Pepper charging 4.75% variable rate

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Eureka101

Registered User
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74
4.75 ‘Variable’ with Pepper.....
68% LTV
Mortgage performing
Unable to switch....
Mortgage was taken out with a bank ( NIB then Danske ) and is now mired with a Vulture fund.
There should be legislation passed to force Pepper to offer other rates based on LTV, fixed or variable.
According to Mr Donohoe, the same consumer protections apply when a loan is sold on to another entity and that the Central Bank has recently put measures in place to make it easier for consumers to switch to a different mortgage provider...
Obviously this doesn’t take into account the many thousands that can’t switch nor the services and options that were available to us when the loan was with a bank but are no longer available with a Vulture Fund.
Mortgage has increased by €120 in the last 2 years when our LTV is reducing..
Pepper’s level of customer service would even raise eyebrows at Ryanair and yet the Government permits this shoddy service and overcharging in our country.
 
Hi Eureka

That is a point which I have often made in public and in private.

I understand that the Central Bank is concerned about this issue.

You should write to the Governor of the Central Bank
And you should write to Paschal Donohue
And you should contact your own TDs about it.

This is what the Governor said 5 years ago and nothing has been done since

However, I would make an exception (to the decision not to control mortgage rates). The committee will presumably be considering legislation in the near future about the mortgages that are sold to non-banks, ones that are simply harvesting those mortgages without getting involved in new business. It may be that there should be some limitation on the degree to which they could deviate from market practice. What locks the standard variable rate contract into reality is the fact that it should be the rate that is charged by the lender on new and old business, more or less keeping lenders in line with market conditions. However, if an entity is not making new business, it might not have this natural restraint.

Governor Honohan's comments on whether the Central Bank should control mortgage rates

On Nov 26th, Governor Honohan appeared before the Oireachtas Finance Committee and got some very searching questioning from Michael McGrath, Kieran O'Donnell and Pearse Doherty. The full transcript is here and is worth reading. But here are some critical extracts on whether the CB should have...
www.askaboutmoney.com
 
Pepper can't stop anyone switching.

But other lenders refuse to take people for the following reasons
  1. Income reduced since they took out the mortgage - for example took out the mortgage as a couple with two incomes and now one is minding the children
  2. Mortgage restructured or mortgage arrears
  3. A poor credit history due to some other loans
  4. Older customers with not enough years left to pay the mortgage in full
  5. A fall in LTV - less common these days.
 
Hi David_Dublin
Pepper are not stopping us from switching.
Our current personal & financial situation is.
Our mortgage is performing and has been paid In full, every month for the last 13 years.
Other than the fact we had the misfortune to have our mortgage with a bank that pulled out of the country, we could be leveraging our LTV and reducing our monthly payments by around €400 per month.!
This money would be used to further pay down our mortgage and free up disposable income to re invest in our economy.
Instead the Central Bank & MR Noonan thought it was acceptable to allow the biggest financial commitment of ours and many thousands of others to be simply flogged to the highest bidder with scant regard for consumer protection. It simply solved a problem for them at the time and they didn’t give a monkey’s.
I took out my mortgage with a bank, not a shark and I would like it returned to a bank or at least have similar banking privileges reinstated.
The only solution pepper have for reducing our rate is to fill out a MARP form...
 
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Sorry to hear that, sounds like an incredible unfair thing that has happened, I hope your situation improves.
 
Eureka101 said:
Hi David_Dublin
Pepper are not stopping us from switching.
Our current personal & financial situation is.
Click to expand...

If you wanted to share some details, the site is usually good at wargaming solutions that could help you get on a path to leaving Pepper?
 
If your personal financial situation makes it impossible for you to switch, I am wondering what you would expect from any other bank. Your risk profile seems to be high (high LTV? Credit rating?) why do you therefore think you should get a rate that reflects a lower risk, from any lender?
 
Hi newirishman,

LTV is 68% so not particularly high, mortgage is performing and credit rating is unblemished.
To apply for a lower rate with a bank, it’s my understanding that I simply provide a valuation of the property to prove my LTV.
Switching however is treated as a new loan and therefore I accept our current circumstances may not meet the criteria for a new mortgage. This is not unique to us as many people’s circumstances change after original drawdown so switching is not a given for many..
Therefore my point is that I expect to be treated the same by the Vulture Fund regarding LTV rate reductions in the same way a customer of a bank would be.
Is it too much to ask to be treated reasonably?
After all, my mortgage was originally drawn down with a bank and the Minister for Finance states that ‘the same consumer protections apply when a loan is sold on to another entity’ when clearly they are not the same otherwise the Vulture Fund would be obliged to reasonably facilitate the opportunity to reduce the rate based on LTV which is currently afforded to bank customers.
This all comes back to weak consumer protection.
 
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Eureka101 said:
There should be legislation passed to force Pepper to offer other rates based on LTV, fixed or variable.
Click to expand...
Pepper are complying with the relevant legislation by charging the rates that Dankse have published on their web site for standard variable rates.

There is no legislation requiring Dankse, or any other banks, to offer a suite of LTV interest rates.

Jim Stafford
 
Eureka101 said:
I accept our current circumstances may not meet the criteria for a new mortgage
Click to expand...
Have you tried switching to another lender?

I would have thought that a low LTV, coupled with a 13-year unblemished repayment history, should be attractive to another lender.

Bear in mind that switcher mortgages are exempted from the Central Bank's LTV and LTI limits.
 
I’m all for bashing the banks when they misbehave. However, in this case I think there’s no issue with them charging 4.75%.
 
Jim Stafford said:
Pepper are complying with the relevant legislation by charging the rates that Dankse have published on their web site for standard variable rates.

There is no legislation requiring Dankse, or any other banks, to offer a suite of LTV interest rates.

Jim Stafford
Click to expand...
That as maybe Jim but it’s hardly in the best interests of the consumer nor the wider economy as a whole.
 
Hi Eureka
As I said a year ago, chase the Central Bank and the politicians on this.

If we don't allow repossessions when people go into arrears, everyone else is going to pay very high rates.

Pepper could increase the rate to 10% in the morning and there is nothing that the Central Bank or the government could do about it. They would be complying with their contract and the legislation.

Brendan
 
So Pepper, having bought the mortgage at a discount from Danske (whatever that discount was) are charging a sub-prime lending rate to a performing mortgage holder who is not in arrears. It may not be illegal but that doesn't mean it doesn't stink to high heavens.

Might be best to speak to a mortgage advisor to see if he can assist
 
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