Discussion: Should customers be let out of fixed rate mortgages?

[DerKaiser]

Re: Extrication from Fixed rate mortgage?

Okay - let's modify the plan - rules in the Amnesty that preclude you from availing of a fixed rate from the same bank for a specified period of time.

Your other arguments seem to be based on the presumption that the banks will all be nationalised. How would you feel about this suggestion if this does not transpire, or if it is implemented prior to any such nationalisation?

Encouraging people onto variable rates is one thing but excluding them from fixing their rate could actually turn out to be the greatest scandal of all time if interest rates began to rise again.

My appeal to people's better instincts is based on the fact that banks will be most likely nationalised and the taxpayer will ultimately bear the brunt.

Lettng people breach their contractual obligations is not in the interests of the banks owners be they the state or private sharholders.

People, however, seem to have lost all perspective of what is fair. Just because a few corrupt developers have gamed the system does not mean that all bets are off as regards what is fair in society and what is not.

Resources are limited and need to be directed where they are most needed.

 

[tracy3135]

Re: Extrication from Fixed rate mortgage?

You are speaking a lot of sense. I am fuming that there are such people out there who seem to be revelling in other people's misery. Those of us stuck in a fixed rate mortgage are feeling the pinch a lot more than those of you that are not. My husband and I are civil servants who have had our wages cut by €500 per month EACH and on top of that we are in a fixed rate. Yes we could afford the mortgage when we were earning €1000 per month extra but now we are in a position where we will probably lose our home! This was not forseen by us. Have a bit of understanding in these times

 

[charliemacck]

Re: Extrication from Fixed rate mortgage?

I'm not sure I get the point of this. Surely, the whole point of going onto a fixed rate mortgage is that you are taking a risk that interest rates will go up and you'll save money? And therefore, you're risking interest rates going down and losing money?

If people can go onto a fixed rate mortgage and pay less than people on non-fixed rate, then change to a non-fixed rate whenever they want, what is the point of banks offering fixed rate mortgages?

Someone, please explain this to me.

 

[GreenQueen]

Re: Extrication from Fixed rate mortgage?

In layman's terms.

Yes of course you fix your rate at the risk that it will go up or down. You normally cannot get out of a fixed rate mortgage before the period of time you fixed for is up without a penalty.

The reason why people are having a difficulty with fixed rate mortgages right now is because of the reduction in TRS on mortgage interest payments as announced in the budget.

 

[charliemacck]

Re: Extrication from Fixed rate mortgage?

The reason why people are having a difficulty with fixed rate mortgages right now is because of the reduction in TRS on mortgage interest payments as announced in the budget.

Yes, but that TRS applies to people both on fixed and non-fixed. A bank cannot know what a government plans to do as regards taxing mortgages at every budget, so my question still remains.

 

[Paulk]

Re: Extrication from Fixed rate mortgage?

If the Government can suddenly decide to change its TRS policy due to unprecedented economic circumstances, then there is absolutely no reason why they can't ask the banks to change their fixed rate policies (also due to unprecedented economic circumstances).

 

[chrisboy]

Re: Extrication from Fixed rate mortgage?

If the Government can suddenly decide to change its TRS policy due to unprecedented economic circumstances, then there is absolutely no reason why they can't ask the banks to change their fixed rate policies (also due to unprecedented economic circumstances).

You're right, they could.. But at the end of the day if the govt. are the main shareholder in the bank, why would they be letting you go to variable rate?

 

[Senna]

Re: Extrication from Fixed rate mortgage?

we are in a position where we will probably lose our home!

If anyone on here is in real difficulties and defaults on their mortgage repayments, then YES you will get out of your fixed rate.

 

[Berbatov]

Re: Extrication from Fixed rate mortgage?

If anyone on here is in real difficulties and defaults on their mortgage repayments, then YES you will get out of your fixed rate.

Is that a definite or mere speculation?.

 

[Bronte]

Re: Extrication from Fixed rate mortgage?

Is that a definite or mere speculation?.

My guess is that it's definite but on the quiet and not officially but they are doing it for people in trouble/arrears as for sure no bank can be seen to take someone (a family) to court to reposses if the couple had done their best to repay and coming off a fixed rate and longer term would have fixed the situation. There would be a riot.

Senna's point is probably that you have to miss a mortgage payment or two in order to get out of your fixed rate.

In relation to fixed rates I find that the level of penalty currently is somehow anti competative, is it me ? 10 to 20K to get out of these fixed rates seems an extraordinary amount. I understand there has to be a penalty to compensate the bank but that's a prohibitive amount for most people.

 

[charliemacck]

Re: Extrication from Fixed rate mortgage?

If the Government can suddenly decide to change its TRS policy due to unprecedented economic circumstances, then there is absolutely no reason why they can't ask the banks to change their fixed rate policies (also due to unprecedented economic circumstances).

Banks are private firms (well, at least for now!). Expecting them to change the details of a financial agreement based on what the government does, is like expecting Tesco's to drop the cost of wine and beer if the government raises the level of tax on alcohol.

I mean, obviously it would nice for people with fixed-rate mortgages if it happened. But the banks are under no obligation to do so.

 

[Kine]

Re: Extrication from Fixed rate mortgage?

I'm stuck in a fixed rate and feel really angry over it. My bank manager when I asked to change said I'd signed a contract and basically tough........ Howecer banks signed contracts too and all their debt is being cleared for them just like that. They should be told as circumstances are so unusual at thios time to let people out.

Yes, because it's that simple for the banks, there are no massive financial penalties for any arrangements made and they're rolling in the €€€€.

 

[MandaC]

Re: Extrication from Fixed rate mortgage?

I am lucky enough to be on a tracker (ECB +.5% for the life of the mortgage)

I think the once off option for people to come off their fixed rates would be a great idea, though I do think people are trying to blame the government/banks instead of simply just saying they made the wrong choice. Mea Culpa!

What I really find awful though are the penalties banks are looking for to release people from their fixed rates. How exactly are these penalties calculated does anybody know?

 

[Complainer]

Re: Extrication from Fixed rate mortgage?

Yes but it appears that NAMA will be buying the debts for less than actual value. So the banks will have to write down the value of these debts to some degree.

Are you getting mixed up between 'actual value' and 'book value', Liam? There is a huge difference between those two figures.

I am lucky enough to be on a tracker (ECB +.5% for the life of the mortgage)

I think the once off option for people to come off their fixed rates would be a great idea, though I do think people are trying to blame the government/banks instead of simply just saying they made the wrong choice. Mea Culpa!

It's not luck, Manda. Both you and I made conscious decisions to go with a tracker, knowing the risk that this carried. There is no way that those who took other risks should now be bailed out at the expense of the taxpayer.

Would those proposing a release for fixed rate mortgages also propose a release for those who over-borrowed, and are now unable to pay back due to the amount they borrowed?

 

[DerKaiser]

Re: Extrication from Fixed rate mortgage?

Would those proposing a release for fixed rate mortgages also propose a release for those who over-borrowed, and are now unable to pay back due to the amount they borrowed?

Dangerous question! I have no doubt that many people would think it would be justifiable, many people seem to feel anything that would put extra money in their pockets is fair.

 

[so-crates]

Re: Extrication from Fixed rate mortgage?

It's not luck, Manda. Both you and I made conscious decisions to go with a tracker, knowing the risk that this carried. There is no way that those who took other risks should now be bailed out at the expense of the taxpayer.

Hear, hear! Those on trackers took the risk of being at the whim of ECB rates, those on variable took the risk of being at the whim of their respective banks, those on fixed opted for a different sort of risk - they opted for stability and gambled on a rising market which hasn't come to pass. It isn't enough to declare now "unprecedented" and decide you want something different to what you signed up to. There isn't any clause in your contract to allow you to do that. Mortgages always carry risk. Despite the last few years protracted growth and almost universal employment it is always possible to lose jobs, lose income, be hit with new taxes, bear the brunt of punishing interest rate rises (or in this case drops), etc. In other words, these aren't unprecedented events, even bank nationalisations, credit issues aren't unprecedented. It is just that a sizeable proportion (perhaps even a majority) of people on fixed rate mortgages are probably in their twenties or thirties, recent property purchasers, stretched to achieve the mortgage anyway with little or no experience of truly hard times (no different from myself there) and now surprised that the world hasn't continued down the path it seemed to be in 2007 (although by that stage the credit crunch was already past infancy).

 

[Timbo]

Re: Extrication from Fixed rate mortgage?

This talk of fixed rates is all a bit strange.

People take out fixed rates in order to reduce repayment risk. You know exactly what your repayments will be. Anyone who took out a fixed rate in the past is in exactly the same financial position vis a vis their mortgage repayments that they expected to be when they made the contract.

So why the moaning? They got exactly what they wanted - surety in their outgoings. They are paying no more and no less.

 

[steviel]

Re: Extrication from Fixed rate mortgage?

You break your fixed rate deal without penalty, and I have to pay for it as a taxpayer. How is that fair? You took your chance, and in the long run it might still work out for you. You cant have it both ways!

 

[sanne]

Re: Extrication from Fixed rate mortgage?

I decided to share my opinion on this post a few days ago in the hope that there might be others like me that might take up the fight against the banks. Seems like there a lot of people out there who are angry enough to keep fighting to make this a political issue. Long may that continue and the best of luck to all of you that take on the good fight. This is winnable!

I was however, shocked and disappointed to read some of the comments from those that feel that I should not get out of my fixed rate mortgage. You are all certainly entitled to your opinion but sadly there was a nasty whiff of Irish begrudgery laced through many of those posts. There is even a smugness about many of the comments suggesting that I deserve the pain that my fixed rate mortgage brings upon me. Some even boast about the prized position of their own mortgage arrangement. Enough said.

 

[DerKaiser]

Re: Extrication from Fixed rate mortgage?

Not sure if I can say this, but were you not rapped over the knuckles for that post?

Thankfully most people here understand the concept of honouring a debt and a contract. You don't even have to know about finance, a simple understanding of how to make a bet would make you realise why it would be wrong for a bank to give in to your whims