Deal includes: " A commitment to tackle high mortgage rates, including legislation if possible"

[Delboy]

Fixing would appear to be an awful idea

Not for 1 yr with the likes of BoI given the difference between SVR and Fixed

 

[Gordon Gekko]

I believe that SVRs will be 2.75ish before the Summer's out.

That's why fixed rates appear attractive.

 

[Delboy]

Rates will go down....but not by that much and not that quickly either

 

[Gordon Gekko]

How will BOI/AIB/KBC/UB deal with Frank who by all accounts will be offering mortgages and switches at 2.7%/2.8%?

 

[Paul Reilly]

While Variable Rates will likely go down the bank has major power. Especially the Central Bank.

I fear the government may bring the Variable Rate down a bit but Central Bank will intervene saying this is strategically unsustainable and the Cost of doing business in Ireland is too high to guarentee the necessary margin to adhere to the government stipulations.

Therefore low variables may come but fair ones never will. No matter who rules the roost in government.

Thats why MIR is the only way forward

 

[Delboy]

'Fair rates' cannot come about here while we have world record rates of arrears/no repossessions and shenanigans such as what happened today in Limerick
http://www.thejournal.ie/armed-garda-limerick-court-protest-2756064-May2016/

THERE WERE CHAOTIC scenes at Limerick Circuit Civil Court today as anti-eviction protesters took over the court and forced it to abandon hearing 170 home repossession orders.
Limerick county registrar, Pat Wallace, who was hearing the cases, had to vacate the bench twice after protesters approached him and shouted at him.

 

[shane732]

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.

The Stamp Duty offer has me tied in for 5 years.

 

[rodger]

Nobody should still be paying 4.5% - BOI have a one year fix available for LTVs over 80% @3.65%.

In any event, BOI is charging an average rate of less than 3% to existing customers.

It's the variable rate we're discussing.

What is bringing the average down? Tracker?

That's why variable rate customers want to see rates come down because of the unfairness.

 

[Sarenco]

I believe that SVRs will be 2.75ish before the Summer's out.

That's why fixed rates appear attractive.

That is a very brave prediction Gordon.

In the UK variable rates of less than 3% are common, but BOI UK's SVR is 4.49% and that is not out of line with the SVRs of other lenders in the UK.

I would be very surprised if BOI's SVR fell to anything like 2.75% over the coming months. We'll see.

 

[demoivre]

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

Why is a couple, both teachers, with a 100% mortgage more likely to default than a self-employed Carpenter with a 50% mortgage?

 

[Andy836]

EL = PD x LGD x EAD

Payments on low ltv mortgage likely lower too.

 

[Sarenco]

Expected loss equation:
http://riskarticles.com/expected-loss-el-calculation/

 

[rodger]

Fair play to Charlie Weston telling it like it is

http://m.independent.ie/opinion/com...ect-bankers-to-roll-over-easily-34692644.html

 

[demoivre]

EL = PD x LGD x EAD

Which brings home the point that I'm making. The only part of the right hand side of the equation that can be zero is PD, which, when it is, or even close to zero, means EL is zero or close to zero. PD for quality borrowers with quality income and job security would be very low, such as for two teachers.

Payments on low ltv mortgage likely lower too.

Not necessarily the case at all.

 

[Andy836]

Under Basel none of those variables, including PD, can ever be zero.

I accept your point that possibly the 2 public sector workers have better income security and may have a lower PD. This would have a large affect on the EL but it would be more than offset by their much higher LGD in practice - when time to recovery and associated costs/accrued interest was included.

 

[demoivre]

Under Basel none of those variables, including PD, can ever be zero.

In theory maybe but in practice PD would be close to zero for many categories.

I accept your point that possibly the 2 public sector workers have better income security and may have a lower PD. This would have a large affect on the EL but it would be more than offset by their much higher LGD in practice - when time to recovery and associated costs/accrued interest was included.

Don't see why that's necessarily the case at all. LGD is heavily dependent on PD so a very low PD will massively impact LGD and hence EL. There's a reason why , in the mad days, 100% mortgages were only given to certain occupations, and self employed carpenters weren't one of them.