I would agree with this! However such an agency would need to be impartial and make a decisions based on the specific circumstances of each case which would mean in some case a sale of the PDH being the only option.
Deal includes: " A commitment to tackle high mortgage rates, including legislation if possible"
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Gordon Gekko
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I've said it before and I'll say it again...competition is the only thing that will resolve this issue. Hamfisted political gombeenery will merely scare off potential entrants into the market. Government needs to make it easier to enter the market. For example, why are Frank Money not up and and running yet? Rate caps etc will stop the likes of Santander from opening here. Why doesn't the State nationalise the management of a bank (e.g. PTSB), and set its variable rate at (say) 2.5%?
Brendan Burgess
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Repeating something doesn't make it true. Competition will help only those borrowers who are free to move. It will not help people who are in negative equity or who have been in arrears.
Brendan
Hi Gordon, I haven't exactly proposed nationalisation but it might as well be. I proposed earlier in this thread that instead of extending TRS how abt capitalising the state owned AIB and PTSB but on the instruction that they bring down their SVR to say the eurozone average. Also make it easier to switch to them and that should have the desired effect. 44BRENDAN did make me obvious point that the government and the CB only want to get out of the banks, but reducing the rates would generate a lot of new business wouldn't it. When BOI and others moan about it being unfair tell them now you know what it's like to be an SVR mortgage holder and we'll do it because we can . When the ECB come looking for answers tell them give us back our 64 billion or at lest go some way towards it 1st seeing as they've constantly refused to give ireland a proper deal on our legacy debts.
Gordon Gekko
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That isn't a reason to stifle competition though. In many ways, it's a circular argument. The most important issue is rates generally. If Santander or Frank have an SVR of 2.7%, that benefit will flow to everyone. And what proportion of negative equity and arrears cases are on SVRs in any event? Surely most distressed mortgages are on trackers if they date from 2005 to 2008?
Before anyone ridicules my last posting for being unrealistic, I'm well aware how unlikely that it would happen that way although revenge would be sweet wouldn't it. What I will say is isn't it a pity nobody will stand up for the ordinary people by being different and actually do something like what I proposed. They'd get great respect for standing up to the banking and ECB bullies and even if they threatened us with removal from the eurozone don't forget Greece owe a lot more than us and at the end of the day they weren't cast adrift.
But why should people with 100%+ LTVs or those with a track record of arrears have their rates lowered? They are clearly higher risk.
As GNF stated, there are vastly different risk profiles between someone with a 30% LTV and someone with a 90% LTV.
To clarify. I don't think those in negative equity or those with recent arrears records deserve rate reductions.
This is similar to the the whole Social Housing funding model. One cohort of the public is bearing the brunt for something which should be shared by a much wider base.
- The cost of new social housing has been borne in recent times purely by new-build purchasers - via Part V costs [the rest of the country wasn't funding it]. That's not fair.
- The cost of defaulted mortgages (and trackers) is being borne in recent times purely by SVR holders - [the rest of the country/tracker customers aren't funding it]. That's not fair.
Given the Irish Banks aren't generating supernormal profits at group levels, the only way to maintain the Banks' existing level of profitability AND allow for a reduction in SVRs is to sort out the defaulted mortgages and the trackers.
Twiddling around the edges with announcements of pending legislation or "investigations" aren't going to solve these problems.
Brendan Burgess
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Hi Andy
I am absolutely clear that lower risk borrowers should pay lower rates. But Gordon was claiming that competition would resolve the issue. It will not resolve the issue for someone paying 4.95% to Danske Bank who can't move.
That is why I suggested that the best way is to limit interest rates to 3% above the ECB rate. If a lender wishes to charge more, they would have to justify it to the Central Bank and get their approval. The CB may well approve rates higher than 3%. But the lenders would have to justify them.
Issue was discussed today in an informal meeting with banking colleagues. General consensus was that such a limitation would be fair provided that it accurately reflected a risk premium up to a designated maximum (appeals could be allowed for fairness). However I'm sure that those responsible for overall profitability of the banks would not be so agreeable!
I don't agree with that Brendan. I don't agree with any interference with rate setting. Furthermore, I believe the Central Bank has said they do not want such a power. Also, how would it work - would it be retrospective - i.e. apply to existing loan contracts? Would it have to be justified on a case by case basis or could it be done on a general basket basis?
Someone who cannot switch obviously isn't a "low risk" Borrower as they don't qualify under the new central bank rules. I don't believe they should get a free ride on the backs of others.
I fully support bifurcating the market between (i) lower rates for lower risk, (ii) higher rates for higher risk. Perhaps Banks need to start investing in tech & data to allow individual loan level risk pricing. That's possibly not realistic with the main banks at this stage - I'd dare say their systems are miles behind those of specialty lenders with dynamic pricing models.
Hello everyone
I was reading on this forum for quite some time and I wanted to participate on this piece.
I am looking around at the moment to go for a mortgage and I am shocked to see how bank screw the locals in Ireland the worst thing been that the government seems Ok with that and the consumer regulator is just doing nothing.
there are things that shock me particularly.
1) you cannot get a mortgage with fixed interest rate fixed for the lifetime of the mortgage why is that ? banks selling this type of product lik KBC in Belgium sell 25 fixed 1.85 % mortgage.
the do seem healthy enough to have ventured in the Irish market ...
2) why are the variable rate not capped I mean if you take a look again raising interest raise where a part of the subprime crisis that caused the financial meltdown that which in turn, caused the Irish housing bubble to explode I yet do not understand why consumer protection against this kind of mortgage not been put in place.
I believe if you ensure that the mortgage is sustainable there would be no area negative equity or not.
I do find the central bank income ratio on mortgages to be a sensitive rule and this should be left in place as the central bank played exactly it's role when they brought it up in place at the first time.
but if fixed rate or capped variable where the norm there would not need to be that tough because the bank and the consumer would know from the start how mutch the mortgage will cost for the whole life of the mortgage.
As for now there is nothing that ensure you that a 3.5 % interest rate mortgage do not become a 6 or 10 % one in 2-3 year ( even if this is unlikely there is nothing to stop the bank to do so as it please) making the mortgage unsustainable and driving it to area, which is for me pure madness.
One have to know that only 5% of the mortgage (since dodd frank and bale 3) value stay in the bank book the rest of the value is repackaged and sold back to investor and I don't think Irish bank sell such high-value return rate product to external investor (but I might be wrong).
that was my piece of thought.
I was reading on this forum for quite some time and I wanted to participate on this piece.
I am looking around at the moment to go for a mortgage and I am shocked to see how bank screw the locals in Ireland the worst thing been that the government seems Ok with that and the consumer regulator is just doing nothing.
there are things that shock me particularly.
1) you cannot get a mortgage with fixed interest rate fixed for the lifetime of the mortgage why is that ? banks selling this type of product lik KBC in Belgium sell 25 fixed 1.85 % mortgage.
the do seem healthy enough to have ventured in the Irish market ...
2) why are the variable rate not capped I mean if you take a look again raising interest raise where a part of the subprime crisis that caused the financial meltdown that which in turn, caused the Irish housing bubble to explode I yet do not understand why consumer protection against this kind of mortgage not been put in place.
I believe if you ensure that the mortgage is sustainable there would be no area negative equity or not.
I do find the central bank income ratio on mortgages to be a sensitive rule and this should be left in place as the central bank played exactly it's role when they brought it up in place at the first time.
but if fixed rate or capped variable where the norm there would not need to be that tough because the bank and the consumer would know from the start how mutch the mortgage will cost for the whole life of the mortgage.
As for now there is nothing that ensure you that a 3.5 % interest rate mortgage do not become a 6 or 10 % one in 2-3 year ( even if this is unlikely there is nothing to stop the bank to do so as it please) making the mortgage unsustainable and driving it to area, which is for me pure madness.
One have to know that only 5% of the mortgage (since dodd frank and bale 3) value stay in the bank book the rest of the value is repackaged and sold back to investor and I don't think Irish bank sell such high-value return rate product to external investor (but I might be wrong).
that was my piece of thought.
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R
rodger
Guest
If they're on tracker then they're not distressed
So I have a BOI variable rate now of 4.5%. I was thinking of fixing for a period - my payment would drop by €150 a month. I'm wondering whether I should leave it. Having that even if they do bring in legislation will rates drop below the current fixed rates?
Perhaps I should fix for one year?
Perhaps I should fix for one year?
R
rodger
Guest
Good question
What is the fixed rate?
Michael mc Grath interviewed on 6 one news
The second thing he said was he hopes to reduce variable interest rates
What is the fixed rate?
Michael mc Grath interviewed on 6 one news
The second thing he said was he hopes to reduce variable interest rates
BOI's one year fixed rate for LTVs over 80% is 3.65%.
Is it possible that BOI's SVR will fall below 3.65% in the next 12 months? Yes, it's certainly possible but it doesn't look very likely at the moment.
Is it possible that BOI's SVR will fall quickly enough and far enough that you would be better off not taking the 1 year today? Again, it's possible but that looks even more unlikely.
Even if BOI's SVR fell from 4.5% to, say, 3% in six months' time, you would still come out well ahead after 12 months if you fixed @3.65% today.
If you can't switch, it makes sense to take the 1 year fix.
Paul Reilly
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Wrote this already but does anyone know if mortgage relief is until 2020?
Lower Variables definitely on way but banks wont lose out because even if they do reduce variables theyl put up fees to .40c a transaction to make up.
Variables were meant to track the euro base rate so in essence the bank owes us variable rate holders thousands
Lower Variables definitely on way but banks wont lose out because even if they do reduce variables theyl put up fees to .40c a transaction to make up.
Variables were meant to track the euro base rate so in essence the bank owes us variable rate holders thousands
We don't know yet - the FF/FG deal simply says that MIR will be retained beyond the end of 2017 "on a tapered basis".
I'm in the 60%-80% LTV category so the fixed rate is 3.4%.
I was leaning towards a 3 year fixed but think I'll go for 1 year fixed.
Awful when you look at the variable rates in the UK. My repayment could be €300 a month cheaper!!
Gordon Gekko
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Fixing would appear to be an awful idea
Is there a particular reason not to to switch to another lender?
The volume of borrowers that are refinancing their home loans with other lenders has increased dramatically over the last 12 months. I know it's a pain but if you can get a materially better deal with another lender it's definitely worth the effort.