RTÉ: Banks; mortgage rates up, deposit rates down

From RTÉ, 9th May 2014

[

](Irish banks raised mortgage rates in March)

Two way to look at it … a) the banks are increasing their margins by reduced the rate at which they borrow from depositors while charging borrowers more or b) the banks are screwing their retail customers two ways.

Blue Horseshoe

c) The banks are screwed in terms of cash flow, and thus getting income is more important than capital for stress tests.

:laughing:

Where are they getting that number from? The lowest I see is 3.85%, and that’s a <60% LTV from KBC.

It’s probably polluted by new ‘sustainable’ deals being struck. To get you off a tracker for instance, or refinance, rather than new, new business, as in straight in the door for the first time.

It’s the average.
Given that they can only increase variable and not tracker rates, it underestimates how much the former are screwed.

I don’t get why they have barely increased variable rates. Political pressure?

It’s an average of new rates, hence, trackers are irrelevant.

The CBI survey is misleading at best.

Presumably the likes of UB’s Home Mover deals (3.5% APR “fixed variable” ECB+2% for 5 years) would be counted as “new loan agreements”.

Original source:

centralbank.ie/press-area/pr … h2014.aspx

The cost of funding is down over the last year. Refi rate dropped several times, refi rate going to drop again in June, Euribor down, Euronia down, deposit rates down, ECB LTRO / ECB overnights liquidity cost down in real terms and volume terms.

Plus they all behave like sheep. Only PTSB have increased variable rates very recently. A copy cat drop might happen but it would be unpalatable for it to happen anytime around the next ECB meeting.