for all of you with mortgages (all the McSavvy ‘i’m renting’ folks need not read this!)
margins on lending are shooting up for irish banks, the Euribor may be the cost of funds but it appears that lenders here are having to pay even more than that to get the funds. I heard (at board level from a major lender) that their blended rates are at 5% right now.
Expect - actually i’ll basically guarantee ya - rates to rise for every lender. we have seen it with many banks already but it seems this will be the week that it goes across the board.
If you are processing a loan make sure you get a loan offer asap so that you can lock into your rate, and for those of you on variables it may be worth calling your bank and trying to tie into a tracker.
This is very significant. People trading on needing to remortgage as well as FTBers will get caught. 30-40 bps would put around 1% on the much vaunted affordability index flouted be comical and his ilk.
trackers are shooting up fast as well. they are based on the ECB (normally) and that means 4% with (as a rule) up to 1% margin, but the Euribor is 4.7%+ so there is no margin, they are going to be removed from the market altogether in the short term or made very expensive, the solution is to base them on euribor but that would be unpopular. anyways, rates are on the up even though the ECB hasn’t moved them.
BOS announcement arrived in my inbox today, +55 basis points on investor loans, and commissions slashed for brokers. all rates including trackers have gone up. I wouldn’t mind some good news for a change!
3-5yr fixed rates have seen a 10bip raise in the last week, even long money is getting the shaft now.
re: BOS, there is no time, we got hit on any case that isn’t closed! that means people with loan offers might not even get what they thought they would. its a mess.
With all that’s going on, interest rates going up etc, do you think that any of the lenders are having cash-flow issues? Do you think there’s a knock-on effect for further (non-ECB) interest-rate rises on foreclosures. Do you think any lenders are at risk of going to the wall?
The reason I ask is that I recently spread a deposit across a few of the lenders (won’t name any). I Inherited a bit of derelict property (with my brothers) a while back and we agreed a sale nov 2006 at asking + 33%.
I was all set to ‘get on the ladder’ back then, but luckily for me a combination of two incompetent small-town solicitors and a buyer delaying the conveyancing (see you in court for my late-fees on CGT), I didn’t see a penny until Jan this year when the writing was very much on the wall.
So after clearing a bit of travelling debt and a car loan I’ve got 40k tucked away and am sitting in a good place (hence the username). But I’d hate for my position to be comprimised by one of the lenders getting into a spot of bother and my deposit balance with them not being available at the notice I expected when I opened the account.
Any thoughts on any risky institutions? I mean, I was all set to put some of the cash into Northern Rock a year ago (more of the jammyness)
we don’t generally wish to finger anybody for fear it comes true
Split the €40k across 2 banks to get the full insurance or use Rabo who have the best deposit insurance at about €35k ( Dutch Central Bank) and the balance in Northern Rock who are a state owned and guaranteed bank nowadays .
If you had €400k it could be messy splitting it across a load of institutions .
Betwen Rabo and NIB you would be completely protected - Rabo 100% of 20k + 90% of next 20k (I think) and NIB owned by Danske bank is 100% of 300,000 DKK. (These figures are from memory, so you need to check them before you leap!).
My elderly parents have their life savings in an Irish building society high interest savings account - but when I next talk to them I’m going to tell them to transfer it to Northern Rock asap. Their interest rates are almost as high as any out there, and they are probably the most solid bank in the world at the moment.
There’s a big drive to acquire resources for the Irish banks at the moment. You’ll probably notice all the regular saver and term deposit account ads in the papers at the moment. Inter bank lending has dried up and institutions are driving the effort to bring in deposits to improve their liquidity ratio. That’s being hammered into even the lowest front line staff in the big institutions.
Anecdotally my variable rate car loan has gone up. I’ll assume they’ll try increase rates on these type of loans and credit cards as they can. The vast majority of mortgages taken out over the last 7 to 10 years are trackers in my opinion. Anyone who I know in this period that bought a property is on a tracker.