Are we looking at a Mortgage Rates Price War?


#41

check the breakage fee on your current fixed might not be that large

cheers cyrusir its a brand new PTSB with a cashback offer included so im locked in for 12 months.

I got this through a broker and he felt that all the cashback offers would stop soon as they don’t tie to you the bank for more than 12 months and you can just switch off afterwards so the banks are not keeping as much of the this business as much as they would like.


#42

cheers cyrusir its a brand new PTSB with a cashback offer included so im locked in for 12 months.

I got this through a broker and he felt that all the cashback offers would stop soon as they don’t tie to you the bank for more than 12 months and you can just switch off afterwards so the banks are not keeping as much of the this business as much as they would like.

how are you tied for 12 months ? in actual terms or you just feel you wont be able to change practically?


#43

I’ve had a 3.25% Ulster bank variable for the last 4 years so their new rates don’t seem anything but marginally better than before.


#44

What’s truly scary is that you bought your house 4 years ago !


#45

Just notice the posts on the clawback and I can confirm I got one and I switched. I got a mortgage with PTSB in July 2016, 2% cash back tied in for 5 years. I saw the thing in the paper about BOI clawback deals not being enforceable so I decided to try it - I’m a Solicitor so it was easy enough for me to do it from my office! Anyway, I got mortgage approval with UB, paid off a bit to get to 80%, and remortgaged by April 2017 (within the year). During the process PTSB sent a letter saying my conditions of my mortgage were changed, and basically the bit that says they’ll claw back the money if you move in 5 years has been removed. We knocked 5 years AND €200 a month off the mortgage and all I paid were the land registry fees.


#46

fair play Sala thats quite interesting, the broker indicated that I could not break within the 12 months. Might have to circle back and look at the mortgage contract again, cheers.


#47

i dont see how that could be enforceable in any way

in practice switching with less than 6 months payments under your belt is tricky but i moved from EBS to BOI after 7 months recently to hoover up some 2% cash and ill switch again to get the best fixed rate


#48

I don’t think the 12 month / 5 year periods are enforceable at all. I just plowed ahead like a normal remortgage and it was fine.

I calculated we saved circa €175,000 over the course of the mortgage in interest payments so it’s certainly worth it not to just sit back and keep paying (although that seems like the hassle free option!)


#49

We overpay fairly regularly and will continue to do so we never explored fixed term mortgages. However I heard from a friend they fixed 80% of the mortgage and went variable on the other 20%, that means they can overpay on that. Do all banks offer that?


#50

yes

but not at the same rates

to be fair the penalties for overpaying at the moment on a fixed are negligible


#51

They don’t advertise it, but it definitely seems to be common enough; people on AAM talk about it a fair bit. I’m in a similar position, and keep meaning to talk to the bank about it, but the thought of talking to the bank always makes me put doing that off :smiley:


#52

I switched from BOI to KBC at the start of the year and took the 2% cashback offer. Is it possible to switch back to BOI and take the 3% or are you excluded because your mortgage was previously with them?


#53

Does anyone here have a good understanding of bank wholesale rates?

KBC offer a 10 year fixed mortgage at (what appears to be) a competitive rate (2.95% for LTV below 50%).

The penalty for breaking the fixed term early involves subtracting the wholesale rate at the time of the break (for the remaining term) from the wholesale rate at the start of the fixed term and multiplying it by time remaining and principal - so as long as the wholesale rate is higher at time of break, no penalty applies.

My thinking is that the 10 year fixed mortgage looks like a good bet in that the penalty will likely be zero for breaking early but I don’t know enough about wholesale rates to be sure about this.

KBC’s definition of ‘Wholesale rate’: the rate per cent per annum which the Lender determines to be the market rate applying to an appropriate interest rate swap for the relevant time period.


#54

Don’t know much about it but that does look like a good rate for such a long term.

My KBC mortgage is resetting to the 3.1 % variable. Considering fixing at their 1 year fixed at 2.9 % again.

Busy time of year to be sitting down to look at his stuff again.


#55

for comparison

ing.nl/particulier/hypothek … index.html

I don’t think these rates are going to shoot up anytime soon; the spread between Irish and Eurozone rates should continue to narrow?


#56

Irish rates will approach Dutch rates when Irish people start paying their mortgages as diligently as the Dutch do.

Which will be never.

Last week Central Bank research showed that ****half ****of all mortgage holders in arrears of a year or more had not engaged ever with their lender.

In the Netherlands these houses would have been re-possessed within a year. Non-performing mortgages never went above 1.5% even in the worse of the post-crisis period.


#57

Which used be always - during the previous property crash in the 1980s, NPLs were a minor problem, mainly farmers who expanded too fast, and very few PPR mortgages ended in court.

The failure to enforce loan contracts in the past decade will impose long-term costs on future generations (when will banks again be allowed to enforce collateral efficiently? When will they be allowed to enforce the “fine print” e.g. take away trackers? )

Of course the media won’t link this problem with the current supply shortage. No wonder there’s no new property bubble: It would be imprudent to lend to speculative builders in Ireland.


#58

It’s hard to know.

Irish banks from about 2003 to 2008 went for sub-prime customers (without them having to pay sub-prime rates).

Basically people with poor credit histories and poor labour market prospects got mortgages. These were the traditional group who got social housing.

Obviously lending standards are much tighter now and there is a cohort of the population who could get a mortgage in 2007 who will not get a mortgage now.

This should mean that eventually rates will come down.

But this has other costs. There is a big group of people who can’t get a mortgage but can’t get social housing either.


#59

+1

Another consequence you won’t read about in the media, despite endless commentaries on homelessness.


#60

What are the chances the penny would drop for our media and politicians.

Deaf, dumb and blind when they want to be