Start Mortgages & their Interest rates.

Hi, need to roll out some discussions on this lender!
I would like to find out from other customers of Start Mortgages about their interest rates at present and how they feel about their treatment from this Lender.
When I remortgaged my home with Start Mortgages in 2007 there were quite a few Sub-prime lenders in the market. To the best of my knowledge the only sub-prime lender left standing through this banking crisis is Start Mortgages.
I have been thinking about this for a while and I now wonder if as Start Mortgages are now financially regulated the same as the Prime lending institutions, then are they still classed as a Sub-Prime lender, isn't lending at the moment to people in difficulty or above their financial means considered risky which I wouldn't imagine the financial regulator would be happy with this type of lending in the present economic conditions.
When I took out this loan with SM, I was told that my interest rate was based on how risky they saw me at the time, yeah sure my rate has come down along way from where it was as the ECB made their cuts over the past 18 mths but I find myself wondering as the threat is looming of rate increases how will they calculate my rate now?
As Start Mortgages calculate their customers interest rates based on a case by case basis then where do we stand now! How risky is a Sub-Prime customer after 3.5yrs of paying their mortgage.
I could pose all these questions to Start and I think I will but I want some feedback from others.
I feel scared that this Lender may raise their rates beyond other lenders just because they can...

Hi Graft

Start are regulated by the Financial Regulator in the conduct of their mortgage business just like any other lender. They are not deposit takers, so they don't face what is known as prudential regulation.

They are covered by the Consumer Protection Code and the Code of Conduct on Mortgage Arrears.

Interest rates are not regulated. Unless you have a fixed rate or a tracker, the lender can vary their rates as they see fit. The Irish Nationwide only passed on half the general rate cuts to existing customers, and the only option for those customers was to ask for a rate cut or to move. I was told at the time that there was nothing illegal in the Irish Nationwide's practice.

As I understand it, Start do not reduce the rate to reflect the fact that have been a good customer for a few years. During the good times, they were quite happy to see those customers remortgage with a mainstream lender. That is not an option any longer.

The Consumer Protection Code is out for consultation at the moment.It is being discussed here. You could make a submission that lenders should publish the policy for their standard variable rates.

I get the impression that Start did pass on the interest rate cuts over the years. I have not heard anyone complain that they didn't. They are still in the market and probably won't exploit existing borrowers.

Hi Brendan, thanks for your reply, yes that is the point that I wanted to make that Start mortgages do not publish a Standard variable rate and their customers seem to be at the mercy of whatever rate Start feels is appropriate.
I did fall behind with my mortgage last year but I communicated with them and brought any arrears up to date and my account is back in order with them.
During this time every conversation I had with them (and there were a few as they do phone constantly) they asked for my income details, I was reluctant to give them my income details but eventually did and an increase of 0.4% was applied to my loan for the following month, I feel like the calculate their rate based on your ability to repay.
They calculate each accounts rate based on their circumstances etc, I feel like I have no control over this, I feel that after a few years of repaying to them there should be some opportunity for their customers to attain a more secure footing have the ability to have a standard published variable rate.

If you have your original loan agreement can you check what it says about interest rates? does it gice any basis for it or description of the rate?

Did you get a letter with the latest increase?

are you in significant negative equity?

I did fall behind with my mortgage last year but I communicated with them and brought any arrears up to date and my account is back in order with them.

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If you were initially high risk and you have since fallen behind, although only temporarily, you would still be categorized as high risk. Even if the market was functioning well, you would not be able to move to a mainstream lender.

I would guess that the 0.4% rise was coincidental. I don't think that they apply interest rates selectively to individuals. The new Code of Conduct on Mortgage Arrears forbids penalties for those who fall into arrears. While it did not specify that a rate increase was a penalty, I think that is the interpretation which the Financial Regulator would probably take.

"If you have your original loan agreement can you check what it says about interest rates? does it gice any basis for it or description of the rate?

Did you get a letter with the latest increase?

are you in significant negative equity?"

Hi Millie,
Yes I have all original documentation so I will have a better read of it later. I did get a letter although they were late sending it to me, they said they had problems sending these letters out so I got my letter 10 days before they raised my rate which coincidentally happened right after I gave them our income details over the phone for the first time since I applied for the loan.
I am in negative equity, but its hard to know how much for, at a guess probably in the region of about €50,000.

Brendan Burgess said:

If you were initially high risk and you have since fallen behind, although only temporarily, you would still be categorized as high risk. Even if the market was functioning well, you would not be able to move to a mainstream lender.

I would guess that the 0.4% rise was coincidental. I don't think that they apply interest rates selectively to individuals. The new Code of Conduct on Mortgage Arrears forbids penalties for those who fall into arrears. While it did not specify that a rate increase was a penalty, I think that is the interpretation which the Financial Regulator would probably take.

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Hi Brendan,
when I say that I fell behind it was not seriously, I had financial difficulty just like everyone else in the country, we had our own business in 2007 which failed in late 2008, we are now both employed and our jobs are secure.
I think the point that I am trying to make is being missed and here it is:
I know the whole country is going to be subject to rate increases across the board but I am with a company that does NOT have a standard variable rate they charge their customers based on their circumstances!


After a number of years with a sub-prime lender surely there should be some way to attain a standard variable rate.
Start mortgages say that the rate they choose for each customer is based on their circumstances well god help their customers in this economy is all I can say.
I am in a good position to be fair, we have permanent secure jobs at present and I can cover my monthly mortgage costs but the outstanding loan stands at €500,000 and I feel scared that this company can apply measures to certain customers as they feel fit.
When we bought our home it was with one of the Prime Lenders, I wish I could go back as I feel like I have sold my soul to the Devil, I feel so stupid to have remortgaged with this company.
To give you another side to this, If I came into extra funds my first thought would be to be pay a bit off my mortgage but I can't do this as I feel if you let Start know you have any more means than they think you have they will put up the mortgage.
If I could turn back the clock

Start Mortgage interest rates

Hi
When we remortgaged our home due to financial pressure we were shocked at the interest rates but needed the money and had no alternative.At that time we asked the question that if after a period of time with a good repayment history would we be eligible for a rate reduction. We were told that after a period of three years our interest rate would be reduced.The rates did drop but it was only due to the ecb rates going down that made this happen.As we all know the ecb rate is due to rise in the near future.So in response to this we contacted Start
who responded by telling us that at no point has it been there policy to reduce rates other than those allowed by prevailing market rates. Unfortunately all we had was a verbal declaration and nothing on paper to back it up.Start Mortgages are a very cold company to deal with.We have made all our payments over the last 4.5 years with none missed.But they have us on the hook and state that the interest rate applies for the duration of the mortgage.They want good payers like us to swell there profits.There is no proper regulation to control the way they conduct
themselves.I regret the day i remortgaged with them.

Graftgirl said:

Hi Brendan,
when I say that I fell behind it was not seriously, I had financial difficulty just like everyone else in the country, we had our own business in 2007 which failed in late 2008, we are now both employed and our jobs are secure.
I think the point that I am trying to make is being missed and here it is:
I know the whole country is going to be subject to rate increases across the board but I am with a company that does NOT have a standard variable rate they charge their customers based on their circumstances!


After a number of years with a sub-prime lender surely there should be some way to attain a standard variable rate.
Start mortgages say that the rate they choose for each customer is based on their circumstances well god help their customers in this economy is all I can say.
I am in a good position to be fair, we have permanent secure jobs at present and I can cover my monthly mortgage costs but the outstanding loan stands at €500,000 and I feel scared that this company can apply measures to certain customers as they feel fit.
When we bought our home it was with one of the Prime Lenders, I wish I could go back as I feel like I have sold my soul to the Devil, I feel so stupid to have remortgaged with this company.
To give you another side to this, If I came into extra funds my first thought would be to be pay a bit off my mortgage but I can't do this as I feel if you let Start know you have any more means than they think you have they will put up the mortgage.
If I could turn back the clock

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Did you go with Start because you were refused by all the Prime Lenders?
If so were Start at the time getting you out of a hole- what would have happened if you had not got the Remortgage?

I have a Start Mortgage- regreat the day I took it out- very cold company to deal with- Wish I could turn back the clock- worry about the mortgage all the time as I am on my own.

Noreen B said:

I have a Start Mortgage- regreat the day I took it out- very cold company to deal with-

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All banks are cold companies to deal with. They are in the business of making money. Niceness does not come into it.