Pepper reduces some variable rates

Pepper Advantage is to begin notifying over 9,000 residential mortgage customers of decreases in their variable mortgage rates over the coming days.



The decision to lower rates for certain customers follows rate reductions by the European Central Bank (ECB) and is based on the criteria set out in Pepper’s variable interest rate policy.





Rate decreases will range from 0.25% to 1%, and the majority of the customers receiving this initial reduction will receive decreases of between 0.35%-0.5%.



The current reductions apply to those Pepper Advantage customers who have seen the highest increases to date since the ECB incrementally started increasing rates in July 2022.



Pepper continues to review the situation for remaining customers and subject to further ECB rate reductions, expects to be in a position to notify more customers of reductions in their variable rates in due course.

A small bit of good news for all of us in mortgage limbo!

Has anyone received written notification of a rate reduction from Pepper yet ?

Yes from 8.5% to 8.15%, only received the letter in the last couple of days. I have applied for a switcher and praying they will accept me as the rate is so poor. I would love to hear if anyone has actually been successful in switching but from what I’ve read here it seems virtually impossible

Wicklow1 said:

Yes from 8.5% to 8.15%, only received the letter in the last couple of days. I have applied for a switcher and praying they will accept me as the rate is so poor. I would love to hear if anyone has actually been successful in switching but from what I’ve read here it seems virtually impossible

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Good luck with the switch I’ve been unsuccessful myself in the past going to try again next year . Currently paying 6.65 % with no notice of a reduction yet .

anderson07 said:

Good luck with the switch I’ve been unsuccessful myself in the past going to try again next year . Currently paying 6.65 % with no notice of a reduction yet .

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I’m sorry to hear that. Hopefully the reduction letter comes shortly to you. I will update here if I get the switch, I went about it previously also but was told it was unlikely. I have my fingers crossed that it works out this time!

I’m following all things vulture funds/mortgage prisoners/mortgage switching for a good while now. I’m starting to think that the biggest barrier isn’t the ability to afford switching to a new bank, but the stigma attached to why a borrower is sold to pepper and other fund managers. It seems to be a big red flag to not getting involved with the borrower at all.

I assume that in main stream banks and credit unions the culture is not to entertain applications from vulture fund switchers.

Am I wrong here? ….I’ve just never heard of anyone being successful in switching back to a bank.

REDRUNNER said:

Am I wrong here? ….I’ve just never heard of anyone being successful in switching back to a bank.

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I would expect that lenders would judge applications on the facts - e.g. were there missed repayments, arrears. restructuring/rescheduling etc. along with the usual ones such as the applicant's income/debts, ability to repay etc. Not merely on the fact that a person happens to have a mortgage with a vulture fund. But most (although not all) of the loans with vultures are with them for a reason - i.e. they were in some way non-performing/restrcuctured etc.

ClubMan said:

I would expect that lenders would judge applications on the facts - e.g. were there missed repayments, arrears. restructuring/rescheduling etc

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As I’d also expect….but I’d be sceptical about it, I’d say in many institutions there’s a special bundle for vulture switchers, with a red “application denied” stamp conveniently positioned beside them.
We owe 150,000 our house is worth 400,000 that’s an LTV of 37.5
I gross 33,500 & my wife 21,000 we are 18 years into the mortgage with 22 years to go. When we had kids 8 years ago we applied to extend the loan term in order to make the payments more affordable….we were also offered a reduced interest rate for 5 years, so I took it. Technically with the reduced interest rate we were in the non performing loans bracket… even though we never missed a payment. At the end of the 5 year’s KBC sold us on to pepper.

No Bank or CU will accept us even though we have never missed a payment.
If we can’t switch (my point being we shouldn’t be high risk)…I don’t see how the “Vulture fund stigma” is not in some way a factor here.

REDRUNNER said:

Technically with the reduced interest rate we were in the non performing loans bracket…

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Isn't that your answer so? Your loan may have been categorised as non-performing so that, rather than who your lender currently, is maybe the deciding factor?

ClubMan said:

Isn't that your answer so?

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No I don’t think it is, it was all an agreed increase of the term length of my mortgage. I’ve been out of that reduced interest rate since 2019. As I’ve said I’ve never missed a payment of the exact amount due. If it’s a case that I’m in a bracket that will never be allowed to switch because I entered into an agreement to increase my term loan….then maybe there are two piles of applications beside that red stamp…it’s all being halted by the banks when they see vulture funds are involved….surely not because a young family increased the loan term in order to create an affordable repayment, many years ago.
If a young couple went to the bank with 250,000 equity…earning 50,000 + P/A looking to borrow 150,000 it should be very straightforward….throw the vulture fund into the equation and it’s a very different matter… not only are we falling at the first hurdle…but as I’ve been saying, I suspect we are not even allowed to enter the race.

Synopsis...

Pepper Advantage, the mortgage services provider used by a number of investment funds for Irish loans acquired after the financial crash, is to notify 9,000 residential mortgage customers of further decreases in variable rates on their loans next month.

It said on Friday its decision to lower rates for certain customers is linked to rate reductions previously announced by the European Central Bank (ECB) and is based on the criteria set out in Pepper’s variable interest rate policy.

Rate decreases being announced will range from 0.35 per cent to 0.5 per cent. The majority of customers receiving the reduction will see decreases of 0.5 per cent.

The reductions apply to customers who have experienced the highest increases since the ECB implemented ten consecutive rate increases beginning in July 2022

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