%                    6.325.555.06
Tracker (LTV>95%/500K-1M)      4.65%                  4.8%                    6.405.645.15 
Tracker (LTV>95%/<500K)         4.85%                   5.0%                   6.515.755.27
OnePlan Equity Release Rate        5.10%                   5.2%                   6.655.905.42 

RESIDENTIAL INVESTMENT PROPERTY - Cost per EUR 1000
Fixed Interest Rates          Gross Rate         APR                 over 15 yrs over 20 yrs
1 Year Fixed (<500K) RIP   4.69%              4.7%                 7.746.42
1 Year Fixed (500K+) RIP   4.69%              4.6%                 7.746.42
3 Year Fixed New Business 4.99%              5.0 %                7.906.59
5 Year Fixed                      5.15%             5.2%                  7.986.68

Variable Interest Rates                Gross Rate            APR                  over 15 yrs over 20 yrs
Tracker (LTV<=80%/500K+) RIP  4.50%                 4.6%                 7.646.32
Tracker (LTV<=80%/<500K) RIP  4.55%                 4.6%                 7.676.35
Tracker (LTV>80%/500K+)   RIP  4.65%                 4.8%                  7.726.40
Tracker (LTV>80%/<500K)   RIP  4.85%                 5.0%                  7.836.51
Variable Rate                              5.10%                 5.2%                    7.966.65 



Mortgage options are provided by *permanent tsb*. Life options are underwritten by Irish Life Assurance plc. Insurance options are underwritten by Allianz Ireland plc. *permanent tsb* is a trading name of Irish Life & Permanent plc which is regulated by the Financial Regulator and is a tied insurance agent for Irish Life Assurance plc.

Irish Life & Permanent plc is a limited liability company registered in Dublin under No. 222332. The company's registered office is: Irish Life Centre, Lower Abbey Street, Dublin 1.


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## corklad (30 Nov 2011)

Shaggydog said:


> Hi Corklad
> 
> We got a letter back from PTSB telling us they were looking into our rate and that they would get back to us in 14 working days and gave us the Omb man details if we were not satisfied. So pending the outcome of that we will see if we need to go there.
> 
> We have a case so lets se what happens...




Cheers again for the update. Keep them coming.

I actually was on to PTSB customer care yesterday and asked the girl I was talking to if she could explain to me how they calculated the ECB + 3.25% tracker rate when I came off the fixed last year. She first of all said it was to do with the LTV of the mortgage and the rate of the ECB at the time of the initial mortgage. I could sense she wasn't sure so she put me on hold to clarify. When she came back she said it was the LTV and ECB rate at the time of the fixed period ending. She sounded like she really didn't know exactly so I asked her could she put me on to someone who did know more.

So then her supervisor came on the line. His explanation was that even though PTSB removed tracker offers they still were running a couple of tracker rates internally for people like me whose contract demanded one coming off a fixed. These tracker margins he said were constantly changing due to the cost of funding for the bank. So when I finished the fixed the 3.25% was the tracker rate they had for my LTV (92%). He said there may also have been another (lower) rate for <80% LTV, but that was the one I was offered. It was basically the bank's interpretation of the terms and conditions of what happens at the end of my fixed period:



> 4. General mortgage loan approval condition 5 "conditions relating to fixed rate loans" applies in this case. The interest rate specified above may vary before the date of issue of the loan. On expiry of the rate period, and where the applicant chooses the option of a tracker mortgage interest rate, the interest rate applicable to the loan will be the tracker mortgage rate appropriate to the balance outstanding on the loan at the date of expiry of the fixed rate period. In the absence of instructions from the applicant at the expiry of the rate period, the interest rate for the loan will be the tracker mortgage rate applicable to the balance outstanding on the loan, at the date of expiry of the fixed rate period and as may be varied in accordance with variations to the European Central Bank refinancing rate.


or more specifically this bit



> On expiry of the rate  period, and where the applicant chooses the option of a tracker  mortgage interest rate, the interest rate applicable to the loan will be  the tracker mortgage rate appropriate to the balance outstanding on the  loan at the date of expiry of the fixed rate period ... and as may be varied in accordance with variations to  the European Central Bank refinancing rate.


I then asked him about the tracker margin being exceeded (basically the discussion we are having here)

I first asked if I was offered a 1% tracker, say, on my initial offer but chose to take the fixed rate, whether that tracker margin is the margin that cannot be exceeded as stated by the CCA. His answer to this was that the loan I chose was the fixed so even though the tracker may have been offered this does not come in to play and the margin over the ECB was the one offered when the fixed ended.

Next I asked about the fixed rate and whether the ECB rate at the time came in to play on this calculation. His answer here was that the ECB rate would not have been directly involved in the calculation of that fixed rate percentage, but it obviously "would have influenced the rate" as it would have been involved in the cost of borrowing calculations for the bank. I'm curious to what they say to you about this calculation as it is the nub of your argument. 

There wasn't much more arguing or discussion I felt I could do at that point but at least I got their opinion out of them. 

Thoughts/opinions/suggestions welcome...


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## Fiskar (30 Nov 2011)

Very interesting Corklad.

Seems to me they are dreaming up figures as they go along. 
Am due off a fixed in Feb with same issue. Initially they said 6.7% (the SVR), when I mentioned that it was a tracker he asked how did I know! When I said it is in my loan approval letter he said the rate would be 4.85% (due to be 4.5% with the ecb drop) or a margin of 3.25%. I aksed him to clarify the margin and that is what he indicated. As with you he went away twice to consult. 

Seems to me if this issue of margin and rate were probed that we could be aligned correctly with the normal trackers. 

Any idea who would be able to determine the legitimacy of these margins?


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## corklad (30 Nov 2011)

I was just going though my documentation again with a fine tooth comb and spotted some more details at the end of my approval letter, after the conditions.









> At the end of the fixed rate period you may exercise an option to contract for another fixed rate period or to move to the SVR or to a Tracker Mortgage Rate. If a Tracker is chosen the loan will become a tracker mortgage loan and the rate applicable will be rate appropriate to the balance outstanding on the loan at the time of the expiry of the fixed rate period and as [such?] may be varied in accordance with variantions to the ECB rate




This may give them free license to choose the tracker rate they like...

@Shaggydog are all of these conditions I've posted the same in your approval letter at the start of the mortgage? Or do you have something different that may give you more leverage?


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## corklad (30 Nov 2011)

Fiskar said:


> Am due off a fixed in Feb with same issue. Initially they said 6.7% (the SVR), when I mentioned that it was a tracker he asked how did I know! When I said it is in my loan approval letter he said the rate would be 4.85% (due to be 4.5% with the ecb drop) or a margin of 3.25%. I aksed him to clarify the margin and that is what he indicated.



So it seems their 'internal' tracker rate margin is still at 3.25%. 



Fiskar said:


> Any idea who would be able to determine the legitimacy of these margins?



I'm not sure really. I got the customer service girl to admit yesterday that they don't know anything or have anything to do with rate calculation. So it's a bit fruitless ringing them - unless they put you on to another department, which I'm guessing they won't do. 

It was quite funny too when she initially was explaining (incorrectly) that the tracker margin of 3.25% was the tracker for a 92% LTV at the time the mortgage was taken out (2007). I said it was common knowledge that most people around that time were on 1% trackers and 3.25 is a bit more than 1. That really confused her.


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## Emmiou (21 Feb 2012)

Yes Shaggydog, please update us, I'm in the same position with PTSB.


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