Life Loans are back

My husband was listening, he said there was one sensible man on (must have been you BB) otherwise he felt it was all about greedy adult children throwing their toys out of the Pram when they realised there was less value in the parents estate then they had thought.
 
gianni said:
I think a major issue is the low level of financial literacy and numeracy.
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I think there is a load of sculduggery going on. Money wasn't actually needed or too much was borrowed for holidays and I suspect in many cases with pressure from children who wanted the money.
 
Hi Bronte

Thanks for your brilliant analysis here:

Bank of Ireland's Life Loan on Joe Duffy

Yes, a bank could offer such a scheme now. There is no reason not to. An elderly person can sell their house and give away the proceeds. The existence of the Fair Deal scheme does not stop them from doing so, unless they are already in the scheme. Brendan
www.askaboutmoney.com

I found it just before taking the call.

Brendan
 
Clamball and RedDevil are on the ball. Joe never wants the truth, he ramps it up, controls the narrative in order to get more people on about the bad banks, evil lenders etc in order to keep the listeners calling in. Hall feeding the flames as he's a populist.
 
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Monbretia said:
Someone say there are other options but no says what they are, there isn't unless your children can raise the money to give you.
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What about the Housing Adaptation Grant scheme?

Housing Adaptation Grant for People with a Disability

Grants for alterations that need to be made to a home to make it suitable for a person with a physical, sensory or intellectual disability or a mental health difficulty.
www.citizensinformation.ie www.citizensinformation.ie
 
Brendan Burgess said:
I am wrecked. Are there any bars open?
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Unfortunately there is no wide reaching forum for these issues to be discussed rationally (AAM is great but it doesn't reach 400,000 people daily).

You were literally quoting verbatim from the BOI literature that was supplied at the time while callers were giving approximate figures. Some callers even admitting they were not exactly sure of the details.

The facts were glossed over. The callers feelings were taking centre stage.

I think RTE were failing in their public service remit, in this instance.
 
RedOnion said:
Attached are example BOI Life Loan brochures from 2004 & 2007.
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Red.

They were such a great help to me. Thanks.

I had sent them into the show and while Joe Duffy had not seen them before going on air, I don't think he will be able to read them and make another show on this product.

There was no mis-selling of this product.

Brendan
 
Allpartied said:
The interest rate is too high and do you know why? Because of programmes like yours Joe.

Classic.
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I didn't get a chance to finish this point.

The banks won't do these loans because of the reputation risk 15 years later when the kids go onto Joe Duffy.

In the UK, you can get a Life Loan for under 3%. That is because there are many providers.

We have only one provider and only one product.

Brendan
 
Despite Brendan's valiant efforts it looks like the kind of products available in the UK will not be available in Ireland.

Ironically, as he pointed out on the programme, the loans only appear astronomical because of the high interest rates charged, which is due to the total lack of competition.

Pensioner mortgages, lifetime loans with various repayment options, or rollover loans, interest only products, retirement loans ( up to age 95!). All available from a range of providers in the UK.

Lots of people are sitting on huge assets, which they have paid for their whole lives, but living, day to day, on the state pension.

With proper advice and informed education of borrowers, this could be a god send for many people.
 
Allpartied said:
Ironically, as he pointed out on the programme, the loans only appear astronomical because of the high interest rates charged
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At the time these products were available before, the rate was relatively competitive. In March '04, the yield on 10 year government debt was c. 4.2%. the rate available on these was 6.25% fixed for 15 years.

The rate only appears high because rates have fallen so much since.
 
The solution to all this negative publicity is only give life loans to someone with no children... but that would probably fall foul of some pesky equality legislation.
We didn't hear from all the people who were happy with the loans, presumably cos there were none of their children on whinging about their lost inheritance.
 
RedOnion said:
At the time these products were available before, the rate was relatively competitive. In March '04, the yield on 10 year government debt was c. 4.2%. the rate available on these was 6.25% fixed for 15 years.

The rate only appears high because rates have fallen so much since.
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That's true, but the current provider, Spry Finance is still charging over 5% interest. After 20 years a 100k rollover loan would cost 200k in interest, leaving a repayment charge of 300k.

Whereas the UK equivalent, charging 2.7% would cost 72k, leaving 172k to repay.

The reason, as Brendan pointed out, is because no main street bank wants to touch these products with a barge pole. This is mainly due to the adverse publicity they will get, 20 years down the road, when they look to get the loan repaid. So, we are left, with one provider, who can charge as much as he can get away with. People will still avail of this product, it will just be much more expensive than it is in other countries.
 
odyssey06 said:
The solution to all this negative publicity is only give life loans to someone with no children... but that would probably fall foul of some pesky equality legislation.
We didn't hear from all the people who were happy with the loans, presumably cos there were none of their children on whinging about their lost inheritance.
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Not so sure. Where there's a will, there's a relative.

Aggrieved nieces/nephews would be the order of the day!
 
If anyone wants to compile a list of serious factual errors in the two shows it would be well worth sending it to Joe Duffy. Off the top of my head.

1) You can't pay a Life Loan off early - yes you can.
2) You can't part pay a Life Loan off - yes you can.
3) If you pay a Life Loan off early you must pay all the interest for the remainder of the term up front - No you don't. You pay a break fee.
4) You can waive the requirement to consult a solicitor. From the brochure "Do I need a solicitor? Yes. It is a condition of the loan that all borrowers obtain independent legal advice. You may also wish to involve your family or anyone else likely to be affected by your decision."
5) David yesterday: 25k turned in 85k in 12 years - repeated multiple times ( it was IR£25k and it was 14 years)
6) James Smith today: €12k borrowed in 2002 became €43k by 2012.
7) They didn't tell you the implications of compound interest - here is the extract from the brochure
5285


8) Can't remember it exactly but a woman said that her mother had borrowed €50k and it rose to €100k. When they rang BoI to pay it after the mother died, BoI told her that she was very lucky, that a week later they would have taken the whole house worth €300k.
9) Minor one: The interest rate after 15 years is 3% fixed. No it's not, it's 3% variable.

I am sure that there were others.
 
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gianni said:
Not so sure. Where there's a will, there's a relative. Aggrieved nieces/nephews would be the order of the day!
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They don't have the same emochunal standin as a (grieving) son or daughter.

People on the show were using 'compound interest' as an exclamation point, as if they were shocked *shocked* that such a thing existed and happened to ordinary people.
 
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