In relation to banks and their tracker loan books it would be my opinion that some of the banks might be making a very marginal profit on the performing portion of their tracker loan book before administrative costs. On the other side of the argument I personally know of millions of euro of non performing tracker mortgages I would be surprised if any of them are making a profit on the total tracker loan book when you take this into account.
Video of great speech at the ptsb AGM
- Thread starter Brendan Burgess
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Wow.
KBC's <60% LTV mortgage rate is 3.75% (with the 0.2% discount if you open a current account with KBC). KBC will also throw in €1,000 towards your legal costs and will cover 50% of your home insurance for a year.
That's an even better deal than Sara's (allegorical) neighbour is getting!
Sara should be encouraging people to switch at every available opportunity. That's the best way to get PTSB's attention.
To be fair Dermot banks don't make a profit on any non-performing loans, trackers or otherwise. The servicing costs relating to a performing back book of loans would be quite modest.
Yes that would seem like a good deal for Sarah should she wish to explore it. But thank you Sarah for nevertheless highlighting the issue for those of us not in a position to switch because of negative equity or high ltv ratio.
Sara from all accounts appears quite articulate and is available to the media and would have put a good bit of effort preparing for all of this. I would not put myself in the same articulate category as Sara but I would have used that time that she did into negotiating a cheaper rate from another institution and telling my friends to do so.
I honestly think that spending whatever hours it takes to change your mortgage to a cheaper bank would be more productive than going to meetings. I just wonder how many of the people who say the will go to a mass meeting re SVR mortgages have pro-actively tried to switch themselves. There are a lot of people out there who want someone else to do it for them. I could not be bothered attitude but are still prepared to complain.
If 30,000 SVR mortgage holders which is 10% or so started to switch in the next month I believe that the banks would pay attention particularly when they would air their success.
Most of the people who will attend a meeting will already know what the problem is and how to go about sorting it. Switching or making their mortgage provider feel that that is what they are going to do. I am not against the mass meeting but just giving a view.
Just watched tonight's Prime Time. Hats off Brendan, you presented your position very calmly and cogently.
I've never heard of Eoin Fahy before but the word "bluster" springs to mind.
Is this the first time anybody has publicly challenged the received wisdom that banks are making huge losses on their tracker books? Does anybody else find it odd that no financial journalist has taken up the running on this issue?
I've never heard of Eoin Fahy before but the word "bluster" springs to mind.
Is this the first time anybody has publicly challenged the received wisdom that banks are making huge losses on their tracker books? Does anybody else find it odd that no financial journalist has taken up the running on this issue?
Not odd at all....they're not smart enough to work out the sums!
Or, they're too liberally minded to point the finger at mortgage arrears/lack of repossessions as being a cause. Thats not the fashionable media angle and they'd probably have Daviid Hall giving out about them on twitter, which nobody wants!
Brendan Burgess
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Tonight on Primetime said:
That's a bit disingenuous then isn't it.
Let's look at this another way.
When some of us got our loans back in the mists of time at over 9% (EBS) we didn't complain and ask for parity with those in Irish life who were paying around 17%.
When a relation got a great tracker and another got a great fixed and that fixer ended up on a not so great SVR, whose fault was that.
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Well Ulster bank SVR holders are paying more, so she has a better deal, doesn't she?
Brendan,
Not sure I agree with the way your view of Trackers came over. Whilst they may be at breakeven in terms of cost of funds (though that is surely questionable!), you assumed that PTSB had no administration costs.
So if we add admin costs plus some modest "profit margin", surely Trackers are still net loss making?
The solution of course is simple. If Trackers people were to pay a "market" rate, then SVR people might expect a lowering rate to "market rate". But some politicians want Banks to reduce SVR rates whilst not increasing Trackers.
Do we really want Banks to trade irresponsibly?
Not sure I agree with the way your view of Trackers came over. Whilst they may be at breakeven in terms of cost of funds (though that is surely questionable!), you assumed that PTSB had no administration costs.
So if we add admin costs plus some modest "profit margin", surely Trackers are still net loss making?
The solution of course is simple. If Trackers people were to pay a "market" rate, then SVR people might expect a lowering rate to "market rate". But some politicians want Banks to reduce SVR rates whilst not increasing Trackers.
Do we really want Banks to trade irresponsibly?
The issue of admin costs was discussed by both Brendan and Sarenco on the thread elsewhere about the Cost of Trackers. Admin costs are low and mainly fixed regardless of whether Trackers were to stay or go.
Trackers are on a contract. They cannot be amended on the whim of a media campaign on the backs of people who feel hard done by that they didn't get the same deal (even in some cases where it was available for selection).
If you want a focus for any issues you may have around high SVR's, then go look at those not paying mortgages for several years but remain insitu.
And in my own family I have two doing this and I cannot for the life of figure out why the two banks haven't taken back the properties. And they are not family homes to boot.
Thanks for clarifying Sara's household circumstances Brendan - it's a pity the suggestion on Liveline that she was in a position to switch mortgage providers was not corrected at the time.
However, the fact that Sara's household now has a reduced income does mean that they are not in the same situation as their (allegorical) neighbours. The loan amount, term and LTV may be identical but their LTI would be different and, from a underwriter's perspective, Sara's household would be higher risk borrowers. As such, all else being equal, you would expect Sara's household to pay a premium over their neighbours in terms of their mortgage rate.
Yes your right she wouldn't be getting ripped off as much as the people with ulster bank. The SVR in Ireland should be 3% a cross the board the banks have made enough money on the high SVR, s now they should give people a cut now. Good luck to all the people on trackers I am one of the fools who didn't tick the tracker option its about timing as well.
I think people have lost the run of themselves.
You were not a fool not to have taken out a tracker. It is not true to say that people who took out trackers were any smarter than others.
Yes indeed, Brendan was very good. It is only a shame, they didn't give him a little longer to speak, but I often find fault with Prime Time and how the cut their guests short, if the truth be told.
Out of interest, why did they elect to get someone from Kleinwort Benson Investors, to be Brendan's opposite number, I didn't think they had anything to do with lending, ECB rates etc ?