"Variable rates set to become major issue in General Election"

The way I see it there are 3 main things that need to be highlighted for the general election.

1. Consumer protection codes not being enforced, FSO not exercising its powers unfair lean towards the banks.
2. Very unfair terms in the mortgage contract, one side has complete control over the rate.
3. Unjustifiably high interest rates, profiteering/cartel by the banks because they can do it.
 
Nothing is going to happen in the mortgage market until rates start to rise - whenever that is.

Those on tracker mortgages will then start paying their way, rather than being subsidized by the STV market like they are currently.

I think that a probable scenario will be something like this; if rates rose, say, 2%, those on 1% trackers would pay 3%, but those on, say, 3.5% STVs might only pay 3.75%, or some such.

Remember that the current rise on the market is predicated entirely on STVs not getting out of hand. If any sudden move in interest rates was passed on fully to the STV market also, we would very quickly have another 2007/08 scenario. It is the tracker market that will carry most, if not all, of the rise in rates, in my opinion.

But, when that happens is anyone's guess.

D.
 
Dinarius said:
Nothing is going to happen in the mortgage market until rates start to rise - whenever that is.

Those on tracker mortgages will then start paying their way, rather than being subsidized by the STV market like they are currently.

I think that a probable scenario will be something like this; if rates rose, say, 2%, those on 1% trackers would pay 3%, but those on, say, 3.5% STVs might only pay 3.75%, or some such.

Remember that the current rise on the market is predicated entirely on STVs not getting out of hand. If any sudden move in interest rates was passed on fully to the STV market also, we would very quickly have another 2007/08 scenario. It is the tracker market that will carry most, if not all, of the rise in rates, in my opinion.

But, when that happens is anyone's guess.

D.
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Hi Dinarius , I hope you're right that they will leave the SVR'S alone for the most part when the rates do rise but I certainly won't be taking that for granted with the form our dasterly banks have shown to date. You are correct with the point you make re what happened in 2007/08 but if they try that they'll have a lot more re - possession cases on their hands with the numbers of people who won't be able to cope with the repayments, If say the ECB went to 3% and at the current differential between trackers and us we'd be up to 6-7%, I know what ll be happening my apt keys. As they've interfered in the rental market by regulating the rates an increase wouldn't be possible for a long time after the rate increase to compensate for these rises. I agree by the way with the rent regulation and I'm not a landlord but they were able to interfere with that side of things but according to themselves, namely the government and the central bank, when abdicating responsibility they can't interfere in rate setting. On the subject that this thread is really about roll on the campaign and my chance to give them a taste of what it's like for SVR holders and this time an agreed reply won't be good enuf, you can fool some of the people some of the time but you can't fool all of the people all of the time, please do the same, as many of us as possible .
 
Hi Tony,

Thanks for the reply.

I stand by my point that everything that's happening now is predicated on the SVR market. So, those buying are buying at rock bottom in terms of % rates (whether you agree, or not, that the margin the banks are taking is extortionate) and when rates do rise, it is those on trackers who will take the brunt of the hit. There is no way, in my view, that a pro rata rise will occur in both tracker and SVR. There would be riots on the streets. The % difference will get closer, not stay the same.

D.
 
Dinarius said:
Hi Tony,

Thanks for the reply.

I stand by my point that everything that's happening now is predicated on the SVR market. So, those buying are buying at rock bottom in terms of % rates (whether you agree, or not, that the margin the banks are taking is extortionate) and when rates do rise, it is those on trackers who will take the brunt of the hit. There is no way, in my view, that a pro rata rise will occur in both tracker and SVR. There would be riots on the streets. The % difference will get closer, not stay the same.

D.
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Hi Dinarius I think you're dead right that thery'd be riots if the rises are pro rata. I don't begrudge those on trackers by the way, , good luck to them, it's the banks behaviour at the end of the day and that of the people who have a consumer protection role I'm angry with call it capitalism if you wish.
 
Dinarius said:
There would be riots on the streets
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I very much doubt the riots would happen.


SVR customers are being fleeced at the moment and there is very little noise about it.

I would not be surprised if tracker and svr rates increased by the same amount, lets say by 0.25% every so often.

If the banks feel they could get away with it, you can be certain they will try.
 
todo said:
I very much doubt the riots would happen.


SVR customers are being fleeced at the moment and there is very little noise about it.

I would not be surprised if tracker and svr rates increased by the same amount, lets say by 0.25% every so often.

If the banks feel they could get away with it, you can be certain they will try.] Hi Todo that's exactly what my fear is too and I said as much at the start of my 1st reply to Dinarius. The way things have been so far they will do it and get away with it . I don't condone violence but a hard natured reaction would definitely be called for ànd would be the only response, unfortunately there are way too many submissive people in this country, maybe it's just that people aren't feeling enough pain and can cope with the banks behaviour and they'll just take it. We've gone way too submissive in this country I'd love to hear with the year that's in it what the people who fought in the rising and in the civil war would have to say.
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I doubt riots would happen either - SVR rate holders are being fleeced and no one cares. It's not an issue with politicians who come knocking at the door and to think that the banks would then be happy with the extra from tracker rate mortgages that they'd leave SVR holders alone for the most part makes no sense. They would keep pushing rates up as far as they thought possible 'cus they are greedy. The banks seem to do whatever they like here. According to todays newspaper the central bank will do nothing about it either - not their problem!!! I wish a foreign bank would come and offer rates like in the rest of Europe and let our banks go bust. Or that we had a few decent politicians who would push for fairness.
 
Here you all go....get FF into power and all your worries will be washed away
http://www.independent.ie/irish-new...able-rates-for-mortgage-holders-34426917.html
Fianna Fail has insisted it will introduce measures to "beat" banks into slashing variable rates for mortgage customers in a move that has placed the party on a collision course with the Central Bank.
During a press conference on housing today, Fianna Fáil senator Darragh O'Brien said he disagreed with Governor Philip Lane's claims that banks cannot be compelled into rate reductions, adding: "Phillip Lane isn't the oracle".

The party says its economic plan, due to be published next week, will contain a pledge to introduce "strong deterrents" aimed at stopping banks from charging excessive rates...
...
"I don't agree with the Governor. There is thousands of variable rate customers paying way above the odds," Mr O'Brien said.

"Philip Lane isn't the oracle. I respect his view. But the reality is, we have people paying hundreds of euro per month above the odds, who are middle Ireland and they need to see a result," he added.
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They'll beat the banks into submissions so they will. Rise and follow Michéal
 
Hi Delboy

They don't need to "beat" the banks into submission at all.

They just need to insist that banks treat customers fairly.

1) That they offer existing customers the same rates as new customers - At the moment KBC and BoI offer low rates to new customers while keeping their existing customers on higher rates
2) If the lender is no longer open to business, some form of limit on what they can charge customers. As of now,the vulture funds could hike the rate to 10% and there is nothing anyone could do about it - borrower, government or Central Bank.
 
i met michael mcgrath recently (he lives locally) and asked him about the svr issue and he did seem to be really involved in doing something about it, not just lip service. i'm hoping he calls canvassing some evening as i'd like to see if it something he is hearing on the doorstep. also asked simon coveney (he's local too) but wasn't as convinced by his answer, just general talk as opposed to anything substantial
 
Brendan

As you know, they can 'insist' all they want but the Banks can chose to ignore them.

The talk by FF of 'beating' them into lowering their rates is bluster of the highest order, designed to dupe those who think it has some meaning into voting FF.
 
Delboy said:
As you know, they can 'insist' all they want but the Banks can chose to ignore them.
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I know nothing of the sort.

I would argue that the Central Bank could insist that lenders treat customers fairly under the CPC.
They could change the CPC to make it a specific condition that treating customers fairly means giving existing customers the same rates as new customers. The banks could not ignore that.

And if the Central Bank does not want to do its job, the Oireachtas could bring in legislation to do it.

It may well be political posturing by Fianna Fáil, but if they are in power after the next election, they could actually deliver this.
 
Just cannot see any of that happening. And if it even came close, I could see the new customer rates being increased to match those of the existing customers, rather than the other way around.
Although competition entering the market could actually force the rates lower for all if that condition was in place, unlikely as it is IMO to come about.

As for FF delivering...I'll agree to disagree with you on that!
 
Delboy said:
As you know, they can 'insist' all they want but the Banks can chose to ignore them.
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Delboy said:
Just cannot see any of that happening.
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Well do we agree that the Banks simply can't choose to ignore the laws?

There are two issues here

1) Customers should be treated fairly. If the banks don't do so, the Central Bank should insist on it. If the Central Bank does not insist on it, then the Oireachtas should legislate for it.

I presume that you don't think that I am politically posturing by campaigning for that?

2) Michael McGrath has kept the issue in the news. If he is in the next Government, he might lose interest in the topic. But as of now, he is the most ardent advocate.

Brendan
 
If it were so simple just to legislate why did the current Government not do it. It would have certainly not have been unpopular politically and would have just sailed through on a vote. There may be other reasons apart from getting AIB ready for market. The chances are that the outgoing Government will not be returned so why would they be protecting AIB if they could make themselves more popular by interfering with the market. I just think that there is more to it than that.
I would personally think that it might not go down terribly well with incoming banks either.
Where might it stop if mortgage holders can get the law changed. SME's might also want it/ Farmers might want it and other interest groups would join the lobby brigade and find an very good advocate on the opposition benches who would be able to keep themselves in the limelight as well.
The reduction in income from mortgages will be offset into some other area of banking to make up the losses.
I notice that the market does not see the shares of our 2 main Banks as a great buy given their price over the past couple of years. They do not reflect any improvement in the economy. I do not hold any but just making the comment
 
In my research into rates accross Europe there is a strongly held belief with some lenders that a family home and ownership of one is a desire that benefits the entire and broader economy. And is encouraged. In addition and almost as critical is the unwritten rule that this paticular loan (home loans) is not one that's available for profit driving or 'fleecing'. Banks know and view the broader aspect of their business benefits in the longer run by offering proper rates of interest in home loans. This view creates a hidden certainty that they are safe with their lender something that's certainly not available Padraic
 
I received a reply from Minister Noonan today to an email I sent him last Dec re ptsb rates. I am a customer and I am on 4.5%*rate. His reply stated that basically he had no power to intervene and it was important that the bank remains in profit. His email was much longer but was just full of the usual spin and for the most part said that he was powerless and could do nothing. Both he and I know that this is not true and I intend replying to him and point that out.
 
Hi Ger, sounds like the spin I got when he sent me a reply before Christmas. He mentioned the profitability of the banks in his reply to you that's the one difference between the two replies. Just shows what the people who can do something about this and won't really think, eg to he'll with you and me and all the others getting screwed, just use them for getting the banks back in profit and it saves the state doing it. Just get these off our books for the best possible price ASAP and damp the ordinary people. It's a horrible feeling being a sucker isn't it and for us its twice.
 
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