Sorry opinion not option
Sorry opinion not optionMy point also is it should be rules based just not what's in place. My sympathy certainly doesn't lie with the banks who now even though are posting huge tax free profits can still sow an idea of repossessions equaling lower svr rates. Public policy was an option at some stage
I think the key point you seem to be missing - or purposely ignoring - is that it is competition that would have the effect of downward pressure on SVRs. If a lender cannot enforce security efficiently and without massive cost then this needs to be priced into the interest rate charged to customers. Mortgage lending in Ireland is quasi-unsecured so until we create an environment whereby lenders can rely upon the security offered we’ll continue to have too few of them in the market, and consequently higher rates.My point also is it should be rules based just not what's in place. My sympathy certainly doesn't lie with the banks who now even though are posting huge tax free profits can still sow an idea of repossessions equaling lower svr rates. Public policy was an option at some stage
Not only that, but Ireland is only so big a market, for any product.Mortgage lending in Ireland is quasi-unsecured so until we create an environment whereby lenders can rely upon the security offered we’ll continue to have too few of them in the market, and consequently higher rates.
I just looked up NZ SVR rates.....Good God!Not only that, but Ireland is only so big a market, for any product.
Many British and European retail chains have come to Ireland since the 90s as there are enough consumers with spending power to make it worthwhile.
Sadly there will only every be so many new mortgages written in Ireland. There are big fixed costs associated with mortgage provision - underwriting, a branch network,regulatory, etc. That can only be spread across so many customers. It's similar for SME lending where there are basically only three players. New Zealand - a market pretty similar to Ireland - basically has four banks of any consequence and foreign banks aren't interested in market entry as its so small.
Even if collateral could be easily secured in Ireland, I don't think mortgage lending will ever be as cheap as euro-area levels.
The average rate charged on all outstanding mortgages in Ireland (including low-margin trackers) is actually bang in line with the Eurozone average.Even if collateral could be easily secured in Ireland, I don't think mortgage lending will ever be as cheap as euro-area levels.
My point was pretty clearly about new lending, where Irish rates are indeed higher.The average rate charged on all outstanding mortgages in Ireland (including low-margin trackers) is actually bang in line with the Eurozone average.
There are very little fixed costs to start originating and servicing mortgages. A branch network is the very last thing that a new lender would think about setting up. Almost everything can be outsourced for a set percentage of the balances written / serviced. There are some fixed costs, but they aren't material.There are big fixed costs associated with mortgage provision - underwriting, a branch network,regulatory, etc
It might be a small market, but there are at least a dozen lenders offering mortgages in the main cities. I know one or two are subsidiaries of others, but there's a lot more competition there compared to here.New Zealand - a market pretty similar to Ireland - basically has four banks of any consequence and foreign banks aren't interested in market entry as its so small
Just remember they still have offset mortgages available.I just looked up NZ SVR rates.....Good God!
That's interesting. I had heard the opposite first hand from people in the industry.Whether a new lender is interested is all down to return on equity, with the amount of equity a bank lender must put up being driven by bad debts of which enforceability of security is a major factor.
There are very little fixed costs to start originating and servicing mortgages. A branch network is the very last thing that a new lender would think about setting up. Almost everything can be outsourced for a set percentage of the balances written / serviced. There are some fixed costs, but they aren't material.
Well, the last time I set up a bank... What fixed costs are there? Dilosk and Finance Ireland are both able to turn a profit on very small portfolios.I had heard the opposite first hand from people in the industry.
Because of the amount of their own capital they need to put up, and the fact they can lend more elsewhere for the same capital.So why have we not seen any new entrants?