When do the banks jack up the rates?

M

murphaph

Registered User
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Is the rate rise with immediate effect guys? (I'm presuming so, but only having a mortgage for 5 years or so, I've never received a letter advising of a rise in rates!)
 
Re: When do the banks jack uo the rates?

It'll vary bank by bank. Assuming the bank is just passing the increase straight on the latest you'll kicking in is probably as of 1st Jan '05. Alot of the institutions will be waiting to see who moves first and then the rest will follow. Watch out for increases being announced the same day as the Budget!!
 
Re: When do the banks jack uo the rates?

If you are on a tracker rate, most rate rises are immediate or within a few days
If you are on a variable rate, most financial organisations will be increasing rates within the next few days. They may or may not pass on the full .25% increase.
 
Re: When do the banks jack uo the rates?

asdfg said:
If you are on a tracker rate, most rate rises are immediate or within a few days
If you are on a variable rate, most financial organisations will be increasing rates within the next few days. They may or may not pass on the full .25% increase.
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Do the banks inform you of the rise and how much it will add to your mortgage repayments? I don't have a DD on mine so need to know the exact amount to transfer.
 
Re: When do the banks jack uo the rates?

The banks will generally write to borrowers apprising them in advance of any change in the rate. Not sure about trackers on which changes in the base rate may take effect within a few days. It may also be covered in the terms & conditions of the loan.
 
Re: When do the banks jack uo the rates?

I wonder if deposit rates will rise as quickly...? (from the likes of [broken link removed]/RaboDirect)
 
Re: When do the banks jack uo the rates?

And if/when rates eventually fall again keep an eye out for how (e.g. in part or full) and when (e.g. what sort of delay) the cuts are applied to non tracker variable rate mortgages.

To be fair to NR/Rabo they have been offering ECB+1.05%/ECB+1.00% gross CAR up to the recent ECB rate increase which is far better than what some other banks have been offering!
 
Re: When do the banks jack uo the rates?

The banks normally write out and inform you of the new repayments and when the increase will apply from. Depending on T&C some lenders have to give a months notice.
 
Re: When do the banks jack uo the rates?

ClubMan said:
To be fair to NR/Rabo they have been offering ECB+1.05%/ECB+1.00% gross CAR up to the recent ECB rate increase which is far better than what some other banks have been offering!
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Oh, absolutely! I won't even be bothering to check the effect of the ECB rise on BoI's 0.25% standard deposit rate...
 
Re: When do the banks jack uo the rates?

I heard this morning that NR will be increasing their rates by most of the .25% ECB increase from January.
 
Re: When do the banks jack uo the rates?

According to their [broken link removed]:
Annual interest rate guaranteed to be no lower than the European Central Bank Base Rate until 1st January 2007.
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Re: When do the banks jack uo the rates?

But it's already above the base rate?
 
Zigackly. That's just the only existing guarantee. CCOVICH, where did you hear that this morning, if you don't mind me asking? It's not that I personally have that much on deposit with NR (chance would be a fine thing!), but I've a pal overseas trying to build up a nest egg back home — with a view to one day being able to move back here and afford a deposit on a house — and I kinda 'sold' him on the NR deposit a/c over RaboDirect, on the grounds that at the time he could get locked into their 3.45 rate,for the first 6 months at least.

That said, I'm sure that where NR go, over the next few months, RaboDirect will surely follow (and/or vice versa)...
 
Re: When do the banks jack uo the rates?

I did better than 'hear it', I now remember that I read it:

"One financial institution, Northern Rock, announced it would pass on most of the rate increase to its deposit members from January"

Taken from the article on the front page of today's Irish Times "Further rate rises not certain, says head of ECB"

When did your pal get 3.45% Dr. M?
 
asdfg said:
If you are on a tracker rate, most rate rises are immediate or within a few days
If you are on a variable rate, most financial organisations will be increasing rates within the next few days. They may or may not pass on the full .25% increase.
Click to expand...
Of course they will. I would be VERY surprised if the domestic Irish banks absorb any of this rate increase. They have however been bad at passing on the full rate decreases over the last few years, in order to protect their margins. I think this whole "tracker rates will go up immediately but Irish banks have not decided what to do yet" b.s. is designed to depopularise trackers in favour of variable interest loans which are better money-spinners for the banks.
 
Re: When do the banks jack uo the rates?

CCOVICH said:
When did your pal get 3.45% Dr. M?
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Off the top of my head, CCOVICH, I think I recall that at the time he signed up, they were offering a 0.5% bonus if your opening balance was over a certain 'feck-off' sum — like €50K or €100K...(?)

Then RaboDirect offered a 3.0% rate, which NR promptly 'topped' with their 3.05% offer, but also promised to continue to honour that 0.5% bonus (withdrawn, once the 0.1% hike kicked in).

'Whatever', as they say... I'm sure that by now he's back on the base 3.05% rate like anyone else. But he (and I) will be interested to see whether/to what extent that NR base rate will now approach 3.3% (?)

As regards the generally-available variable rates, I suspect MonsieurBond is 'right in one'...
 
Interesting (unattributed) review in the Turbine today of how the land lies, a month after the ECB rate increase.
Largely confirms MonsieurBond's predictions, too...
 
The Tribune article is a little misleading as it concentrates on standard variable mortgage rates - thus listing EBS as the second most competitve lender - and there are much more competitive tracker rates available which will obviously have tracked the ECB rate hike more or less immediately in most cases.
 
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