My article in today's Sindo"Irish mortgages twice as expensive as eurozone"

Duke of Marmalade said:
I hate to rain on the party but let me ask this question.

At the time when these mortgages were taken out weren't interest rates considerably higher?

So hardship indeed for anybody who has lost their job, but for the rest is this not just a moan that they are not getting the windfall benefits of ludicrously low official rates?
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When I took my mortgage with KBC in 2005 it was 2.69% when ECB rates were I believe 2.25%. I think it was a discounted variable of 1% for 12 months but I fixed after that discount was up for a few years so not sure what KBC variable was for the few years after that. All I know is the rate I am currently paying 4.5% is the highest I have ever paid over the 10 years I have had the mortgage even though ECB rates have never been as low

Aidan
 
Duke of Marmalade said:
I hate to rain on the party but let me ask this question.

At the time when these mortgages were taken out weren't interest rates considerably higher?

So hardship indeed for anybody who has lost their job, but for the rest is this not just a moan that they are not getting the windfall benefits of ludicrously low official rates?
Click to expand...


I take your point Duke, but i'm sure banks won't have any problems putting up the SVR when the ECB rate rises.

Therefore shouldn't they lower rates in a fair manner when the ECB rate is low?
 
I don't agree with your assessment. The whole point in the high court challenge taken by the Millars (http://www.irishtimes.com/business/...r-complaint-over-mortgage-rate-hike-1.1956650 ) was that the rates did not fall in line with the market. Judge hogan said a mortgage contract has to be fair. The banks here are not applying reductions in rates that are being applied in every other eu country right now. It is a justifiable moan particularly when our government own some of these banks.
 
For avoidance of doubt, I am not saying there is no issue here. At a very minimum we see the absence of competition seriously disadvantaging consumers. But the call to arms talks of extreme hardship. That could debase the campaign. Extreme hardship may have been caused by the loss of a job but hardly by mortgage rates falling by less than maybe they should.
 
I don’t think what the interest rates were when the Variable rate mortgages were taken out is relevant. When I took out my variable mortgage with Bank of Ireland I had two expectations:

1. That interest rates could go up or down.

2. That interest rates would be somewhat in line with market conditions (yes, the bank would make a profit – but the rate they would charge me would be somewhat in line with the market and other products that may be available).

I don’t think these expectations were unreasonable. If, when I took out my mortgage the contract had said: “These rates will only ever go up and they will not be in line with Market conditions – in fact we will charge you 100 times the ECB rate”.

Then obviously I would never have signed the contract.

This is not a case of the 300,000 affected people having taking out a Financial Product and then regretting it. This is a case of taking out a Financial Product & that product turns out to be something that no-one envisaged at the time. No-one (unless they were very clever) envisaged such low ECB rates or that the banks would not pass these low rates on to their existing variable rate customers.
 
Cost of high variable rates mentioned at PTSB meeting today (and Burgess also mentioned)
 
Great article! Clear and succinct. Does anyone know when the miller judgement will issue from the supreme court? Am going to ask my local opposition tds to table a Dail question on this.
 
I am just cautioning to tone the rhetoric - don't come like the water charges brigade. If current mortgage rates are causing you real hardship you should not have taken out the mortgage in the first place at even higher rates.

If lower oil prices were not feeding through to lower pump prices, the complaint is not that you can no longer afford to run the car, the complaint is that the system is dysfunctional and you as a consumer are being scr*wed, same with the mortgage rate.
 
Heard you on the Ray D'arcy show, Brendan. Made your points well about Trackers prob just about breaking even (which is probably a first for this to be highlighted on the airways) and why SVR's are being loaded (profitability for future sale etc).
I know you didn't have much time, but again there was no mention of the costs of the 100k+ mortgages in arrears and the ongoing damage they are causing in the banking system v's the lack of repossessions. And how they are/could be a major factor in the high SVR's
 
I agree with Sallym on this one. The net question regarding svrs is whether or not they are fair. Is a bank obliged to pass on rate cuts in accordance with market conditions?
Or can a bank penalise the svrs because of what is happening somewhere else in the bank? I don't think many people would sign up for a mortgage if that were the case. Brendan has done some interesting work on the banks, their profits and the real costs of non-repossessions and the real costs of trackers.
Fact is banks are turning a profit. The mortgage contract is between the individual and the bank.
That must be fair. It's clear that the svr mortgage contracts are not being applied fairly.
 
Boss you done well on RTE radio. Pathetic how the others turned on you for suggesting that there may be the odd strategic defaulter or that just maybe re-possession might sometime be justified. What can you expect from a shower of politicians and populists. You were well advised not to lose your cool with those guys - I'd have accused them of hypocrisy.

You are the original champion of this cause and you have stuck steadfastly to the clear argument that this is all about the absence of competition amongst mortgage lenders, and that has a lot to do with the extremely lenient re-possession culture.
 
Duke of Marmalade said:
Boss you done well on RTE radio. Pathetic how the others turned on you for suggesting that there may be the odd strategic defaulter or that just maybe re-possession might sometime be justified. What can you expect from a shower of politicians and populists. You were well advised not to lose your cool with those guys - I'd have accused them of hypocrisy.

You are the original champion of this cause and you have stuck steadfastly to the clear argument that this is all about the absence of competition amongst mortgage lenders, and that has a lot to do with the extremely lenient re-possession culture.
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+100

David Hall is a slippery one - and Claire Byrne is as sharp as a golf ball put them together with some politicians and you have a recipe for disaster.

The illogical groupthink in the country is just like in the bubble
 
Hi all,

First post here, a long time on looker... I didn't hear the RTE show today but I saw Prime Time the other night and Brendan I would just like to say thank you for the way you have raised this issue and grown support since the turn of the year.

I am a PTSB customer but as I took out my mortgage in 2013 I am on a managed LTV variable rate so I am in a much better position that an SVR customer, my current rate is 4.00%, this is my opinion is still to high.

While I hate the thought of people losing their homes I feel real resolutions need to be offer to people in arrears, the Government has kicked the can down the road for long enough now.
 
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