Why should lenders be obliged to offer existing customers the deals available to new customers?

Personally?..16 times.

Only messing, zero times. But that doesnt change my post. I happen to know its straightforward and not actually that time consuming, as posters here have attested to recently.
 
You have taken two reports of people who have a very easy switching process. Let me add a new more from that sub-forum for a more balanced view

Posted unable to switch due to age, as the bank they are moving to has a hard cutoff of 65 for mortgages, despite a state retirement age of 68 at this time.
http://www.askaboutmoney.com/threads/switching-mortgage-restricted-by-age.202197/#post-1502403

Poster unable to switch because husband is on sick benefit and salary dropped off completely. This may fall into a different category, but it does happen
http://www.askaboutmoney.com/threads/i-would-like-to-switch-in-2017-advice-needed-please.201929/

Poster wants to switch but has now found out they are on the tracker review list
http://www.askaboutmoney.com/thread...ow-appears-i-am-in-the-tracker-review.201012/

Poster who states their experience of switching was between 4 and 6 months and absolute torture, for the bank to raise the rates immediately afterwards
http://www.askaboutmoney.com/threads/switching-case-study.201625/


And of course my own experience, which took 5 months as a self employed person despite having all documentation ready. Every request from KBC was turned around on my side within 48 hours, and closer to 2 weeks on their side (if I was lucky). I had to go back to old accountants to get letters from them stating I did not have any exposure on companies I had been a director of that voluntarily liquidated 6 years previously, for example.
And this is before we had to sort out new life assurance as they would not accept the existing cover we had, despite it was for greater than the amount of the mortgage and the term longer.
This is not to say I regret switching - I don't but it is not as trivial a matter as some on here claim it to be.

As you know I am all for people switching - as many of my other posts show. But to be honest the whole "switching will solve the world" mantra does get a bit tiring. Not everyone can switch, and its not easy for everyone to switch. Yes some people are lucky and it can go very smoothly, but that is not universal. I would go so far as to say it is the exception rather than the rule.

I would love if everyone evaluated their mortgage & pension every 5 years and moved away from noncompetitive offers. I would love to see each and every employee in the country do the same and review their career every 5 years. I would love to see everyone change all service providers ever 12 months and switch without fail. But people don't - whether it is not having the time or the energy or the confidence to do it.



Sarenco said:
I am looking forward to seeing what the Central Bank report in this regard.
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I too am very interested to see what they come out with, and more importantly if they do a reasonably detailed analysis into why people do not switch, rather than anecdotally state it is the answer to all the problems of the world and 80% could save by switching.
 
jim said:
Only messing, zero times. But that doesnt change my post. I happen to know its straightforward and not actually that time consuming, as posters here have attested to recently.
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Thanks for the honesty Jim - and yes SOME posters on here have attested to this recently. But others have also said the opposite, and my own personal experiences have not been great. I think for every positive experience you will also get a negative one.

As I said above, I would love everyone to switch, but they don't. I am hoping the central banks analysis will provide some evidence as to why people don't switch so we can at least determine for once and for all if it is (a) apathy or (b) not eligible & why
 
What is the point of referencing posters that are not in a position to switch?

Again, and apologies for constantly repeating this point, I am of the view that borrowers that are not in a position to switch deserve a degree of statutory protection and I have stated my suggestions in this regard. That is not what we are talking about.

If a borrower cannot switch, for whatever reason, then they are clearly not in the same position as a new customer (whether that is because of their age, salary, dependants, employment status, etc.) that is in a position to avail of a particular deal. If they are not in the same position as another customer from an underwriting perspective then why should they be entitled to be treated the same as that customer? Logically that clearly makes no sense.

I don't understand why the Central Bank doesn't insist that a lender take back a borrower that switched if it is subsequently determined that they were entitled to revert to a tracker. That seems like the most basic form of restitution to me and is certainly not a reason to restrict lenders from offering incentives to attract new customers.

Didn't you previously tell us that you transferred your house into joint names as part of the switching process? In other words, it wasn't a straight switch and I'm sure that complicated and delayed matters. It would certainly have complicated the life assurance issue.

Again, any policy initiatives that streamline the switching process should be welcomed. I am strongly of the view that there is room for improvement in this regard.

However, any policy initiatives that restrict lenders from attracting new customers, which appears to be what you are advocating, in my opinion, should be resisted because they would discourage badly needed new entrants to our mortgage market.

To be frank, I don't think there is a snowball's chance in hell that the Central Bank will try and micro-manage the mortgage to the extent suggested so this is probably all totally academic.
 
You have a fantastic memory !!! Yes this did happen, but it was at KBC's insistence as they would not give a mortgage on a family home that was not in joint names. I don't believe this slowed things down, as it was done after the fact by the solicitor (as BOI would not allow it to be done beforehand). KBC accepted this one quickly enough. The delays were mostly with the KBC underwriting process.

It did not complicate the life assurance as the mortgage protection insurance was already under both names. For some strange reason, which I have yet to understand, KBC or Zurich would not allow me change the mortgage protection insurance to register the new bank. I blame the fact the original broker sold their business to another firm and Zurich refused to deal with me directly. There was no extra commission in it for the new broker, and therefore I think they made it overly complicated - but this is just a hunch.

Sarenco said:
However, any policy initiatives that restrict lenders from attracting new customers, which appears to be what you are advocating, in my opinion, should be resisted because they would discourage badly needed new entrants to our mortgage market.
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I struggle with your strong conviction on this one, in a similar way to you probably struggle with mine. I do believe if any company offers a product on the open market, then existing customers should be able to avail of it. So if a bank has a gold credit card @10% APR and a standard credit card at 12% APR, and they bring out a Blue Credit Card @8% APR, then I should be able to apply for it if I wish. Why would I not be allowed to do so? Restricting me from going this is going against the free market concept we all discuss.

Now if the same bank brings out an introductory rate of 0% APR for 6 months, and then defaulting back to standard APR rates, I have no objection to this either. It is a set introductory incentive for new customers. But after that period, we are all equal again.

The issue I have is with banks that 'segment' customers into artificial blocks based on unknown criteria and then treat them differently for the lifetime of their mortgage. So take KBC as an example - Mr A signed up with a LTV of 45% in 2011 - they have a rate of 4.25%; Mr B signed up with the same LTV in 2014 and they are on 3.65%; Mrs C signed up in 2015 and they are on 3.4% and Mrs D signed up in 2016 and they are on 3.1%.
12/24/36/60 months later they are all being treated differently. These are not introductory discounts to attract new customers, but lifetime pricing policies designed to directly target those who cannot or do not switch.
And I will add, that KBC is not the only offender here - PTSB for example will not allow existing customers move to fixed rate products, yet keep their variable ones artificially high.

I think forcing the existing players to offer the same rates to existing and new customers would actually promote competition. A new competitor does not have the existing loan book with the higher rates to subsidise the new promotional rates, and therefore will probably have to operate under tighter margins.

Despite all the talk of new entrants in the Irish market over the last 18 months, no material alternative has yet to appear. Maybe we are all waiting on something that simply will not appear any time soon

Sarenco said:
To be frank, I don't think there is a snowball's chance in hell that the Central Bank will try and micro-manage the mortgage to the extent suggested so this is probably all totally academic.
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Maybe. But does not make the discussion wrong !
It will be interesting to see what happens if FF is back in government the next time around. Will they be as focused on the area then?
 
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