# Mortgage rate 'war'



## dave2015 (12 Dec 2017)

Feels like a lull in the rate reductions compared to earlier in year when seemed like some bank was reducing every few weeks, have we reached the bottom or more likely banks are pausing for assessment? Has it something to do with the cash incentives, is there still a likely change there to come down the line?


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## renter45 (12 Dec 2017)

I wonder will we see more sub 3% terms for 7 or 10 years next year as a final push for banks to lock in customers.


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## qwerty5 (12 Dec 2017)

It's probably a bad time of the year now. Any business I've worked in didn't make any major changes in December. Everybody's thinking about Christmas, and probably wouldn't be thinking about switching.


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## cliqueentour (13 Dec 2017)

Aren't the cashback lump sum offers being made illegal?


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## WorstPigeon (19 Dec 2017)

AIB did one a couple of months ago, as did Ulster Bank. December’s probably not a good time of year for it; not that many people buying, or paying attention.


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## Donnie (16 Feb 2018)

Its mid Feb now and the variable rate reductions have remained static and very little talk about the proposed Mortgage rate Bill for a number of months now and it may be a dead duck now at this stage.

So with that in mind what are peoples view about the variable rate environment in Ireland over the next few years and if there will be more rate reductions over the coming years? ECB rate is at a all time low and will remain flat probably for a few further years so Irish lenders in theory in theory should not increase variable rates for a year or two?

On a nice variable rate at the mo with Ulster Bank of 3% but thinking of fixing with UB as there are some very appealing rates. I am eligible for a fixed rate for 4 years with UB at a rate of 2.6%.

Just wondering what other peoples thoughts are about the future 2-3 year outlook on the variable rate environment ?


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## Gordon Gekko (16 Feb 2018)

In my view, it’s dependent on the arrival of a new entrant; as things stand, it’s hard to see the current bunch delivering what’s really required which is a sub-2% rate. I pay 2.5% and I can’t see myself losing out.


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## Boyd (17 Feb 2018)

On 2.95% variable myself with AIB. Can't really see it going down much more. I'm hoping it'll remain static until 2020 and then ill reconsider my approach.


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## RedOnion (17 Feb 2018)

Personally, I be jumping at the 2.6% fixed rate.
I believe there will be rate reductions this year, but I can't see variable rates for the lowest LTVs going under 2.5%. the competition will be for market share of new business which is at the 80 - 90% LTV, so I'd expect those rates to drop below 3%.

In the current rate cycle, wholesale rates are only going to increase, so if we do see mortgage rates drop it will cost you little or nothing to break out of the fixed rate early.


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## Sarenco (17 Feb 2018)

Agree with Red. 

I would be surprised if AIB don't make another move before the end of March - they are losing too much market share to just stand still.

Incidentally, I think the FF mortgage bill is dead in the water.  It's a shame that they wanted to give the Central Bank price-fixing powers rather than simply trying to provide a degree of protection to borrowers that cannot switch provider.


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## gnf_ireland (18 Feb 2018)

RedOnion said:


> but I can't see variable rates for the lowest LTVs going under 2.5%.


Agree on this. This is predominately switcher market territory and we simply don't have an active enough market to warrant it, although I would have thought a headline rate of 2.3% may be good marketing material for a bank !!



Sarenco said:


> I would be surprised if AIB don't make another move before the end of March - they are losing too much market share to just stand still.


The question is whether they will cut rates of some up with some other novel approach to do this - for example a semi-offset mortgage for say 5-10% of the mortgage balance etc? I am not sure rates alone work at the moment given how successful cashback has been



Sarenco said:


> I think the FF mortgage bill is dead in the water.


Have to agree with you here. I don't see anything on the horizon that really makes this look like it going to happen any time soon


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## Paul Reilly (19 Feb 2018)

Where are ye getting all these low rates

My Permanent TSB managed Variable Rate of 4.3% can be reduced to 4.2% if I go to a Fixed Rate (which im not, yet anyways)

But I see you guys are quoting 2.6 and 3%.

Then I look at report on RTE website and they are quoting 3% fixed rates and variable rates but dont mention permanent TSB rates in their report.

Why is this?


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## Sarenco (19 Feb 2018)

Paul Reilly said:


> Where are ye getting all these low rates


https://www.askaboutmoney.com/threads/fixed-rates-best-buys.204420/

PTSB's fixed rates are not competitive - switch provider if you can.


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## Paul Reilly (19 Feb 2018)

cant as of yet as LTV >90% and prob still negative.

But why didnt RTE print them on their report. Surely PTSB are as big a mortgage provider as KBC

Also is there any site that shows a lost of the "real" rates for the thousands of borrowers in negative equity and not just the less than 90% LTV ones


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## Sarenco (19 Feb 2018)

I don't know what report you are referencing but I suspect RTE ignored PTSB because their fixed rates are uncompetitive.

The Competition and Consumer Protection Commission has an excellent mortgage comparison tool -
https://www.ccpc.ie/consumers/financial-comparisons/mortgage-comparisons/


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## Paul Reilly (19 Feb 2018)

https://www.rte.ie/news/business/2018/0216/941278-variable-rate-customers-have-some-thinking-to-do/

This one

Why would they ignore PTSBs rates in this report


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## Sarenco (19 Feb 2018)

Paul Reilly said:


> Why would they ignore PTSBs rates in this report





Sarenco said:


> I suspect RTE ignored PTSB because their fixed rates are uncompetitive.


I'm afraid you will have to contact the journalist that wrote that piece if you want a more definitive answer.


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## Boyd (19 Feb 2018)

Perhaps they are just giving a flavour. This is exactly why sites like this exist


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## Gordon Gekko (19 Feb 2018)

I think that elements of that article are inaccurate; for example, my understanding is that Ulster Bank will allow me to repay up to 10% of my 2.5% fixed rate mortgage per year, rather the 5% referred to in the article.


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## RedOnion (19 Feb 2018)

Gordon Gekko said:


> I think that elements of that article are inaccurate; for example, my understanding is that Ulster Bank will allow me to repay up to 10% of my 2.5% fixed rate mortgage per year, rather the 5% referred to in the article.


Indeed. There are a number of inaccuracies / weaknesses in the article. A bit of a missed opportunity in my opinion.


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## MrEarl (19 Feb 2018)

Hi,

Just wondering, do any of you good people ever make contact with journalists after an article has been published, to provide relevant information or advise on inaccuracies ?

I've sent the odd email, but generally found that most of the journalists have little or no interest in acknowledging where they got something wrong.  Disappointing, to say the least.


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## Gordon Gekko (19 Feb 2018)

MrEarl said:


> Hi,
> 
> Just wondering, do any of you good people ever make contact with journalists after an article has been published, to provide relevant information or advise on inaccuracies ?
> 
> I've sent the odd email, but generally found that most of the journalists have little or no interest in acknowledging where they got something wrong.  Disappointing, to say the least.



Hi Mr Earl,

I have, and to be fair the journalist(s) in question have issued clarification(s).

Regards,

G


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## RedOnion (19 Feb 2018)

Similar experience to yourself @MrEarl , but it's been a while since I've written to a journalist. It's rare that there's something big enough to bother, and I'd be revealing my real name - working in banking it's difficult to be seen as unbiased.


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## lledlledlled (19 Feb 2018)

Gordon Gekko said:


> I think that elements of that article are inaccurate; for example, my understanding is that Ulster Bank will allow me to repay up to 10% of my 2.5% fixed rate mortgage per year, rather the 5% referred to in the article.



It is also inaccurate to say UB are the only lender to allow overpayments on fixed mortgages. KBC also allow this up to 10% per year.


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## gnf_ireland (19 Feb 2018)

lledlledlled said:


> It is also inaccurate to say UB are the only lender to allow overpayments on fixed mortgages. KBC also allow this up to 10% per year.



As do BOI
https://personalbanking.bankofireland.com/borrow/mortgages/articles/mortgage-overpayment/#panel1

_For fixed rates the maximum monthly overpayment is 10% of the monthly mortgage repayment, or €65 euro, whichever is greater._


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## peemac (20 Feb 2018)

Paul Reilly said:


> Where are ye getting all these low rates
> 
> My Permanent TSB managed Variable Rate of 4.3% can be reduced to 4.2% if I go to a Fixed Rate (which im not, yet anyways)
> 
> ...


And when PTSB try and do something about it, as in selling all the non performing loans of defaulters who will not engage with them, Fianna Fail, who can take some blame for the banking crisis, call foul and it becomes a political football.

The primary reason we have high SVR in this country is that it is almost impossible to repossess a house due to a defaulted loan without spending vast amounts on legal fees. That means European mortgage banks will not enter this market.

And guess who pays for those vast legal fees and for the losses caused by the defaulters? - Yep the Variable rate mortgage customer like yourself.

Why won't the media report this - its a far far bigger story. Well in excess of one million mortagges are variable rate mortgages, I would estimate several hundred thousand are paying in the region of 4%.   

A person with €300,000 mortagge over 30 years is paying almost €250 a month / €3,000 a year to fund these strategic defaulters. (based on 4.25% v 3% rate)


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## gnf_ireland (20 Feb 2018)

peemac said:


> A person with €300,000 mortagge over 30 years is paying almost €250 a month / €3,000 a year to fund these strategic defaulters. (based on 4.25% v 3% rate)


I am not sure they are all strategic defaulters but understand what you are saying



peemac said:


> The primary reason we have high SVR in this country is that it is almost impossible to repossess a house due to a defaulted loan without spending vast amounts on legal fees


It  is definitely a reason - whether it is the only reason is another matter.



peemac said:


> That means European mortgage banks will not enter this market.


It is probably a major reason that we do not have any competition into the market in the last while. The banks need to be able to enforce the security on the loan in a meaningful timeline and cost.



peemac said:


> And when PTSB try and do something about it, as in selling all the non performing loans of defaulters who will not engage with them, Fianna Fail, who can take some blame for the banking crisis, call foul and it becomes a political football.


And yes, this is shocking. Banks should be allowed to sell non-performing loans for defaulters who will not engage with them. If they are engaged in a process, this is one thing but non engagers are a completely different case. It would reduce the level of strategic defaulters in my personal view


Its an unpopular statement to make but someone who cannot afford their house, and who has no chance of being able to afford it in a reasonable term needs to have the house repossessed. Yes, the social welfare net needs to be able to capture and support this person, but having the banks (private enterprises) carry this social burden is rubbish. And don't talk about us rescuing the banks - its a non story at this stage. The government needs to stop outsourcing its social responsibility to charities and banks and take control of it themselves. Until this happens, non-tracker mortgage holders (both variable and fixed) continue to pay for this social responsibility


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## Paul Reilly (21 Feb 2018)

At least everyone can now see that bank PTSB for what they are.


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## Andy836 (21 Feb 2018)

gnf_ireland said:


> I am not sure they are all strategic defaulters but understand what you are saying
> 
> 
> It  is definitely a reason - whether it is the only reason is another matter.
> ...



Why should it be limited to non engaging defaulters?

Why shouldn't they be allowed sell any mortgage they want?


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## gnf_ireland (21 Feb 2018)

Andy836 said:


> Why should it be limited to non engaging defaulters?
> Why shouldn't they be allowed sell any mortgage they want?



I think those that engage are at least trying to come up with a solution with the bank and there should be some sort of time frame where a solution should try to be worked out.
Its not like our banks have shone themselves in glory in the past while either, and are not prone to making 'errors' either. Imagine if the tracker scandal had resulted in thousands of repossessions instead of the double digit numbers? The human cost of that would be massive and I don't think 10% compensation would cut it.

I have no problem with accountability, as long as the accountability is clearly called out on both sides and the banks are also held properly to account when they break the rules as well...

And I am not a socialist either, but things are rarely black and white in this country.

Personally, I would love a scenario where you require 20% deposit (no exceptions), 20-25 year mortgages maximum, any arrears over 180 days repossessed and 1.7% interest rates to go with it. But our national obsession with property will never let that happen !
For the record I am paying 2.95% on a 6% LTV mortgage in South County Dublin. That is about as risk free as they come


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## MrEarl (21 Feb 2018)

Paul Reilly said:


> At least everyone can now see that bank PTSB for what they are.



What does that mean ?






.


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## Andy836 (21 Feb 2018)

gnf_ireland said:


> *I think those that engage are at least trying to come up with a solution with the bank and there should be some sort of time frame where a solution should try to be worked out..........*



Time frame? They've had 7 or 8 years. 

As for accountability - the bank shareholders were entirely wiped out. They lost 100% of their investment. Boards and senior management were all removed. That is accountability. 
There has been no accountability for defaulted mortgage borrowers.


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## gnf_ireland (21 Feb 2018)

@Andy836 Firstly, I am not disagreeing with you in principle. As I said above, I would gladly see Ireland move to a more European model in its property dealings, but at the moment it would be like closing the barn door after the horse has bolted.

Property is a politically toxic topic to most. Its like the 'evictions during the land war of the 1870's' is fresh in peoples heads. Groups such as the 'New Land League' prey on the fear that people have that their homes would be taken off them. You have parties like FF being ultra populist in this area, forgetting they were a major contributor to the cause of this issue



Andy836 said:


> Time frame? They've had 7 or 8 years.


Yes, but has been said on another thread on here about the pension levy - these were unprecedented economic times with high levels of unemployment and emigration. Most who held their jobs took decent pay cuts, and many are only getting back towards parity now a decade later. Many people have experienced a lost decade of earning power. In short it was exceptional times.

For PTSB, I accept they have a large amount of impaired loans due to their lending behaviour during the boom times. However, if they had any sense at all in this, they would sell off the most impaired first - those that are over 2 years in arrears and have not engaged with the bank to agree a revised payment structure & those who agreed revised payment structures and failed to honour them. These could have been sold off relatively easily and there would be minimal media coverage about it since its very hard for anyone to stand up and argue against their sale.

Once this was done, the bank could look at the next tranche and see how to handle it. The only thing I would say about the sale - and agree they should be allowed to sell any loan they wish - is that if a settlement has been agreed between the borrower and PTSB, the purchaser should be legally bound to honour that settlement. So if the mortgage is split and a third parked interest free, the same arrangement should be honoured. I also think they should be under the control and regulation of the CB and answerable to the FSO, the same as any other financial institution.


I appreciate this is not the same BUT:
Lets say KBC decided to sell my fully performing mortgage to a 3rd party - and why should they not be allowed  to do that - I am on a 10 year fixed rate and default back to the KBC new business rate in 10 years time. But lets say this 3rd party does not actively sell mortgages - what rate should I default onto then - the KBC rate that has nothing to do with them or some random rate they choose? This is where there are complications with selling mortgages and potential reductions in interest rates that would not be passed on. I also think if a performing mortgage was to be sold at a haircut to a 3rd party, the mortgage holder should be offered a similar deal as well. 




Andy836 said:


> As for accountability - the bank shareholders were entirely wiped out. They lost 100% of their investment. Boards and senior management were all removed. That is accountability.


Agree re shareholders. Disagree re all senior management and most went on their way with serious pension top-ups that can hardly be defined as accountability.
The banks themselves were bailed out by the taxpayer, and this included provisions for impaired residential loans. I am not sure that many borrowers who have engaged with the bank have been offered much debt forgiveness where affordability is an issue. 
I am not proposing mass debt write-off, but where a loan is impaired, the property is in negative equity a decade later, affordability is an issue, surely it makes sense to write the debt down to the current market value (assuming the borrower could afford this mortgage repayment), and the bank take a permanent charge of say 10-25% on the property (depending on the level of write-off) so it cannot be sold or transferred without the bank getting a payment. The bank is not going to get any more than this if it repossesses the property or if it sells the mortgage to a vulture fund.



Andy836 said:


> Why should it be limited to non engaging defaulters?


Because its less politically toxic initially and non-engaging defaulters are most likely to have longer arrears, be strategic in their defaulting, more difficult to get out of the properties and less likely to be able to recover any money from without repossession.


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## gnf_ireland (21 Feb 2018)

Paul Reilly said:


> At least everyone can now see that bank PTSB for what they are.





MrEarl said:


> What does that mean ?


*edit* retracted as I should not have replied to a specific question asked on someone else. I had no 'right' to speak on their behalf ! Apologies
*end edit*


However, many people fails to realise that the reason PTSB has some of the highest SVR mortgage rates is because of the levels of non-performing loans, currently standing at around 28% (I heard quoted today). That basically means that for every 10 mortgage holders with the bank, 3 are not paying back as per the mortgage agreements. This means an increased burden is then pushed onto the other 7 who do pay in the form of higher interest rates. Getting rid of a block of non-performing loans removes levels of this from the bank and may have more positive benefits for the existing customers

The reality is this is not about people seeing what PTSB are really like - its about seeing what a high percentage of mortgage holders within PTSB are like and effectively getting you to pay their mortgage for them. Maybe your frustration and anger should be redirected to the long term non-engaging borrowers and strategic defaulters rather than the bank itself.

Asked a different way, how do you feel about paying an extra 0.5% in mortgage interest (made up figure) to cover the high levels of arrears within PTSB ?


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## Andy836 (21 Feb 2018)

gnf_ireland said:


> @Andy836 Firstly, I am not disagreeing with you in principle. As I said above, I would gladly see Ireland move to a more European model in its property dealings, but at the moment it would be like closing the barn door after the horse has bolted.
> 
> Property is a politically toxic topic to most. Its like the 'evictions during the land war of the 1870's' is fresh in peoples heads. Groups such as the 'New Land League' prey on the fear that people have that their homes would be taken off them. You have parties like FF being ultra populist in this area, forgetting they were a major contributor to the cause of this issue
> 
> ...



There's a lot there I agree with. 
- The use of some internal benchmark for SVR rate setting needs to end. It is not transparent and it just a stupid thing to continue with. Even if they want to benchmark it against an internal Cost of Funds then they should be required to publish the formula, the calculation method and the inputs. This should be done at a regulatory level.
- I agree, they should sell off the total drudge first before selling off the less drudgy stuff. However, I am cognisent that there is an element of needing to include a mix of loans in any portfolio sale to provide some level of cashflow to the purchaser while they work it out. 
- Re capital being injected including an element to cover provisions on consumer resi loans - that's probably true however this would've included some assumption on realizing collateral from NPLs. 
- Your point on the write down to market value is valid and I've no problem with that but 
(i) the subsequent written down loan needs to be priced & structured appropriately. It's no good writing down the loan and putting a 2% interest rate on it to make it "sustainable". A 100% LTV €100k loan paying 2% does not have a €100k value on the bank's balance sheet if the appropriate rate would be 4% - in fact the book value is closer to €65k-€70k.
(ii) the hard cases are those where the collateral value is higher than the Borrower can afford and I'm sure there are tons of them out there. Yet this is not addressed by any commentators or politicians. Take for example - €400k loan, €300k collateral value but the Borrower can only afford €200k mortgage. There is no justifiable argument for the Borrower to keep the house and for the Bank not to enforce the collateral. I think this is something which is really being missed in all of the hysterical claims from those opposing these sales. Writing it down to €200k (the amount they can afford) even with a 25% residual interest in the property, is still a gift of €25k to the debtor. That is not acceptable and would be paid for by other Borrowers and the shareholders.
- PTSB was overly aggressive in their lending practices during the boom (they all were, €20bn + in annual mortgage volumes is insane). But so were borrowers. If the loss is to be shared then so should the profit. Otherwise mortgage rates need to increase significantly. Property prices have risen ~40% since the trough. Should PTSB be getting a share of the upside on mortgages they issued to Borrower's in 2011 & 2012 & 2013? What about those who took mortgages from PTSB in 2000 - should they share give some upside to PTSB? The downside sharing argument is clocked in claims for "fairness" etc but to be truly equitable, they'd have to give them some of the upside too.
- The political toxicity of it is the real problem. There are too many politicians given airtime and not pressed on issues. I watched John Moran on Cooper & Yates last night - he was afforded no time to address the rubbish the politicians were speaking. The media is as much to blame for this as anyone - but then again, no one wants to pay for the media so we get what we pay for.


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## MrEarl (22 Feb 2018)

gnf_ireland said:


> @Paul Reilly is trapped in a >90% LTV situation with PTSB and believes the bank are screwing him as he is an easy target paying a rate of 4.3% ....




Hi gnf_ireland,

Thanks for the detailed reply, but I was hoping that Paul might actually clarify his own words for me (just incase any of us might have misunderstood his intentions).




As for the title of this thread .... 

surely it's time one of the Mods changed it from _Mortgage Rate "War"_ to _Mortgage Rate "Spat"_, so the title of the thread more accurately reflects what's happening in the market. 


_
_



.


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## gnf_ireland (22 Feb 2018)

MrEarl said:


> Thanks for the detailed reply, but I was hoping that Paul might actually clarify his own words for me (just incase any of us might have misunderstood his intentions).


@MrEarl I fully understand  this and I am sure Paul will come and clarify his words in due course.
I have had a number of discussions with Paul on this in the past, including a recent one on the reduction of TRS.



MrEarl said:


> surely it's time one of the Mods changed it from _Mortgage Rate "War"_ to _Mortgage Rate "Spat"_, so the title of the thread more accurately reflects what's happening in the market.


No argument here


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## gnf_ireland (22 Feb 2018)

Andy836 said:


> - The use of some internal benchmark for SVR rate setting needs to end. It is not transparent and it just a stupid thing to continue with. Even if they want to benchmark it against an internal Cost of Funds then they should be required to publish the formula, the calculation method and the inputs. This should be done at a regulatory level.


Absolutely agree with this point. This would have a number of benefits including the ability for customers to be able to assess the best variable rate not only today but into the future. This would be particularly true is the cost of funds measure was the average across all banks in the state, and published once a quarter by the regulator.
The other advantage here is it would be up to the individual bank to make improvements internally. Any efficiencies they can make against the other banks would mean higher profits for them. They are in control of their own destiny so to speak - or at least the sector is. I would expect it would not result in a race to the bottom.
The other option with variable rates is to enforce a margin - say +/- 1.5% on the rate signed up to for the duration of the loan. I see some countries, including Belgium, have something similar. This would at least provide a cap on interest rates.
But personally, I would prefer to see lifetime fixed rates on mortgage loans, but the ability to refinance at a reasonable break cost. I think it was Denmark that had something like this



Andy836 said:


> - I agree, they should sell off the total drudge first before selling off the less drudgy stuff. However, I am cognisent that there is an element of needing to include a mix of loans in any portfolio sale to provide some level of cashflow to the purchaser while they work it out.


Understand, but maybe then target some buy to let mortgages or some of the residential mortgages which have not been restructured etc. By doing it the way they have, they created more political ammunition that engaging with the bank is meaningless as the bank can break the deal by selling off your mortgage at any time. Surely everything should be encouraging people to engage with the bank so we can draw a line until this boom time mess as quickly as possible - it has been a decade after all
I also feel there needs to be special treatment for strategic defaulters, once identified. Most who do not engage fall into that category to my mind, except the ones who are so petrified of the banks they cannot cope !



Andy836 said:


> - Your point on the write down to market value is valid and I've no problem with that but
> (i) the subsequent written down loan needs to be priced & structured appropriately. It's no good writing down the loan and putting a 2% interest rate on it to make it "sustainable". A 100% LTV €100k loan paying 2% does not have a €100k value on the bank's balance sheet if the appropriate rate would be 4% - in fact the book value is closer to €65k-€70k.


Agreed - if a customer gets a writedown they need to be able to afford the new mortgage at current mortgage rates. The revised mortgage needs to be sustainable and provide the bank with an equal footing to if it was repossessed and sold at market value. Anything less than this the bank loses out financially, meaning someone else has to pay



Andy836 said:


> (ii) the hard cases are those where the collateral value is higher than the Borrower can afford and I'm sure there are tons of them out there. Yet this is not addressed by any commentators or politicians. Take for example - €400k loan, €300k collateral value but the Borrower can only afford €200k mortgage. There is no justifiable argument for the Borrower to keep the house and for the Bank not to enforce the collateral. I think this is something which is really being missed in all of the hysterical claims from those opposing these sales. Writing it down to €200k (the amount they can afford) even with a 25% residual interest in the property, is still a gift of €25k to the debtor. That is not acceptable and would be paid for by other Borrowers and the shareholders.


So this is where there is 100k equity in the house and the mortgage is simply not affordable by the customer.
In my proposal, I would extend the write-down approach to a maximum of say 10-15% in positive equity scenarios with the charge on the property of say 15-20% (so a premium for the writedown). If a writedown of 15% will not bring the mortgage to affordability and the house is in positive equity, then the customer needs to downsize to something they can afford.
If I buy in Dalkey for 750k, and my mortgage is 400k, but I can only afford a 200k mortgage due to changing circumstances, why should I be allowed to keep the house in Dalkey. The person needs to downsize to a house they can afford in a place they can afford it.
For the downsize model to work, the bank have to have an obligation to offer the person a mortgage for what they can afford - in both our cases 200k, on the assumption it is in positive equity. In your example that will allow the customer a maximum of 300k purchase fund and in mine 550k.



Andy836 said:


> - PTSB was overly aggressive in their lending practices during the boom (they all were, €20bn + in annual mortgage volumes is insane). But so were borrowers. If the loss is to be shared then so should the profit. Otherwise mortgage rates need to increase significantly. Property prices have risen ~40% since the trough. Should PTSB be getting a share of the upside on mortgages they issued to Borrower's in 2011 & 2012 & 2013? What about those who took mortgages from PTSB in 2000 - should they share give some upside to PTSB? The downside sharing argument is clocked in claims for "fairness" etc but to be truly equitable, they'd have to give them some of the upside too.


I assume you are talking about arrears cases in these windows rather than general mortgages. I would not expect a performing mortgage to be given a writedown, and similarly I would not be expecting a performing mortgage to have any claim on the upside. 
In arrears cases, there are two types of arrears in my view - one is short term cash-flow issues and the second is affordability. Affordability I think we have discussed with the negative equity (repossession or capped writedown with charge) and the positive equity (downsizing). The short term cash-flow scenario is like a taxi driver who breaks his leg and cannot work for 8 weeks. We will get back on his feet (literally), but there is a short term cash flow issue. I would expect this person to engage with the bank and agree some sort of payment holiday etc
I know what you mean around fairness and equitable, but I guess the issue in the capped write-down in negative equity scenario is even if the bank repossesses the house they will not get anything more from it. The 5% premium in the case of positive equity writedowns is to ensure it is not overly abused. The fact the bank now hold a percentage of the asset means they will benefit from any future upside in value



Andy836 said:


> - The political toxicity of it is the real problem. There are too many politicians given airtime and not pressed on issues. I watched John Moran on Cooper & Yates last night - he was afforded no time to address the rubbish the politicians were speaking. The media is as much to blame for this as anyone - but then again, no one wants to pay for the media so we get what we pay for.


Absolutely agree. I fail to see how some politician cannot come out and say that someone who has not paid their mortgage for 2-5 years cannot be repossessed. We need a rational discussion on repossessions before we can have a rational discussion on interest rates.
And it appears the majority of people do not realise that they are paying for the customers who do not pay their mortgages to stay in their homes. There needs to be a campaign similar to the insurance one - the cost of insurance (mortgages) + the cost of fraud (defaulters)
I was very surprised how little media coverage the commentary around strategic defaulters has received


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## renter45 (22 Feb 2018)

Thought this thread was to highlight any rate cuts in the market, not a personal agony aunt for one person with a high svr


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## gnf_ireland (22 Feb 2018)

renter45 said:


> Thought this thread was to highlight any rate cuts in the market, not a personal agony aunt for one person with a high svr


I am probably guilty of not sticking to the topic on the thread so apologies. Mod's feel free to delete or move the comments on PTSB loan sale to another thread.


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## renter45 (8 Mar 2018)

New rates from Ulster bank today, can't see any changes really
https://www.ulsterbankintermediaries.ie/product-rates/fixed-rate-mortgages


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## RedOnion (8 Mar 2018)

I suspect it's just UB rolling their rates for another 6 months. They're slightly unusual in that a 2 year fixed for example isn't for 2 years, but up to 2.5 years depending on when you draw down (fixed until Sept 2020). They were previously quoting to March, so had to update the rate sheet.


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## TheJackal (8 Mar 2018)

renter45 said:


> New rates from Ulster bank today, can't see any changes really
> https://www.ulsterbankintermediaries.ie/product-rates/fixed-rate-mortgages



Cheers. I've been waiting for the new rates. Thought they'd drop the variable rate. 

For a <50% LTV
AIB doing 2.75% +2K cash back
UB doing 3.2% (under 200K mortgage) or 3.0% (over 300K) +1.5K

Seems to me this mortgage rate war has stalled last few months


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## gnf_ireland (9 Mar 2018)

RedOnion said:


> They're slightly unusual in that a 2 year fixed for example isn't for 2 years, but up to 2.5 years depending on when you draw down (fixed until Sept 2020). They were previously quoting to March, so had to update the rate sheet.


I would be 99% sure that is because of IT system limitations rather than trying to be a 'differentiator' by design 



TheJackal said:


> Seems to me this mortgage rate war has stalled last few months


Definitely - and I imagine it will be the case until the full assessment has been done on the tracker scandal



TheJackal said:


> For a <50% LTV
> AIB doing 2.75% +2K cash back
> UB doing 3.2% (under 200K mortgage) or 3.0% (over 300K) +1.5K


And AIB is still losing market share !


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## RedOnion (9 Mar 2018)

gnf_ireland said:


> I would be 99% sure that is because of IT system limitations rather than trying to be a 'differentiator' by design


Only 99%?


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## gnf_ireland (9 Mar 2018)

RedOnion said:


> Only 99%?


Having never worked for them I could not say 100%

But that said, I have seem strange requirements and product designs over the years just because that's the way someone defined it 10 years previously and they have never bothered to change it... or its too hard to update the process material or training material !


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## dave2015 (11 Mar 2018)

Would there be anything to stop switching for the 4year fixed ending march 2022 to new one ending sept 2022 on assumption little or no break fee? Few more months at 2.6 couldn't hurt!


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## newirishman (11 Mar 2018)

dave2015 said:


> Would there be anything to stop switching for the 4year fixed ending march 2022 to new one ending sept 2022 on assumption little or no break fee? Few more months at 2.6 couldn't hurt!



Exactly what I was thinking. I'll call them tomorrow and will report back....


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## pauric (12 Mar 2018)

Was hoping they would have attacked the 10 year market more. Need some more competition there to try and bring those rates down. Worries that exiting their 4 year and possibility rates could have gone up a % or so.


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## gnf_ireland (13 Mar 2018)

pauric said:


> Was hoping they would have attacked the 10 year market more.


I have to agree here - this is an area that definitely should be looked at by the banks. I would have liked to see more sub 3% 10 year fixed rates, especially since ECB are starting to talk about raising rates.

Its interesting to see KBC's pricing for 10 year fixed products -  <50% LTV = 2.95%; 50-60% = 2.95%; 60-80% = 2.99%; 80-90% = 3.5%
So they only add a premium of 0.04% for LTV of a 30%+ margin - so 49% to 79%. I would have expected that to be higher if I am being honest

I think the customers with lower LTV are the ones losing out in all of these discussions. The rates for the higher LTV's are not off the scale considering our current conditions, especially how difficult and costly it is to enforce security on the mortgage.


I wonder would any bank be willing to target 'blue chip' lending at lower rates - so <15 years left, Max 2 times LTI (based on last 3 years pay slips) and less than 50% LTV and offer them a 2% rate on it. And instead of a cashback request 500 euro arrangement fee.... would that shake up the switcher market any bit? I personally think it would need something like that to trigger a proper 'war' at the lower LTV levels.


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## dave2015 (3 Apr 2018)

newirishman said:


> Exactly what I was thinking. I'll call them tomorrow and will report back....


For info got confirmation of zero break fee and option to pick the new 2.6% deal ending sept 2022. So means effectively got 5 year fixed at that rate now.


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## TheJackal (4 Apr 2018)

Has any bank dropped their variable rate last 6 months or so? It seems just the fixed rates dropping lately


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## renter45 (4 Apr 2018)

TheJackal said:


> Has any bank dropped their variable rate last 6 months or so? It seems just the fixed rates dropping lately


Think the last bank to amend variable was AIB and that was 6+ months ago. Nothing much changed since November, other then Ulster bank and KBC tweaking rates. Nothing from BOI, AIB, EBS, PTSB this quarter.


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## skrooge (4 Apr 2018)

TheJackal said:


> Has any bank dropped their variable rate last 6 months or so? It seems just the fixed rates dropping lately



Doubt there will be much movement in variable rates. For a number of reasons:

Over half of new lending is fixed these days. People are preparing for eventual rate increase.

New lending/switching while increasing is still quite low. Coupled with that demand for housing is outstripping supply. With so few players in the market cutting rates won't lead to significant new levels of lending for any bank.

With all that a drop in variable rates would disproportionately hit banks existing book (which is still mostly variable). Net effect less money for banks.


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## Sarenco (4 Apr 2018)

skrooge said:


> With all that a drop in variable rates would disproportionately hit banks existing book (which is still mostly variable).


That's not universally the case.  For example, over 75% of BOI's back book consists of trackers and fixed-rate mortgage products.

AIB has the lowest variable rates on the market but that's not much use if other lenders are offering lower (effective) fixed rates.  If AIB want to maintain market share with their current variable rate strategy, then they're going to have to lower their rates IMO.

Mind you, AIB has spent a fortune on advertising recently so maybe they are hoping that will do the trick and that potential borrowers aren't much good at maths!


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## skrooge (4 Apr 2018)

Fair point on BOI but they got there by deliberately pricing themselves out of the variable rate market.It would be a major about turn for them to change that now. 

As for AIB if they were to react to lower fixed rates in the market I would imagine it would be through EBS. Use one brand for fixed other brand for variable. Direct conpetion is very limited.

In saying all that I think I read somewhere on here how ptsb still have a sizeable market share of new lending and they are not at the sharp end of the market on any front. People on here are not representative of the whole market. It's a seller's market in terms of mortgages. Banks will get the business regardless.


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## Anonymy (8 Apr 2018)

I can’t post the link here as I have not got enough posts but PTSB have reduced their rates if someone could please post the article! 

Still high but maybe EBS will reduce their fixed rates more as a result of this! UB’s four year fixed at 2.6% still seems the best to me!


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## Sarenco (8 Apr 2018)

https://www.independent.ie/business...ng-fixed-rates-for-new-business-36785871.html


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## Sarenco (10 Apr 2018)

Pressure grows on AIB and BOI to cut mortgage rates -

https://www.independent.ie/business...f-ireland-to-cut-mortgage-rates-36791882.html


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## RedOnion (10 Apr 2018)

Sarenco said:


> Pressure grows on AIB and BOI to cut mortgage rates -
> 
> https://www.independent.ie/business...f-ireland-to-cut-mortgage-rates-36791882.html


From article:
"_Mark Whelan, of price comparison site Bonkers.ie, said Permanent TSB's new fixed rates would be among the most competitive in the Irish market_."

Really?  There's something wrong with my calculations if that's the case.


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## Sarenco (10 Apr 2018)

RedOnion said:


> From article:
> "_Mark Whelan, of price comparison site Bonkers.ie, said Permanent TSB's new fixed rates would be among the most competitive in the Irish market_."
> 
> Really?  There's something wrong with my calculations if that's the case.


I think that's a fair statement, particularly when you take the cashbacks into account.

For example, PTSB's High Value 3-Year Fix <60% LTV has a notional rate of *2.95%* but an effective rate over three years of only *2.17%* when you allow for the cashbacks (2% at drawdown, plus 2% of each monthly mortgage payment).


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## RedOnion (10 Apr 2018)

Sarenco said:


> I think that's a fair statement, particularly when you take the cashbacks into account.


Ah, my bad - I looked at the rates in headline table rather than their high value rates.

I've looked at it properly now, and withdraw my comment.

Factoring in the 2% refund of repayments makes them attractive for some scenarios, particularly the 3 year term.

It makes no sense that their 5 year notional rates are lower than shorter terms, but results in decent rates, although the 3% cashback from BoI is still a lower effective rate.

The best buy tables are getting more complex to maintain!


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## Sarenco (10 Apr 2018)

RedOnion said:


> The best buy tables are getting more complex to maintain!


Absolutely, there are a lot of variables at play.


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## Gordon Gekko (10 Apr 2018)

Sarenco said:


> Absolutely, there are a lot of variables at play.



One would almost think that the banks are seeking to profit from the confusion that they create.


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## pauric (14 Nov 2018)

Things seem to have quietened down again on the rate reductions. I wonder who will go next to make a move and will we see the 2% cash backs continued into next year or not?


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## cliqueentour (14 Nov 2018)

I asked about the cash back offers ending 31/12/2018 but I've gotten no replies. I dunno are they ending the cashbacks.


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## RedOnion (14 Nov 2018)

cliqueentour said:


> I asked about the cash back offers ending 31/12/2018 but I've gotten no replies. I dunno are they ending the cashbacks.


Updated this week:
BOI extended to 30/6/2019
EBS extended to 31/12/2019
PTSB is based on approval date, so they'll probably extend in a few days.


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## Cilar (24 Dec 2018)

Kbc extended switch offer to end of June 2019


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## renter45 (3 Jan 2019)

tommyryan55 said:


> Not sure if this was mentioned before but EBS are moving to match BOIs cashback offer,
> 
> https://www.ebs.ie/mortgages/back-in-cash


Offer a 2.5% fixed rate for 5 years with the 3% cashback and they'll clean up.
Will any bank move on interest rates before brexit at end of March??


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