Sara Hogan: I want justice for PTSB variable rate customers

Brendan Burgess said:
The fact that it has always been this way does not mean that it isn't unfair.

But mortgages are different - they are charging a different rate for the duration of the contract because they can.
Click to expand...

BB I'm not getting you. It's the commercial world, unfairness doesn't come into it. Profit is all that matters. Big customers get to pay lower rates and get higher savings rates. Unfair or a fact of dealing with banks?

And your argument about duration is incorrect.

Example, tomorrow PTSB offers a 10 year deal at 4%, we have Greece exiting the Euro on Tuesday, markets spooked and David McWilliams etc say that rates are going to rise, 20,000 people lock in. Rates go to 7%, do we say they were clever and the rest stupid or do we say it's 'unfair' the bank doesn't let us have 4%?
 
Hi morgvar,
Yes - this is set up on facebook. It's called svr mortgages ireland. I looked for it after I saw the article. There are only a couple of hundred likes so far.
 
PTSBCase said:
Hi morgvar,

Yes - this is set up on facebook. It's called svr mortgages ireland.

I looked for it after I saw the article. There are only a couple of hundred likes so far.
Click to expand...

Thank You.
Brendan/Others; Can this be prominently displayed/promoted on website?
 
Link is working, looks impressive too, ( but I've no clue about Facebook). Googling it did not work for me, and handy for those campaigning to have the link posted. So you were great to put it up.
 
Brendan Burgess said:
1) "Sara is not the same as the others because she does not meet the Loan to Income criteria"

Irish lenders do not give lower rates to people with lower LTI ratios. The main risk comes from LTV and that is how the lenders price their mortgages. Sara is a 60% LTV customer with a clean ICB record. I see no reason for justifying a higher charge for her.

But even if this were justified, the reality is that the bank ignores the LTI ratio. New customers get better rates than existing customers with the same LTV and LTI ratios. That is fundamentally unfair.
Click to expand...

I don't think anybody suggested that Irish lenders give lower rates to people with lower LTI ratios. However, it is problematic to object to the fact that an existing individual borrower is charged a higher rate than a new borrower when that individual would not qualify for a loan as a new borrower.

In any event, it is disingenuous to suggest that Sara is in any way a prisoner of PTSB. She is perfectly entitled to switch to another mortgage provider. The fact is that she is no longer an attractive candidate for other lenders - she has become a sub-prime borrower from an underwriting perspective.

None of this is to suggest that the cost of credit is Ireland (including Sara's SVR mortgage) is not too high as a result of our reluctance or inability to resolve the large number of non-performing loans on our lenders' balance sheets.
 
Not sure I understand this campaign banks are businesses with shareholders ( like myself ) who wants the bank to be profitable not reducing interest rates when they are only getting back profitable. Business's overcharge that's life comparing to Europe doesn't make sense could compare hundreds of things , cost of credit doesn't make senses either credit cards interest is huge should we reduce that ? Banks need to be profitable for there shareholders don't see the problem with overcharging especially if there is little incentive to change with all competitors around the same price.

It's not nice if your struggling to pay mortgage so I apologise if I'm offending anyone that is on a high svr and annoyed but there are others that want banks to profit as they have invested in banks.
 
I think the banks would still be making profits even if the SVR was 3% across the board. We have already bailed them out. The banks are wasting the profits anyway on the likes of the wer friendly TV adds which we know are not true.
 
martin57 said:
I think the banks would still be making profits even if the SVR was 3% across the board. We have already bailed them out. The banks are wasting the profits anyway on the likes of the wer friendly TV adds which we know are not true.
Click to expand...

Banks need to advertise, it's normal practice as it's a business. Are PTSB not loss making and any profits will have to go back to the government to pay back their bailout. In other words it goes back to taxpayer in the form of tax payers not having tax increases.
 
If my company was not making a profit there would be no bonus and no pay rises only pay cuts. What's the point in advertising lies.
 
Apologies for going into patronising teacher mode:oops:

The mortgage rate any individual pays is made up as follows:
(a) The wholesale cost of funds generally (ECB rate is good proxy) +
(b) Risk of systemic default in a particular market +
(c) Risk of default by particular lending institution + (a + b + c = cost of funds)
(d) Risk of default by borrower -
(e) Less collateral payback +
(f) Cost of administration +
(g) Cost of capital including "normal" shareholder profits +
(i) "Economic rent" generally in the marketplace +
(j) Additional economic rent for an individual or customer segment

The last two are the offensive items. Economic rent is the technical term for making money for buckshee and is meant to be eliminated by competition.

The "campaign" is essentially arguing that there is egregious amounts of (i) and Sara additionally argues that there are egregious amounts of (j) for her particular market segment, possibly to compensate for "negative" economic rent enjoyed by Tracker customers.

I will not address Sara's particular claim in this post but rather concentrate on the claim that compared to other Eurozone countries there appears to be egreg. amounts of (i) in these parts. Prima facie that amounts to c. 2% interest or about half the total price, which certainly appears to be egreg:oops: But before deciding that this is conclusive evidence we should see whether any of the other categories might partly explain that difference. It seems to me that despite all the pre-election backthumping about the second coming of the stripey one that Ireland must still have considerably higher risks under (b), (c) and (d) in the above list compared with say France or Germany. How do our mortgage rates compare with Greece?

But the real differentiator is (e), it scarcely applies in practice in Ireland. Back in the good old days the banks probably convinced themselves that because of (e) mortgage rates could be a fraction of say car loan rates or credit card rates, they never really had to test this assumption. But the crisis has shown that (e) is an illusion. To my mind, unless (e) is addressed mortgage lending is a lot more risky in Ireland than elsewhere. Even 4.95% seems egregiously low.:(
 
Last edited:
MorgVar said:
Futures I fail to see the point of your comment. Is your motive to pick holes in this excellent personal article or to support this campaign?
Are you personally affected and what are doing to rectify situation?
Click to expand...

I wish Sara would be more thorough in her explanation of why SVR rates are so high. A lot of it's got to do with arrears and a lack of repossessions. Sara should mention this and not just focus on the big bad bank.

I'm not affected; I have a tracker currently (I previously fixed)and I'm sick of being accused of being the problem.

The bank offered Sara a contract. She accepted. I fixed for 5 years and kicked myself as I saw ECB rates collapse - that was my decision. I'm now paying half of what I used to pay - which is some consolation for buying near the peak of the market... grrr...
 
futures said:
I wish Sara would be more thorough in her explanation of why SVR rates are so high. A lot of it's got to do with arrears and a lack of repossessions. Sara should mention this and not just focus on the big bad bank.

I'm not affected; I have a tracker currently (I previously fixed)and I'm sick of being accused of being the problem.

The bank offered Sara a contract. She accepted. I fixed for 5 years and kicked myself as I saw ECB rates collapse - that was my decision. I'm now paying half of what I used to pay - which is some consolation for buying near the peak of the market... grrr...
Click to expand...

Foresaw ECB rate collapse?.....that just made my day :)

The banks wont get away with these rates for much longer, not when its an election issue.
 
jathclare said:
Foresaw ECB rate collapse?.....that just made my day :)

The banks wont get away with these rates for much longer, not when its an election issue.
Click to expand...
what do you mean? :confused: "I fixed for 5 years and kicked myself as I saw ECB rates collapse" means I had to pay fixed while I watched ECB rates collapse

I fixed and "lost out" when the ECB rate fell - but I didn't complain.

Of course I didn't actually lose out - just had to have the media tell me about the great news for homeowners everytime the ECB cut
 
Last edited:
Futures,
I think you may have missed the point of Sarahs article. Sarah took out a variable rate mortgage with PTSB. A variable mortgage , by definition is a mortgage which varies in accordance to market conditions ( this is the wording on my own standard variable rate mortgage ). Sarah is honouring her part of the loan contract , she is paying her loan in full. However her bank are not adhering to the terms of the contract. You suggested that Sarah should do more research in to the arrears and repossessions which PTSB are suffering . With all due respect this has nothing whatsoever to do with Sarah and she should not be concerning herself with these issues. Also I think it is unfair to suggest that Sarah is blaming you for having a tracker mortgage. I do not think that she is placing any blame on you or any other holder of a tracker mortgage. Certainly she may be somewhat envious of the type of mortgage that you hold but she is placing the blame for the high interest rates on the greed of the bank, not its customers.
 
You must log in or register to reply here.
Back
Top