Fixed-rate mortgages abolished?

m4r10

Now with all the talks of the banks following in Permanent TSB and EBS's foot steps on raising the rates, I was thinking at fixing the rate. But lately I read various articles in newspapers that the banks will try to abolish the fixed-rate mortgages as they are losing money with them. My questions are:

• how are they most likely to proceed in getting rid of the fixed-rates?

• would this be even legal?

I mean, they were more than happy to charge me a couple of years ago way over the variable rate as I had the mortgage fixed before they came down, but now they want to get rid of it? The cheek of them!!!

coylemj

m4r10 wrote: »

• how are they most likely to proceed in getting rid of the fixed-rates?

They will stop offering them. Contractually they will be obliged to see out any existing arrangements.

m4r10 wrote: »

• would this be even legal?

Yes, you can't force a pub to stock a particular brand of beer so why shouldn't it be legal for a bank to stop offering fixed rate loans?

BTW, that article you read is complete BS if they were talking about fixed rate mortgages, it's more likely they were referring to tracker mortgages.

As long as there are people with money to deposit who want certainty on interest rates, banks will offer fixed rate loans, that's where the money comes from.

m4r10

Yeah, I'd guess that they can't be forced to offer fixed-rates if they don't want to, I was thinking at this from a moral point of view as well, but who cares about ethics when there are bilions of Euro involved.

This is the article I was talking about and it refers to fixed-rates mortgages.

coylemj

m4r10 wrote: »

This is the article I was talking about and it refers to fixed-rates mortgages.

That article was effectively written for the Indo by a guy who works in financial services and who knows that journalists are mainly lazy tossers who will quite happily take a 'report' and reprint it almost verbatim. The report you read was probably e-mailed in that format to the Indo and reproduced word for word by the journo. The classic giveaway is the reference in the second paragraph to the fact that the guy correctly predicted an increase in variable rates last year - when you're writing something yourself but referring to yourself in the third person, most people can't resist a bit of vanity.

Sorry to sound like a cynic but believe me people who work in PR and marketing do this type of thing all the time, they write a 'report' that doesn't offend anyone, make it sound like it's vaguely in the public interest, send it to a journo and if it's a quiet day the entire article will be printed exactly as you wrote it while making it look like the journo has read your 'report' and written an article around it. You get free advertising and the journo can take a long lunch, everyone wins!

ferga_com

I'd agree with coylemj. Banks are far more likely to increase the fixed rates they offer than to abolish them altogether.

m4r10

Glad to hear that at least they will see out any fixed-rate if and when I decide to fix. Thanks for your replies.

nb83

does anyone know if fixed interest rates are valid from the day you receive the letter or from the day the letter is dated?

dave1982

nb83 wrote: »

does anyone know if fixed interest rates are valid from the day you receive the letter or from the day the letter is dated?

I assume it would be the date on the letter

nb83

My letter didnt come in the post till day 5 and I posted it back on day 7 but now they are saying that didnt receive the letter in time and they wont be offering me the fixed rate.

m4r10

nb83 wrote: »

My letter didnt come in the post till day 5 and I posted it back on day 7 but now they are saying that didnt receive the letter in time and they wont be offering me the fixed rate.

It is different from bank to bank. I was on the phone with AIB and was told that the letter they send with the various rates is just for information purpose only and carries no obligation from AIB's part to honor the rates in the letter. If the rates will go up while the letter is in the post, then you'll pay the new rates, not the ones stated in the letter.

nb83

well they just rang back and said they wont honour the rate cause my letter was received outside the time frame. im not going to leave it go.

m4r10

Good luck with that, although I don't think you'll have too much success.

You should've dropped the letter into a branch, that way they won't penalise you for the time it takes them to process your request - or so I was told!

nb83

Ya i did ring the branch to see if i could fax it to them or hand in a signed photocopy and they told they couldnt do anything about it and it was up the mortgage dept in dublin. So i just left it up to the post then cause ur man in the branch said that they'd hardly be that mean!

ferga_com

Write a written complaint to the lender outlining all the details you have outlined here and asking them to give you a final response in writing. If they still refuse to budge, take a complaint to the Financial Services Ombudsman.