EBS to pile pain on mortgage holders with rate rise

[What_Goes_Up]

independent.ie/national-news … 78711.html

EBS to pile pain on mortgage holders with rate rise
Saturday June 18 2011
By Charlie Weston Personal Finance Editor

THOUSANDS of homeowners are to be hit with another interest rate hike after EBS pushed up its standard variable rate by 0.25pc.

The move will add €45 to the monthly costs of repaying a €300,000 mortgage.

Most of EBS’s mortgage customers have standard variables, unlike other lenders with large numbers of trackers.

The new rate would jump to 4.68pc and would take effect from August 1, EBS said.

This is the second time this year that EBS has hiked its variable rate. Its variable rate rose by 0.6pc from April 1.

EBS is due to be merged with AIB on July 1, but will be run separately.

It also emerged yesterday that Permanent TSB has followed its hike of 1pc in its variable rate at the start of the year with another increase in the past few weeks.

Permanent TSB’s variable rate has gone up by 0.25pc following the move by the European Central Bank to push up its main rate by the same percentage in April.

Permanent TSB’s standard variable rate for existing customers has shot up from 4.19pc at the start of the year to 5.44pc now. This is the highest variable rate in the market.

This means that repayments on a €300,000 mortgage have jumped by more than €200 a month since the start of the year.

Both Permanent TSB and EBS no longer allow their existing mortgage holders the option of fixing their rate.

Ulster Bank has also announced a second standard variable rate rise this year. It will take effect from July 1 and will see repayments for a family with a €300,000 mortgage increase by €100 a month.

…(cont’d)

[Calina]

I don’t know what they are going to do if interest rates ever got back to 7% god forbid.

[Ireland_is_different]

It also emerged yesterday that Permanent TSB has followed its hike of 1pc in its variable rate at the start of the year with another increase in the past few weeks.

[Landlord]

Maybe there is hope yet that the banks are going to make a profit. posting.php?mode=reply&f=4&t=38909#

[Poor_Student]

@Ireland_is_different

It also emerged yesterday

that Permanent TSB has followed its hike of 1pc in its variable rate at the start of the year with another increase in the past few weeks.

I don’t understand this line at all. Bad journalism? Did PTSB do it on the sly? What does it mean?

[yoganmahew]

I don’t quite understand the timing of the EBS move. I am presuming that it is looking at 3 month euribor rates to get a reference from? And that those have already factored in an ECB rise next month? In which case, EBS is being ‘kind’* to its customers by giving them notice now.

*hard to find a word here, ‘honest’? ‘straight-up’?

[goldmanberg]

@Poor Student

@Ireland_is_different

It also emerged yesterday

that Permanent TSB has followed its hike of 1pc in its variable rate at the start of the year with another increase in the past few weeks.

I don’t understand this line at all. Bad journalism? Did PTSB do it on the sly? What does it mean?

One possible explanation could be that Charlie noticed yesterday, in his capacity as Personal Finance Editor, a change that occurred in the past few weeks?

[El_Stuntman]

@yoganmahew

I don’t quite understand the timing of the EBS move. I am presuming that it is looking at 3 month euribor rates to get a reference from? And that those have already factored in an ECB rise next month? In which case, EBS is being ‘kind’* to its customers by giving them notice now.

*hard to find a word here, ‘honest’? ‘straight-up’?

I don’t understand the spread between AIB variable rates and EBS ones

they are after all the same thing now (in theory)

[thewatcher]

@El Stuntman

@yoganmahew

I don’t quite understand the timing of the EBS move. I am presuming that it is looking at 3 month euribor rates to get a reference from? And that those have already factored in an ECB rise next month? In which case, EBS is being ‘kind’* to its customers by giving them notice now.

*hard to find a word here, ‘honest’? ‘straight-up’?

I don’t understand the spread between AIB variable rates and EBS ones

they are after all the same thing now (in theory)

Indeed, very puzzling it is although any one i have spoken to says the ebs has no money to lend. Aib’s rates seem particularly low though in the current climate, and it’s all well and good saying build in a 2% rate rise, but if that’s the case you’d be far better not buying now as the prices will have to fall to meet the rate rises.

[sorehead]

In which case, EBS is being ‘kind’* to its customers by giving them notice now.

That would be a very kindhearted explanation.

I would guess it’s FUD and they’re trying to use the cover of a possible rate rise announced next month to camouflage their own rise announced this month. If they’re lucky their customers will get the EBS rate rise letters just after there’s been a big hoohaa over the ECB rise.

Then when those customers get a second letter the following month they can be fobbed off with - “that’s the ECB rise - weren’t you paying attention”.

I used be with EBS and I seem to remember they’ve used this technique before.