It's Official, Ireland's Great Mortgage Rate Rip Off

Sorry but that argument doesn't stack up either.

If there was no competition in our mortgage market, how do you explain the fact that rates have fallen and incentives have increased considerably since 2014? Do you think lenders are acting charitably.

Of course they aren't - they are competing to gain or retain market share.

We would all love to see even more players and more intense competition in our mortgage market but to suggest that there is no competition (or very limited competition) flies in the face of reality.

Incidentally, our mortgage market is not particularly concentrated by European standards.

Just three lenders also account for around 80% of all home loans in Finland for example.

https://www.suomenpankki.fi/en/Stat...-tilastoa-luottolaitosten-markkinaosuuksista/

Webster said:

Just three banks have a mortgage market share of 80pc, according to the Competition and Consumer Protection Commission, quoting Central Bank data.

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We've got two in Switzerland and most other countries and not that much better.

Webster said:

This lack of competition is one of the key issues to be looked at by the Competition and Consumer Protection Commission after it was asked to do so by the Government.

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It does not matter, because no matter what they 'discover' there is nothing they can do about it. Banks do not enter the mortgage markets outside their home base and those that have done so have faired badly. Investors tend to vote against boards that take on such high risk activities, when there are less risk opportunities around.

Webster said:

This might help to explain why we have some of the highest variable mortgage rates in the eurozone.

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Demand certainly plays a big role, every adult in Ireland seems to think buying property is smart idea so the banks have no problem laying of their funds. Contrast that with other countries where getting on the property ladder is not a hight priority... here in Switzerland buying property is considered a dumb idea, something you do when you can't find a place to rent or have too much cash.

Those suggesting that if interest rates were at Finnish levels you'd have very little default are not taking facts into account .

By adding up all the non-performing mortgages that the banks have given in various documents, which suggest 40,000++ that are not paying anything or such a low amount as to make it impractical, and compare that to Finland, you'll see the problem.

In most European countries, when you default and do not engage constructively, you are out of you house in 90 days and it has new owners within 6 months with very little legal fees attached .

Here you need several court appearances and 5-7 years of non cooperation before the bank has a chance of repossession.

And that's why two banks looked at entering the Irish mortgage market but decided not to.

jpd said:

Some consumers are ripping off all the other consumers by defaulting on their mortgages - is that not a RIP OFF too?

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And when the media finally wake up to that and start asking questions as to why other mortgage holders are paying for these scroungers , then the politicians, esp FF, will start changing their tune.

Circa 40,000 non payers being given a free ride by 600,000 paying mortgage holders .

peemac said:

Here you need several court appearances and 5-7 years of non cooperation before the bank has a chance of repossession.

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Yeah scandalous the way the banks never embraced the Insolvency service and vetoed PIAs. Some of them then went to great lengths to frustrate appeals under Section 115A by going to the courts to try and force the PIP, rather than the borrower, to make the appeal, hoping they wouldn't proceed because of adverse cost implications if the appeal was unsuccessful. The quickest way to solve NPL ratios is debt write downs.

demoivre said:

Yeah scandalous the way the banks never embraced the Insolvency service and vetoed PIAs. Some of them then went to great lengths to frustrate appeals under Section 115A by going to the courts to try and force the PIP, rather than the borrower, to make the appeal, hoping they wouldn't proceed because of adverse cost implications if the appeal was unsuccessful. The quickest way to solve NPL ratios is debt write downs.

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The legislation states that the PIP makes the appeal and this was not being done, hence an appeal by one of the Banks.

PIA's are an excellent resolution for distressed borrowers and I'm surprised more people don't use the insolvency legislation. The Banks get screwed on PIA's with writedowns forced on them.

In terms of the repossession rates, it's prohibitively costly and takes too long to repossess a property. There was a story in the papers recently about a well known anti eviction activist who had not paid anything off the mortgage in ten years and owed over €2 million. While that is an extreme case, go down to any Circuit Court and you;ll see Banks trying to get possession orders and regularly, nothing has been paid for several years.

Unfortunately, if you take out a mortgage, and can for some reason, no longer afford to pay it, the Banks will generally show forebearance but if you haven't resolved the issue within a year, the Bank should be able to repossess the house and sell it on. The unfortunate consequence of that, is that the borrower has nowhere to go. That is a matter for the Government n my view, rather than a matter for the Bank in question.