pTSB interest rate hike

bryaner

noworries wrote: »

what is an 'inappropriate mortgage?'

Did the punters not flock to the banks with their application forms filled out
with their proof of earnings and their evidence of savings?

Did the punters not queue overnight to sign on the dotted line for the off-plan money making bonanza.

Did the punters not rejoice when they launched the Hermes bag of dreams
in BT's and queued around the block to get their grubby little manicured hands on it..

You reap --- oh you reap - what you sow. The piper WILL be paid.

The piper will get sh!t all, example bank takes house, council rehouse costing the country more, bank bring the ex owners to court for what they owe owners state inability to pay blah blah.

End result banks get sh!t all..

Dempo1

Iago wrote: »

Everything apart from the bold in this discussion is irrelevant.

If you're running a business and you are paying 7.5% on money you borrow and then charging 3.5% on money you lend then you won't be long about going out of business. This is all basics, at one point in the 80's mortgage interest was up around 18% or so because that was the only way the banks could make money and remain in business.

6-8% mortgage interest is probably around standard and where we will probably end up over the next couple of years imo

So things in the 80's were nice and dandy were they?

I for one will be ****ed if another 1% is added on, I'm currently paying 4.7%. I'm not one of those who took out 100% mortgages, i am one of those many many people who took out a small responsible mortgage and whilst nowhere near negative equity, my earnings have dropped substantially. I also invested in a HOME, not a piece of investment property.

Some appear to forget, Banks back in the good old days lent money against small rates they were paying back in in the early and late 90's, they now appear to be hammering people because of the rates they have to pay now, the odd thing is there not lending any money these days so why the need to continuously hike rates.

As for the trackers, tough titty i say, are we to sympathize with the banks for what were at the time considered a sensible product, they gambled, pity about them and fair play to anyone lucky enough to have taken out a tracker mortgage.

noworries

bryaner wrote: »

End result banks get sh!t all..

Step back and look at the bigger picture....

The piper is not the banks.

The piper HAS been paid - the bondholders have their money - Ireland Inc has the debt to prove it.

A generation will be lost but back on topic.
Sucks to have a variable.

BostonB

noworries wrote: »

what is an 'inappropriate mortgage?'...

I don't think there is a legal or regulatory definition. But for me, it would be along the lines of...

...where the level of risk was unsuitable for a particular client based on the information given to the adviser...

bryaner

noworries wrote: »

Step back and look at the bigger picture....

The piper is not the banks.

The piper HAS been paid - the bondholders have their money - Ireland Inc has the debt to prove it.

A generation will be lost but back on topic.
Sucks to have a variable.

True, the bondholders should be Bbq'd

BostonB

noworries wrote: »

Step back and look at the bigger picture....

The piper is not the banks.

The piper HAS been paid - the bondholders have their money - Ireland Inc has the debt to prove it.

A generation will be lost but back on topic.
Sucks to have a variable.

True. The banks should not have been able to get their loans either. That doesn't excuse what they did either.

phil1nj

I called Permanent TSB this morning to enquire about the rate hike and to see what fixed rate options were available seeing as I'm currently on a variable rate with them and their website does not list fixed rates for existing customers. The person I spoke to claimed that it is just speculation and no definite decison has been made about the 1% hike (read: based on past form, its definitely on the way).

A 1% hike will be tough to shoulder but with little or now choice available to me it will be paid. What's at the back of my mind though is where does it end? If ECB rates do rise in the coming months/years will PTSB and the other financial institutions use this as a valid excuse for another round of rate increases despite them claiming that there is no correlation between the two rates at the moment.

Oh and just to add insult to injury, if I did decide to switch to a fixed rate for 2 or 5 years (only options given to me by PTSB) I will have to pay a 100Euro administration fee for the privilage.

noworries

Look, variable mortgage rates, in most cases, are priced off the Euribor 3 month rate which has a long term average(10 years) of approx 3%.

Banks need to make a margin on this and without competition the will look to
make approx 2 percent on this - so you get roughly 5% rate give or take a bit
of competiton.

However, all the financial institutions in Ireland are insolvent so they need
another few basis points to make a further profit in order to pay off thier
creditiors so say 6.5%. The ones that are hoplessly screwed will try to make
more to avoid being wound up.

Average mortgage interest rates in the rest of Europe are about 5.8% -
barring any shocks in inflation (which are lurking in the background) I would
expect that a mortgage interest rate of 7% is not too far away and I
would urge any mortgage holder to 'stress test' themselves against that
figure.

Now for the disclaimer - I don't have a mortgage anymore - I lived through
the currency crisis in '91 when the mortgage rate went to 13% and slowly
came down to 4.5% by the end of the 90's I beleive that any rate under
5% is not sustainable as inflation will quickly kill off any gains.

Moaning and whining about a mortage rate increase to 5% is a waste of time. Conserve your energy for when the rates of pTSB mortgages reach 9%

Rabidlamb

I see this as opportunism as they'll get the double whammy of the ECB rate hikes expected in the summer.

I seem to remember that the PTSB have a high proportion of customers with trackers so they are only gouging a small trough.
I'd like to thank these poor unfortunate variable customers for their selflessness in keeping the banks solvent.

I take it the others will follow suit once the horror had died down.
They'll be sure to do it before the new government have to feel the public wrath.

BostonB

Out of curiosity what fixed rate deals are people being offered?

Dempo1

BostonB wrote: »

Out of curiosity what fixed rate deals are people being offered?

Pretty much Take it or leave it by all accounts

PTSB know full well their customers are stuck with them, no other bank is accepting transfer of mortgages!

At best they might offer a 5 year fixed deal but this will only reflect what they are proposing this week.

Mr Velo

BostonB wrote: »

Out of curiosity what fixed rate deals are people being offered?

2 year fixed: 5.25%
5 year fixed: 5.75%

7 to 10 fixed: 6.1%

Iago

It's all nonsense. Nobody had a gun held to their head and was told to get a mortgage.

Nobody on a variable mortgage can stand up and say "ah well, it was only supposed to be variable while it was in my favour you know"

Whether your in work, out of work, reduce hours, reduced pay, reduced take home because of taxes, whatever. None of this matters, or should matter, to the banks. They are businesses, they have to make money. If you did sign up to a variable (or tracker) mortgage and didn't do any stress testing for yourself for the biggest financial decision you were ever going to make well then that's your failing, and regardless of who you want to blame it lies squarely with you.

btw, mortgage interest is still at close to historic lows, it's only going one way.

solerina

The biggest problem isnt that mortgage interest rates are rising because yes some of us realised that was likey to happen. My problem and many liek me is that our wages are falling dramatically.
When I took out my mortgage in Nov 2006 I was paying 50% of my wages on my mortgage each month....I saw this as Ok as I am on a fixed scale so I realised that my wages would rise yearly and I could afford hikes in the longer term (and obviously afford it when TRS was taken away from me)....However no one could have forecasted that my wages would be eroded as much as they have been....I am now earning the same amount as I was when I took out the mortgage despite gaining a promotion in work (down approx 600 a month)...I know I am lucky to have a job before anyone jumps down my throat !!!!

BostonB

Allow for a crash, difficult times, interest rates to rise to 10% ish ok. I'm not sure any one would have predicted the country would be as good as bankrupt.

Iago

solerina wrote: »

The biggest problem isnt that mortgage interest rates are rising because yes some of us realised that was likey to happen. My problem and many liek me is that our wages are falling dramatically.
When I took out my mortgage in Nov 2006 I was paying 50% of my wages on my mortgage each month....I saw this as Ok as I am on a fixed scale so I realised that my wages would rise yearly and I could afford hikes in the longer term (and obviously afford it when TRS was taken away from me)....However no one could have forecasted that my wages would be eroded as much as they have been....I am now earning the same amount as I was when I took out the mortgage despite gaining a promotion in work (down approx 600 a month)...I know I am lucky to have a job before anyone jumps down my throat !!!!

BostonB wrote: »

Allow for a crash, difficult times, interest rates to rise to 10% ish ok. I'm not sure any one would have predicted the country would be as good as bankrupt.

I don't dispute either of these things, within reason. I think the scale and speed of the crash has surprised the vast bulk of people.

However the interest rate rise isn't really an issue there. The issue from that is the over-reaching mortgage principal and monthly payment. The additional amount brought on by the rise in interest rates is nearly an afterthought for people who are affected by that. I can understand them being stressed and raging at it, but I can also see that this rise was an inevitability and that with proper planning at least some of the pain could be avoided.

Ultimately it's going to mean sacrificing some of the luxuries that people have started to take for granted and it'll be a long hard slog to the other side.

phil1nj

Iago wrote: »

It's all nonsense. Nobody had a gun held to their head and was told to get a mortgage.

Nobody on a variable mortgage can stand up and say "ah well, it was only supposed to be variable while it was in my favour you know"

Whether your in work, out of work, reduce hours, reduced pay, reduced take home because of taxes, whatever. None of this matters, or should matter, to the banks. They are businesses, they have to make money. If you did sign up to a variable (or tracker) mortgage and didn't do any stress testing for yourself for the biggest financial decision you were ever going to make well then that's your failing, and regardless of who you want to blame it lies squarely with you.

btw, mortgage interest is still at close to historic lows, it's only going one way.

You need to relax my friend. I think a lot of people are well aware of the fact that rates can go up as well as down. What most people are also well aware of is that this country is now in the midst of one of the worst economic crisis that has ever been seen yet every single policy or decision made by institions that have a say over how large proportions of your income are spent seem intent on turing the screw. By this I mean the banks and the government. The Government have increased taxes, lowered tax bands, brought in a USC (a bank tax to all intents and purposes). Meanwhile the lending institutions (banks, building societies etc) have all increase their lending rates, are about to reintroduce fees and are now hiking up interest rates on mortgagges. Both of these severely reduce the spending power of the population which results in a further drop in revenues from transactional taxes and pushes us further in to the mire.

If we are serious about getting this country back on its feet I don't think crippling workers or mortgage holders is the way to go. Every extra euro taken by the banks or taxman is a (multiple of a) euro that won't get spent in the economy. You can shout all you want about mortgage rates been at historically low levels but surely all of that information is relative. Just think about what will happen should people starting getting in to serious levels of arrears or defaulting on a grand scale? How much extra will it cost the government either rehousing these people or paying out mortagage supplements to people who meet the criteria?

BostonB

You're probably right. The issue is not the interest rate. Though it doesn't help. Its the much bigger drop income for even relatively prudent people.

Iago

phil1nj wrote: »

If we are serious about getting this country back on its feet I don't think crippling workers or mortgage holders is the way to go. Every extra euro taken by the banks or taxman is a (multiple of a) euro that won't get spent in the economy. You can shout all you want about mortgage rates been at historically low levels but surely all of that information is relative. Just think about what will happen should people starting getting in to serious levels of arrears or defaulting on a grand scale? How much extra will it cost the government either rehousing these people or paying out mortagage supplements to people who meet the criteria?

I don't really disagree with much of what you're saying, what I do disagree with is the "How dare the banks give me the money I asked for" mentality.

but to spin that last paragraph a little. Is the best way to get the country back on it's feet to let the entire financial system collapse? Particularly in relation to PTSB who haven't had a government bailout.

That's what will happen if the government are successful in keeping the mortgage interest rates down at below cost rates.

sollar

Apparantly there are new bankruptcy laws coming in at end of march 2012. This will be good news for alot of people. There has to be relatively fair way out of the mess some people have found themselves in over massive mortgages and NE.

1% increase, prob another increase or 2 next year and on top of that ECB increases...... its going to be grim for thousands of people.

Ask the canvassing politicians when they come to the door what are they going to do for these people?

danbohan

fcdub wrote: »

I stand corrected (danbohan). Its not the banks fault, I see that now. The regulator did a great job to control the bubble. He also kept a keen eye on the practices at Anglo.

We better tell our friends in France that their interest rates, that have been stable for the last 20 years at between 3 and 5 percent that they are about to double! They probably dont know.

My goodness its all so clear now. The public should regulate the financial industry, theres no need for watchdogs, we could save a fortune for the state! Its the publics fault when things go wrong and taxes skyrocket because we have to borrow 85 billion from the IMF.

Thanks for pointing out that interest rates could only go one way, I had no idea.

I think my problem, apart from being totally stupid, was that I didnt see unemployment going through the roof in three years, I didnt see the major tax increases coming!

If only I had spoken to you guys before. You must have made a fortune on spreadbetting. Oh know youre not greedy!

want make a little bet our interest rate be like Frances in 3 years time ?

so its not just the banks , developers , politicians fault , its everybody elses now too
you have ruined my sleep!

have a look in the mirror tomorrow fellow , thats whos responsible for your current situation , deal with it

nlgbbbblth

noworries wrote: »

what is an 'inappropriate mortgage?'

Did the punters not flock to the banks with their application forms filled out
with their proof of earnings and their evidence of savings?

Did the punters not queue overnight to sign on the dotted line for the off-plan money making bonanza.

Did the punters not rejoice when they launched the Hermes bag of dreams
in BT's and queued around the block to get their grubby little manicured hands on it..

You reap --- oh you reap - what you sow. The piper WILL be paid.

you forgot this bit.

Some banks turned punters down for mortgages because they genuinely believed repayment capacity wasn't strong enough.

Did the punters say "thanks, you're right, I can't afford it"

Did they f*uck.

They said "f*uck you, I'm closing my account and taking my business elsewhere."

And got the mortgage somewhere else.

BostonB

Oddly enough only a couple of years earlier, they did turn people around a lot with the 2.5 + 1 rule.

Officer Giggles

i know a fella that went into his bank looking for a €350000 mortgage in late 2005, he came out after being offered €400000, he thought this was the best thing ever and put himself to the wall with repayments, bet he's regretting it now!! he knew before he went in he could only afford 350 but yet grabbed the extra 50 with both hands when offered, there will always be hard luck stories where maybe both people loose their jobs and to them i feel for but not the idiots who borrowed way over their heads and now blame everyone else for their own mistakes and thinnk the politicans should introduce schemes to bail them out, look at that CLOWN joe mc namara the so called anglo avenger he owes them 3.5 million for f***s sake, he has 22 apartments in galway and he tries to portray himself as the ordinary joe whose trying to have his home taken off him and you have all the cry baby liberal do gooder groups coming out in support of him and they genuinely think he's being hard done by

Kennie1

nlgbbbblth wrote: »

you forgot this bit.

Some banks turned punters down for mortgages because they genuinely believed repayment capacity wasn't strong enough.

Did the punters say "thanks, you're right, I can't afford it"

Did they f*uck.

They said "f*uck you, I'm closing my account and taking my business elsewhere."

And got the mortgage somewhere else.

At last a bit of common sence and i can personally bear wittness to this post, I got a mortgage agency back in '06. The abuse i got from a few people was something terrible. I go accross the road and get a mortgage so!

Back to the OP, a 1% increase is a massive increase by anyones standards and it is going to inflict a lot of pain to those that are already in trouble or indeed will push a lot of people over the edge. I have a mortgage that the repayments represent near 40% of my income now, I prefer to blame the gobsh1tes that got me into this mess; that is the Gov, Regulator, the banks that got their risk acessment models completely wrong and of course most of all myself for being so stupid to borrow the max that my income would allow at the time. Live and learn I guess!

Dempo1

Officer Giggles wrote: »

i know a fella that went into his bank looking for a €350000 mortgage in late 2005, he came out after being offered €400000, he thought this was the best thing ever and put himself to the wall with repayments, bet he's regretting it now!! he knew before he went in he could only afford 350 but yet grabbed the extra 50 with both hands when offered, there will always be hard luck stories where maybe both people loose their jobs and to them i feel for but not the idiots who borrowed way over their heads and now blame everyone else for their own mistakes and thinnk the politicans should introduce schemes to bail them out, look at that CLOWN joe mc namara the so called anglo avenger he owes them 3.5 million for f***s sake, he has 22 apartments in galway and he tries to portray himself as the ordinary joe whose trying to have his home taken off him and you have all the cry baby liberal do gooder groups coming out in support of him and they genuinely think he's being hard done by

Good man Joe, if only there were more like him.

adcom

Hi all. To anyone who may be affected by proposed increase here is a suggestion. Get in contact with the bank and request a list of the fixed rates. PTSB can automatically generate these letters and have them sent out detailing the repayments to be made on each rate. They are valid for two weeks after the date on them. i.e. if I request a fixed rate letter today and the fixed rates go up tomorrow the letter I will get will have todays rates and not tomorrows. Once I sign the letter I have in my possession with the old rates (within the two week timeframe and including the €100 admin fee- sorry!) I will get the fixed rate on my letter rather than the new fixed rate. If you contact phone banking they can send those letters out- they can also tell you what your repayments would be if the interest rate were to increase by a %. Confirm with them that any fixed rate agreement that is sent to you will be valid for two weeks. If you are going to go on a fixed rate make sure that you copy all documentation (including cheque) before you send it off. If you hand it in at the bank, ask them to stamp it as received and photocopy it for you.These things have a nasty habit of getting lost sometimes!! You can then phone up the bank a few weeks later to confirm the new rate.

P.S. I know that any increase in rates is going to be tough on people but just remember the person you get through to on the phone is not responsible!! As someone who was once (years ago) taking those calls you get a lot more by being pleasant and calm.

Good luck!

JimiTime

Its horrible. We come out of our fixed term of 4.29% in May, and face a €300 increase in our repayments. Combined with the increase the cost of fuel, the USC etc etc its going to be so bloody hard.

Its unfortunate that there are so many, 'Its your fault, deal with it' folk out there. These are unprecedented times, which NO-ONE could forcast. Alot of hindsighters of course.

The reality is this. There are many people who bought a HOME. We have no credit card debt, drive a 90's Nissan Almera. In fact, I've always believed in saving up and purchasing what you need/want, not borrowing.

I am also someone who recommended and scoffed at people speding over €150,000 for a house in a Ballyfermot estate, then scoffed when it breached €200,000. For years I watched, as my advice was shown to be worth nothing. After such things, you begin to doubt yourself. I remember the chief economist of Ulster Bank saying that the average price of a house in Dublin would be at €450,000 by 2014 etc.

I also had friends, with families, who rented. They were constantly on the move, as landlords served them notice etc due to them selling up or whatever. Their frustration as they waited for social housing (Still not forthcoming after years), as their kids were forced to move about, and sometimes to move schools etc.

Now enter me, and my new married life. What do I do? I've been a naysayer for so long, but see the prices rise and rise, propped up by a system which is complicit and encouraging of it. We want a family, and a secure home, but do not qualify for shared ownership or social housing due to our salaries etc, and we get offered a house €75,000 below its market value (A very good friend). There is no way we could save to buy a house, so our option is rent or mortgage.

Rent: Insecure, not a home, no real rights and very expensive.
Mortgage: Same price as renting (actually cheaper with TRS), is secure 'As long as yer paying', and the economy is all good.

So, quite reluctantly, we chose mortgage.

Then BANG. An unprecedented world economy crash.

So I hope people realise, that its not so simple. Whoevers fault it all is, there is a real social crisis coming down the tracks that will effect EVERYONE. I disagreed with the bank bailout, and I don't think a bailout of the average Joe is wise neither. However, SOMETHING should be done to stop people being crippled by osterity measures and ever increasing rates etc. A bank who gave a mortgage based on rates and salary of the time, should not be allowed increase rates that cause it to exceed its affordability check on initial drawdown. Due to paycuts etc, we are earning much less than we were, and huge rate increases etc add to our financial woe.

IMO, an ethical solution is required. For those who simply want us to take it, I would appeal to your selfishness and say that this will become a social issue that will effect you too in the long run.
We can talk about individual stupidity etc, but lets not begrudge families of a decent life. Taking peoples homes and then burying them in the the negative equity debt etc is horrible. Whoever's fault you think it is, lets think of the human cost of all this.

Dempo1

adcom wrote: »

Hi all. To anyone who may be affected by proposed increase here is a suggestion. Get in contact with the bank and request a list of the fixed rates. PTSB can automatically generate these letters and have them sent out detailing the repayments to be made on each rate. They are valid for two weeks after the date on them. i.e. if I request a fixed rate letter today and the fixed rates go up tomorrow the letter I will get will have todays rates and not tomorrows. Once I sign the letter I have in my possession with the old rates (within the two week timeframe and including the €100 admin fee- sorry!) I will get the fixed rate on my letter rather than the new fixed rate. If you contact phone banking they can send those letters out- they can also tell you what your repayments would be if the interest rate were to increase by a %. Confirm with them that any fixed rate agreement that is sent to you will be valid for two weeks. If you are going to go on a fixed rate make sure that you copy all documentation (including cheque) before you send it off. If you hand it in at the bank, ask them to stamp it as received and photocopy it for you.These things have a nasty habit of getting lost sometimes!! You can then phone up the bank a few weeks later to confirm the new rate.

P.S. I know that any increase in rates is going to be tough on people but just remember the person you get through to on the phone is not responsible!! As someone who was once (years ago) taking those calls you get a lot more by being pleasant and calm.

Good luck!

Seriously, do you not think PSTB and indeed any bank planning on raising rates will not have this built into their systems. I doubt very much anyone at PTSB would send out letters offering lower interest rates than they fully intend to implement.

Nice try but i fear false hope!

Patch123

@adcom. Thanks for your advice. However, I rang the bank and was told that fixed interest rates have now been suspended, and will remain suspended for the next ten days. I was also told that there has been no confirmation on the rate increase as yet, so nothing is fully confirmed - but she still worked out the effect of a 1% increase for me. That’s customer service for ya.

To the nobody-held-a-gun-to-your-head brigade: We live in a country where for years public and private discussion among family,friends,media,companies and government was predicated upon the benefits of property investment. My sympathy will always remain with a person in trouble with their mortgage, despite any contract 'freely' entered into: every ‘cue’ listened to in society continued telling us it was a good idea for as long as it was in their interests to do so.

Companies are supposed to act in their own interests, though aren’t they? No amount of regulation will change this. There is a night and day disparity in the power of a bank compared to an individual to act and change their circumstances. We need to change the paradigm, not fiddle with it. I don’t have the answers though - and socialism sure as hell doesn’t work! Anyone got any ideas? Maybe I’m in the wrong forum…