Banks passing on ECB rate cuts..or not

sweetie

I moved to an aib tracker last year for ltv < 60% which was ecb + .6 or .7, not sure which. Am I entitled to stay on that rate even though the bank has removed it from their range? I haven't received a mortgage statement recently to check my current rate but my latest payment, yesterday was 60 euro less than previous month.

gorm

We are on a variable rate mortage from PTSB. Wife was in the bank today questioning when our rate would reduce, since their website proclaims a .5% decrease in december. After some 'discussion' it emerged that the 0.5% decrease is for the ECB october reduction. Person had no knowledge if or when the November rate cut would be passed on.

dotsman

sweetie wrote: »

I moved to an aib tracker last year for ltv < 60% which was ecb + .6 or .7, not sure which. Am I entitled to stay on that rate even though the bank has removed it from their range? I haven't received a mortgage statement recently to check my current rate but my latest payment, yesterday was 60 euro less than previous month.

Yes, you will remain on that product until you switch to something else. They are just not offering trackers any more (ie to anyone looking for a new mortgage). I'm actually not sure what would happen if you want to change the term, or topup the mortgage. They might insist then that you switch.

P.S> if you get your mortgage added to your Online banking, you will be able to see the rate on that.

rameire

Drumpot wrote: »

Small point, dont know if its true or not so dont attack the messenger.

I heard on radio a guy who has a first active mortgage who said that he phoned them up and they said that he wouldnt get the reduced interest rate unless he wrote in requesting the decrease. Not sure if any other lenders do this, but no harm in phoning up your mortgage provider to confirm that you dont have to do anything to get the reduction!!

with regards to this person he was talking about the offset mortgage, and he was incorrect in his conversation on the radio, the rate was given to mortgage holders for the offset mortgage on the 22nd of oct, what he has to do is contact the first active and advise them to reduce his repayments due to the rate change which is automatically given due to the terms and conditions of the loan.

chuckles30

Just a follow on from a comment I posted here last week. I have a tracker mortgage with ulster bank and I phoned to complain about them not passing on the interest rate cut and I was told it was to be effective Nov 1st and I'd see it in my Dec payment etc. Anyway yesterday, I got a letter in response to my complaint, basically repeating the same, so I still wasn't satisfied. There was a phone number in the letter, so I phoned them today. I got through and the lady basically told me there was a problem with the letter and I'd get another call later today or Monday. Then this evening I got the call.......there was a mistake in the letter and the interest rate change announced in Oct was meant to be effective Oct 25th and the one announced last week is due to be effective Nov 25th....not Dec 1st as I was told during the week. So my Dec payment is going to reflect the new rate and also the adjustment for the overpayment for Nov. Aparently the letter saying that the effective rate is Nov 1st is on it's way, but there's another letter due to come saying that it was effective Oct 25th. So anyone else on an UB tracker should check that they're getting this also.

dotsman

Media are reporting that AIB is passing on the last cut from COB tomorrow (both Tracker and Variable). Details here.

This is 5 working days after the ECB cut their rates (which, from what I remember, is the same time frame for when the ECB upped their rates).

Not sure if the other banks have announced when they are applying their changes yet (a quick glance on their websites said nothing and the news only reported AIB).

Perhaps if someone has the time, energy and motivation (definitely rules me out ), it would be interesting to put together a league table of all the banks as to (a) how quickly they pass on the cuts and (b) do they pass it on in full to their variable customers as well. Given that there are more ECB cuts on the horizon, it would be pretty good information over the long term for people to decide what bank they'd like to deal with in future

Bass Cadet

Have a tracker with BOS/Halifax. They sent out a letter saying my next repayment (for November) would be taking the october ECB cut into effect, with a quoted amount, etc. Money has been taken out of account today but its the same...no change! :mad: Before I call the w*nkers...could there be any possible reason for this (besides them f*cking up or trying to rip me off)

TheDriver

AIB passed on my rate change as promised, great to see it on online banking

Lea2000

Hi guys,
I'm a little confused about all these interest rate cuts of late and am wondering if i am going to see the benefit of them myself? Can anyone explain things to me a bit more clearly?

I currently have a fixed rate which is up next year and presumed that once this was up i would be able to buy into another fixed rate which would now be lower, therefore bringing my monthly mortgage payments down. However, having done a few quick searches, it seems that fixed rates are even higher now than they were last year when i fixed. Is this because the rate cuts are not being passed on to customers? If i change to a variable rate will i be able to avail of the cuts and how much lower are we talking? Is there any chance that the banks will lower the rate of fixed-rate mortgages? Looking at the quotes they are giving there's no way i could cover the cost of the fixed rate i'm looking at now!!!!

HALLOW RUBY

Yeah I'm interested in finding out about this type of thing also.:)

eden_my_ass

The fixed rates currently on over are higher than what you're currently on simply because since you fixed, rates have risen. Now central bank rates are dropping and in general you can assume that fixed and variable rates should drop in tandem. However thats not to say they must, the banks aren't obliged to drop rates like this, although so far under pressure they generally have been doing so. The only exception is a tracker mortgage where they are commited to a fixed percentage (say 1%) above the central bank rates. Therefore you must get rate changes as central bank rates change.

For you on a fixed rate, and with trackers dissappearing, the chances are you will have two options only next year, fixed or variable, no tracker. Rates are dropping, and expect another drop today, so to answer your question, yes it seems fixed rates will lower further as will variable, but its not written in stone and impossible to say what will be the case next year, although i can't see them rising back up that soon. You'll just have to wait and see!

Lea2000

Does this mean that, if things continue to go as they are, i should be able to find a fixed rate which is cheaper than the one i bought last year? I think variable will probably be the way to go for a time anyway but prefer the idea of knowing my out-goings each month. Also, does anyone know if we are going to get higher mortgage relief next year and back-dated from 2005? I bought my house just over three years ago. How does this work? And why is everything so hard to understand????

eden_my_ass

Lea2000 wrote: »

Does this mean that, if things continue to go as they are, i should be able to find a fixed rate which is cheaper than the one i bought last year? I think variable will probably be the way to go for a time anyway but prefer the idea of knowing my out-goings each month. Also, does anyone know if we are going to get higher mortgage relief next year and back-dated from 2005? I bought my house just over three years ago. How does this work? And why is everything so hard to understand????

Noone can say whether YOU will get a lower fixed rate, cause a) we don't know your current rate and b) we can't predict what the rates will be like next March, April, May etc...

What I would say is that, if the best fixed rate offered to you right now is only slightly higher than what you are on, say .5% more, then I would be confident you'll get the same rate or lower than your current by next year.

As for mortgage relief, those changes for 2009 are detailed in the budget, its gone up for some, down for others, you need to read the breakdown to see how it affects you, I bought 2006 and my credit is going from 20% to 22.5%...

Oh and its hard to understand because our education system has never and probably will never teach day to day economics to a proper level to all....after all its not like we will have to deal with money issues all our lives is it :P So you must educate yourself sadly!

Lea2000

Thanks Eden!

My current rate is 5.5% but what i'm seeing at the moment are fixed rates of 6.5 or higher depending on how long you fix for! Repayments are typically about €200/300 a month more! Our mortgage already went up by about €300 at the last rate change so we are terrified of it going up again!

eden_my_ass

Lea2000 wrote: »

Thanks Eden!

My current rate is 5.5% but what i'm seeing at the moment are fixed rates of 6.5 or higher depending on how long you fix for! Repayments are typically about €200/300 a month more! Our mortgage already went up by about €300 at the last rate change so we are terrified of it going up again!

What lender are you with? would you be open to moving?

If this page is up to date there seems to be much better than 6.5 available from most currently, when did you get that offer, things have changed a lot in the last 2 months!

http://www.mortgages.ie/index.cfm/spKey/home.mortgage_rates.html

For instance, I was fixed on 4.5 for the last two years, term ended october, I was offered fixed of 5.7 (which was gonna hurt!) or a tracker of 1.25% above ecb (4.25 at the time). The tracker was then pulled from the market but my offer still stood. I took the tracker, so went from 4.5 to 5.5, first cut two months ago brough me back to 5.0, then another brought me right back to 4.5, my rate of the last two years. Thats how quickly things change and with the ECB meeting today and almost certainly dropping their rates again, I will be paying less than I was last year. No wonder its confusing huh!? Point is 6.5% sounds high, check again

eden_my_ass

Bank of England just cut rates http://newsvote.bbc.co.uk/1/hi/business/7764741.stm

Wait til lunch and see what the ECB do...

Lea2000

Thanks again eden-i see that rate cut.

I'm with ptsb and just did one of those quick quotes on their website yesterday although i think the rates had actually not been up-dated since August. Would be up for moving if it means our already high mortgage will come down, although of course would have to be careful as to whom!!!!!

Guess will just have to wait and see. Our rate isn't up until September but had just been presuming we were set for a lower payment with all that's going on and when i looked yesterday i got worried that it's actually going to be higher.

eden_my_ass

Lea2000 wrote: »

Thanks again eden-i see that rate cut.

I'm with ptsb and just did one of those quick quotes on their website yesterday although i think the rates had actually not been up-dated since August. Would be up for moving if it means our already high mortgage will come down, although of course would have to be careful as to whom!!!!!

Guess will just have to wait and see. Our rate isn't up until September but had just been presuming we were set for a lower payment with all that's going on and when i looked yesterday i got worried that it's actually going to be higher.

Considering the PTSB rates on that page I sent you are much closer to your current, and rates are falling further, I'm still say the chances are very good you'll see a saving next year. Good luck with it!

Lea2000

Cheers Eden, fingers crossed!

ncmc

I got notification after the first ECB interest cut that Irish Nationwide would be passing on the cut to our mortgage, I still haven't received any information about the last interest cut (the one previous to todays). Does anyone know if INBS passed this on?

brettmirl

0.75% cut!
YAY!

That knocks my tracker down again.

copacetic

dotsman wrote: »

Media are reporting that AIB is passing on the last cut from COB tomorrow (both Tracker and Variable). Details here.

This is 5 working days after the ECB cut their rates (which, from what I remember, is the same time frame for when the ECB upped their rates).

Not sure if the other banks have announced when they are applying their changes yet (a quick glance on their websites said nothing and the news only reported AIB).

Perhaps if someone has the time, energy and motivation (definitely rules me out ), it would be interesting to put together a league table of all the banks as to (a) how quickly they pass on the cuts and (b) do they pass it on in full to their variable customers as well. Given that there are more ECB cuts on the horizon, it would be pretty good information over the long term for people to decide what bank they'd like to deal with in future

this didn't happen on that day for me at least, the always pass the decrease on to me dated the day after I pay the mortgage.

dotsman

copacetic wrote: »

this didn't happen on that day for me at least, the always pass the decrease on to me dated the day after I pay the mortgage.

Are you on a tracker? Have you checked your online banking for your mortgage balance, the reference to the rate changing, exactly how much was your repayment after the rate was changed (bearing in mind that interest is calculated daily) and how much interest is being applied to your account (happens every quarter)?

If the rate change reference is happening on the wrong date, I'd say give them a ring and find out. If the rate is being applied on time, but your repayments are not reflecting this, the good news is that the money is coming off your principle and thus, you are shortening the term of your mortgage.

dotsman

Just to update everyone, ECB has decreased their rate again by 0.75%. Effective from the 10th.

At the moment, Halifax and AIB are the only 2 banks who have, so far, confirmed they will pass on the rate cut in full.

copacetic

dotsman wrote: »

Are you on a tracker? Have you checked your online banking for your mortgage balance, the reference to the rate changing, exactly how much was your repayment after the rate was changed (bearing in mind that interest is calculated daily) and how much interest is being applied to your account (happens every quarter)?

If the rate change reference is happening on the wrong date, I'd say give them a ring and find out. If the rate is being applied on time, but your repayments are not reflecting this, the good news is that the money is coming off your principle and thus, you are shortening the term of your mortgage.

yes, I'm on a tracker, they say the same as you, it comes off principle, interest is calcd daily and I 'can't lose'.

However when the rates were going up they always managed to get the change in between the date of announcement and my payment. I just don't believe that they aren't getting something out of it, if they aren't why the delay in passing on decreases but the speed to pass on increases?

I'm not overly complaining though, by the looks of it AIB are up there with the best of them with passing on rate changes etc...

dotsman

Firstly, those quotes on mortages.ie are very much out of date. You can definitely get better. Check out the various banks websites. AIB and Halifax seem (to me!) to be the only 2 banks actively competing and reducing rates quickly. With todays rate cut, both the above banks will be passing it on to their Standard Variable rate customers (should move to circa 3.8% APR). Oh, by the way, when comparing mortgage rates, always compare the APR and not the actual rate!

At the moment, I would advise avoiding PTSB like the plague. TSB began a drive a few years ago to expand their market share rapidly (using an actor famous for being a crook!, 100% mortgages and free banking). The vast majority of those who joined PTSB were young First Time Buyers.

Given how the market is gone now, PTSB has a ridiculous number of customers in Negative Equity who are stuck with them (can't switch as no bank will voluntarily take on a mortgage that exceeds the value of the security). Thus, PTSB are free to charge ridiculous rates (as they are doing) as they know that the majority of their customers are stuck with them:mad:.

OK, a few questions:

1. Why do you want/need to go for another Fixed Rate?
2. Are you able to (and willing) to switch banks?
3. When you say your mortgage went up €300 with the last rate change, how can this be if you are on a Fixed rate?

dotsman

copacetic wrote: »

yes, I'm on a tracker, they say the same as you, it comes off principle, interest is calcd daily and I 'can't lose'.

However when the rates were going up they always managed to get the change in between the date of announcement and my payment. I just don't believe that they aren't getting something out of it, if they aren't why the delay in passing on decreases but the speed to pass on increases?

I'm not overly complaining though, by the looks of it AIB are up there with the best of them with passing on rate changes etc...

But the ECB rate changes don't always take affect from the same date. See here for when the changes actually took place.

Just checked my online banking there, and over the past year:

1. Rate went up on July 9th, applied to my account on the 16th - 5 working days.
2. Rate went down October 15th, applied to my account on the 22nd - 5 working days
3. Rate went down November 12th, applied to my account on the 19th - 5 working days.

I can't say fairer than that. Can you confirm that your rate changes were applied the same date as mine? I would imagine they would do it for everyone across the board at the same time.

copacetic

dotsman wrote: »

But the ECB rate changes don't always take affect from the same date. See here for when the changes actually took place.

Just checked my online banking there, and over the past year:

1. Rate went up on July 9th, applied to my account on the 16th - 5 working days.
2. Rate went down October 15th, applied to my account on the 22nd - 5 working days
3. Rate went down November 12th, applied to my account on the 19th - 5 working days.

I can't say fairer than that. Can you confirm that your rate changes were applied the same date as mine? I would imagine they would do it for everyone across the board at the same time.

Maybe you are right, I don't have only access to my account I just remember that I got the increase before payment, the decrease after. I do know the last one was as yours. It looks like I may have been unfair though based on your link and examples:o.

My repayments fall on the 18th, which would mean based on your dates I just got unlucky. I guess we will know this month for sure as I have plenty of time until next payment,

dotsman

copacetic wrote: »

Maybe you are right, I don't have only access to my account I just remember that I got the increase before payment, the decrease after. I do know the last one was as yours. It looks like I may have been unfair though based on your link and examples:o.

My repayments fall on the 18th, which would mean based on your dates I just got unlucky. I guess we will know this month for sure as I have plenty of time until next payment,

If your repayments fall on the 18th, that explains everything (2 days after the rate was increased and 1-4 days before the rate was decreased)!:D

copacetic

dotsman wrote: »

If your repayments fall on the 18th, that explains everything (2 days after the rate was increased and 1-4 days before the rate was decreased)!:D

they must be part of the NWO conspiracy and put me on that date as they knew years in advance the dates of increases and decreases!!