I met a recent house purchaser. He told me that he asked the mortgage adviser for a ECB + tracker but was given a EURIBOR+ without being told the difference. If there ever was a case of Caveat Emptor, this is it. The culprit is not faceless International Financial Buccaneers but your friendly mortgage adviser, who are now advising their clients to inquire as to what kind of mortgage they have. Regulated my arse!
There seems to be a ‘redefinition’ of tracker going on. In the twenty years that I have owned property, a tracker to me has always tracked central bank rates. Now there seem to be moves afoot to redefine tracker as tracking Libor or Euribor.
Wow , who is selling Euribor trackers in Ireland then …I admit its the future but a Euribor tracker today would cost 6% or so ???
Imagine the commission on that bad boy…
MortgageBroker refers to them here:
thepropertypin.com/viewtopic … highlight=
I haven’t heard that they’ve come in yet, but I haven’t looked. WTTR seems to have found the first one
Add this to the BBA cracking down on misreporting of borrowing costs and you have some serious readjustment of mortgage pricing going on in Ireland. What the ECB does now is irrelevant. The banks are doing their job for them. As you point out in the same thread, euribor trackers are the norm in Spain, so both frothy markets are being hugely hit by the banks.
My friend told the Independent local mortgage advisor that the loan wanted was Tracker LTV<50%. ECB+0.755 for the term. The advisor initially showed numerous repayment products of a particular Bank. Some how after the mortgage adviser submitted the application to the Bank, one of our main ones, the terms changed? My friend questioned this change, but was then subjected to some kind of fudge, three card trick if you like, and as he had not a Master of Banking degree was not in a position to argue. My friend is a very hard working man, signed the loan agreement. I asked him to show me the loan agreement. He subsequently showed me the Offer Letter. It says Variable at 4.75%, and in the smallest of small print, the following words appear
Sounds more like he was screwed by the advisor!
He asked for a tracker and got standard variable with the Base Capped at 0.1% over 1 Month Euribor but tracking nothing .
2Pack, that’s NEVER less than 0.1% above 1 month euribor, not never more - they’ve put a floor on the interest. In essence, they can charge what they like, unless there is a cap somewhere else in the offer letter. WTTR?
Its not a tracker, thats for sure
“Bait and switch” is a standard sales trick used in banks. Walk in and ask for a tracker and theyll say “Sure, here you go” and hand you a variable with a high minium rate.
They do similar things with savings rates. One major bank was advertising a special rate fixed term savings deposit account last year. When I tried to avail of it they almost insisted that I avail their investment funds instead. They made it so difficult to actually get the product they were advertising.
Now there I agree with you totally!
yep, just sheer co-incidence…,
mortgagebrokers.ie/blog/inde … they-care/
You caused me to go back and read the full document. It is all so confusing. The section headed The Statutory Loan Details state “**Variable at 4%”. **
Part 5 The General conditions state
Part 4- The Special Conditions state
How do lenders managed to repossess houses in Ireland with such rubbishy lending agreements? A good lawyer could drive a coach and four through these antics. This must be so like the rubbish that is tied up in untouchable funds that are hidden in banks balance sheets that even auditors can’t detect or make sense off. Will any of these Bankers be kicked out of their homes?
Is it any wonder the mortgage advisers’ body is directing clients to go back to the Lending companies to find out what rate they are on?
The governments and opposition did their level best to dampen down on private armies etc and facilitated the Good Friday Agreement. Oh! How limited was their vision when they allowed Financial Cowboys run rampant through the land and cause untold havoc!
Bloody hell, you’re right it’s totally contradictory:
0.1% above 1 month is 4.4ish% according to euribor.org/html/download/av … uribor.gif (as 2Pack posted)
0.75% above the repo rate is 4.75%
So what they are saying is that the rate is 4.75% as long as one month euribor doesn’t go mad and go above 4.75%, in which case the payment would be 1 month euribor +0.1%
So maybe it is a tracker, but it certainly has a twist! Not having had a mortgage in this country or read the documents when I had a mortgage in England, is this standard?
Or to put it another way the mortgage rate will be whichever is the higher of ECB+0.75% or EURIBOR+0.1%.
“Irish Bank launches new mortgage product ideally suited to FTB, STB, TraderUpper, TraderDowner, AnyoneWho’llsigner, BTL, RIL …”
The “TwistyTracker” !! Guaranteed @ [Whateverthefuckwechoosetotrackwheneverforever] + 0.75%
Bizarre. How are these charlatans allowed to sell this crap ?
I’ll go one better. I think this sort of financial acumen should be taught as a compulsory leaving-cert level course. Not just the buying of a house but other important financial matters also. It could be taught at honors, ordinary and foundation level so that no matter how basic your grasp of financial matters you wouldn’t be totally at the mercy of the sharp-operators out there in all walks of financial life.
I know this will never happen. But wouldn’t it be lovely? Unless you’re a sharp-operator - obviously they’d be less keen
Every financial forum eventually comes up with the suggestion that people should be taught financial literacy in school. I saw it on AAM, on Monetalk, on The Motley Fool and here.
It happens in a limited way, e.g. we all learned about simple and compound interest in school. I’ve heard of attemps to introduce it to the schools and to cover more realistic aspects of finance like low monthly repayments with a baloon payment, or 0% schemes where the interest mounts up behind the scenes waiting for a slip up, store credit cards etc.
I don’t know if there’s much appetite for a very financially literate public. Where are the crazy consumers going to come from, the ones that create huge profits for the shops who sell goods and the banks to loan money to buy goods with.
And would a financial literacy course even work? I’ve explained very simple maths behind mortages and loans to grown adults who understand the maths but still can’t get over certain psychological comfort blankets like keeping savings while carrying high interest debt, or buying a house with very little deposit instead of renting and building up their savings for a year or two.
And what if this course actually happens. Then what?
You and I will have to pay for it through our taxes, and to what end?
You’ve already left school, you can probably take care of teaching your kids the value of money. So no direct benefit to you unless it benefits society in general, which is questionable.
Kids who’s parents know the value of money will probably not need lessons in school. Kids who’s parents don’t know the value of money will probably learn nothing anyway because the parents will override what they learn with more practical examples.
If the one eyed man is king in the land of the blind, do you think the one eye’s man would have any interest in introducing everyone else to the wonders of laser eye surgery?
I would have thought this was a business opportunity to offer this course
on a fee basis. Then the cynic in me sees the banks organising their own
course with much more advetising and killing it off. Also the only people
with the foresight to take such a course would have done some reading
and the sheep continue as normal not ‘wasting money’ on such a course.
By the way, is the alternative to homefacts.ie going to appear?
Have EBS made any public pronouncements on raising their variable rates for existing customers? Because I arrived home to a letter yesterday stating that my new rate has increased by 0.08% and now runs at 1.08% over ECB base rate.
Call me a fool for not having fixed some time ago, but swings and roundabouts have prevailed. And I would be willing to bet the next ECB move will be a downward one, though it may be some time off. But that’s another argument.
If one bank in the current climate holds its nerve (and, more importantly, its variable rate @ 1%-over-ECB), would it then be able to ride out this storm under the weight of incoming money. If one of the new entrants - Halifax, for example - did this, could it not expect some serious switchers? I think the Irish nation is moving back to the piggy bank, homemade sandwiches and shopping for value not vanity, so if they can save 50 yoyos a month on their mortgage, I’m guessing Halifax would be quids in.