Here's a question, do banks have to raise the rates on existing mortgages once the ECB increases the base rate? Or do they just do it because they can?
For example, say I get a mortgage at 4%, and that the bank borrowed that money at the interbank rate of 3% (before todays hike). Is the money the bank took the loan of not fixed at 3% for the term of the loan? Or do the banks who loaned the money to the Irish bank also raise their rates?
Or does it work some other way?
Agreed (from the bits I heard). Did he mention "strong vigilance"? I got quite of lot of streaming interruptions while watching online so missed portions of his speech.
It's an overnight rate, so the current rate is what the bank get charged for what they owe on any given night regardless of what rate the money was originally borrowed at.
Otherwise all the 1980's/90's mortgage would still be on 10+% interest rates today.
Hence banks raise/lower the rates they charge their customers on loans in line with the ECB rate to maintain their margin.
Let hope he stamps on this cr8p we've been hearing in the media about there being no rate rises in '07.
It's an overnight rate, so the current rate is what the bank get charged for what they owe on any given night regardless of what rate the money was originally borrowed at.
Otherwise all the 1980's/90's mortgage would still be on 10+% interest rates today.
Hence banks raise/lower the rates they charge their customers on loans in line with the ECB rate to maintain their margin.
Let's remember too that a higher rental yield will be required as interest rates rise.
Investors have alternative channels for investing their money and the money markets become more attractive as interest rates rise.
Property investors will not be happy with 5% rent yield when interest rates reach 6%
We'll see at least one 0.5% hike first half of 2007.
You cannot see that with any level of surety.
Stop talking dirty !We'll see at least one 0.5% hike first half of 2007.
Don't think all of the last rate rise was passed on by all lenders. This one will have to be though...........
Irish Times interesting today, reporting the facts...
"dire week in the auction rooms"
"general acceptance now that the normally short autumn season might be even shorter, as the buyers that are there are sitting on their hands and taking in the view"
"agents have the neck to quote higher prices than initial AMV having withdrawn a property without a single bid. This type of dilusional behavous is unlikely to attract buyers..."
Not much bullish sentiment from the IT anymore i'm afraid
Will we ever again see queues for property ....
Seems to be a lot of new build apartments for sale at moment and more launching every week.
I thought the same too. A lot in the IT today.Is this a time of the year when new builds are planned to arrive on the market?Seems to be a lot of new build apartments for sale at moment and more launching every week.