pTSB interest rate hike

dcr22B

danbohan wrote: »

banks should find loopholes so they can make all trackers into variable rates they are supposed to be a business after all

Good luck to them on that one, the difference as it stands right now between the rate I pay on a tracker and what it would be variable over the life of my mortgage would be nearly €200k which is pretty much what I have left on my mortgage.

I wonder how much it would cost the banks short term to buy people out of their trackers?

And no, I'm not looking to make a quick buck as it wasn't my fault that PTSB offered me a tracker. I didn't ask for it.

Rabidlamb

http://www.independent.ie/business/personal-finance/property-mortgages/ebs-latest-to-increase-interest-on-mortgages-2535787.html

Permanent TSB, which is increasing its variable rates by 1pc from March 7, has effectively shut off the option of fixing, according to Michael Dowling of the Independent Mortgage Advisers Federation.

The two-year rate will rise from 5.25pc to 7.25pc. The seven-year rate will go from 6.1pc to 9.1pc, for those who have a 20-day option to fix again.

Is the way of the future for all banks ?.
It's the 80's all over again.
They make the VHI look competitive.

Lord Nikon

The price of everything in this country has gone up, not just interest rates, this adds to the burden for everyone. What has gone down, their net income!

Not only are the banks screwing us over with increased tax rates, so are the government. You cannot tax a country into prosperity, you only make it worse.

BostonB

Prosperity isn't an option for the next decade or so.

danbohan

Kennie1 wrote: »

I am on a tracker myself so not effected by rate hikes as yet,a big fan of the permo because of it has not been bailed out by tax payers, but with all the rate hikes and the fact that the permo is using the ELS I am begining to believe that there should be some type of government intervention here, looking at news this evening and they have upped 5 year fixed rates to over 8% effectively pricing people out of the fixed rate market.

whos to say variable rates wont reach 8% , so what happens then everybody priced out of the market ?

Lord Nikon

Maybe Nama will buy out my bankruptcy?

There should have been a NAMA for all those in negative equity.

danbohan

rainbowtrout wrote: »

So the customer who chose to take a tracker should be penalised for choosing an interest rate which is currently working out well for them? How can you justify that?

If banks could just tear up mortgage agreements each time they made a loss on a mortgage then all agreements would be worthless.

banks are a business , trackers are a loss making part of that business , they are contributing to losses in the banks , if a pub is selling beer at 1 euro and it costs him 2 euro he will keep doing so even it forces his business to close ?

BostonB

danbohan wrote: »

whos to say variable rates wont reach 8% , so what happens then everybody priced out of the market ?

I remember talking to a broker in 2000 and they were on a fixed rate of 8%. They said they were happy with that at the time, because when they got that, their broker was on a fixed of 12%. That always stuck in my mind.

robtri

Just reading this thread and you constantly see comments saying they tired of hearing " no one put a gun to your head" and "no one forced you to take out the mortgage" types.

as much sympathy as I have with people who are in arrears or are struggling, these comments are true.

PSTB are putting up their interest rate to cover losses, 1% now wont seem to bad when in the next few years it goes up by another 3% or 4%.

even the name of the mortgage says it all " variable" which means it can go up and can go down....

stop blaming the banks and the developers, we as a nation caused this.... banks and developers lent and built only becuase we as a nation where willing to buy at any price...

BostonB

Stop lumping everyone together. Not everyone caused this.

If like saying, someone else ran a red light, but because we are driving cars we're equally to blame. Sorry but no.

danbohan

BostonB wrote: »

I remember talking to a broker in 2000 and they were on a fixed rate of 8%. They said they were happy with that at the time, because when they got that, their broker was on a fixed of 12%. That always stuck in my mind.

and thats only 10 years ago , a lot people seem to think we cant see it ever again

F-Stop

robtri wrote: »

we as a nation caused this...

I'm used to getting blamed for things that I had nothing to do with, but I think this is taking it a little far. How did I cause this?

Monty Burnz

BostonB wrote: »

Theres a difference between taking out a mortgage and being sold a completely inappropriate mortgage.

Bear in mind that only a few years ago we had people screaming blue murder that they were turned down for a mortgage, or that the bank would only let them borrow 6x or 8x their income or whatever. I didn't hear too many people defending the banks in those days either.

'How am I supposed to afford a house when they will only lend us 8 times our combined salaries?' Of course the key point that most people missed is that the more relaxed banks were about how much they would lend, the higher prices would go anyway. If the banks lend a maximum of 4 times the average income of (say) 30k, then average house price costs (say) 120k. If the bank lends 8 times the same average salary, the same average house now costs 240k.

BostonB

I also remember the early 90's when there was no work, especially none in building industry. I remember 4 bed detached houses in Dublin for sale for 35k and sitting for a year or two unsold. I don't think it will go back that bad, but that doesn't seem that long ago either. 30yrs I know. (Man I'm getting old).

noworries

danbohan wrote: »

and thats only 10 years ago , a lot people seem to think we cant see it ever again

Not alone do they think that we can't see it ever again but they also seem to think that if we do, that they are somehow entitled to a bailout coz it was through no fault of their own blah, blah

The 'Beacause I am worth it' generation are about to get the biggest financial kick in the nuts ever and I feel sorry for them.. Financial lessons come at a huge personal cost but they have to be re-learned every generation- more is the pity.

It's sink or swim time and I fear many have sunk themselves before the hardship really starts.

BostonB

Monty Burnz wrote: »

Bear in mind that only a few years ago we had people screaming blue murder that they were turned down for a mortgage, or that the bank would only let them borrow 6x or 8x their income or whatever. I didn't hear too many people defending the banks in those days either.

'How am I supposed to afford a house when they will only lend us 8 times our combined salaries?' Of course the key point that most people missed is that the more relaxed banks were about how much they would lend, the higher prices would go anyway. If the banks lend a maximum of 4 times the average income of (say) 30k, then average house price costs (say) 120k. If the bank lends 8 times the same average salary, the same average house now costs 240k.

I thought it was pretty common to discuss how crazy people were to get big mortagages at that time. Was a common subject in the pub. Ironically enough some of those I used to talk to about it, forgot about a few years later and took out those big mortgages. But it certainly was discussed at the time.

BostonB

That said it doesn't matter anymore. Even if you don't have a mortgage. Everyone will be effected now. I'm hearing lots of people really questioning if they can afford to live in Ireland anymore.

gleep

No-one seems to have touched on the fact that the other banks will row in behind Perm TSB in a few months with the same rate rises! So if you're not a PTSB mortgage holder, start planning ahead.

The Irish Times had a report last week saying the housing market had hit the bottom. Bollocks. The interest rate rises coming down the line (there will be more soon, btw) will ensure prices tumble further still.

BostonB

Its got a long way to go yet IMO.

Monty Burnz

gleep wrote: »

The Irish Times had a report last week saying the housing market had hit the bottom. Bollocks. The interest rate rises coming down the line (there will be more soon, btw) will ensure prices tumble further still.

I hope if the Irish populace learns one thing, one lesson about this whole debacle, it is that you have to ask 'why is someone telling me this' instead of just taking them at their word. The newspapers made a fortune from property advertising - they were afraid to tell the truth about the bubble (even if they knew it) because that advertising could be pulled. And most of the 'property experts' who were telling us the prices couldn't go down, that property was 'safe', that there would be a 'soft landing' - those were all people working for banks, estate agents, the construction industry. All of them had a vested interest in keeping the bubble inflating. If one of the economists working for a bank had said 'things are looking very much like a bubble - you'd be mad to buy', he would have been clearing out his desk the next day.

Information about the property market/economy can only be free of bias if it is coming from someone outside the system, someone without a vested interest in talking things up (e.g. Prof. Morgan Kelly, McWilliams, The Economist etc.).

Rabidlamb

gleep wrote: »

The Irish Times had a report last week saying the housing market had hit the bottom. Bollocks. The interest rate rises coming down the line (there will be more soon, btw) will ensure prices tumble further still.

Correct & true.

I also remember the early 90's when there was no work, especially none in building industry. I remember 4 bed detached houses in Dublin for sale for 35k and sitting for a year or two unsold. I don't think it will go back that bad, but that doesn't seem that long ago either. 30yrs I know. (Man I'm getting old).

If were going back to interest rates like the 90's then who knows.
Earnings are higher so I suppose 4x salary wont be too far off.

Kennie1

danbohan wrote: »

whos to say variable rates wont reach 8% , so what happens then everybody priced out of the market ?

I mean that people are being priced out of the market by the margin between fixed and variable, this is what is called being priced out of the fixed rate market. Your right interest rates could reach 8% possible 10% who knows maybe even 12%?

Thing is though that it is not costing PTSB 8.75% for the loans that it has on varialbe rate loans, what they are actually doing is charging their variable rate customers for the losses that they are sustaining on their tracker customers. Its not variable rates customers fault that PTSB Fcuked up when they introduced loss making trackers. Dont forget that the losses for the group as a whole was only 10 million for 2009 because the life company pluged the massive losses in the bank. And this should continue into the future as it was their fault, but the group wants to make the PTSB profitable again by charging this punitive rate so it can sell off the PTSB and gets life company share price back upto 7 odd euro and start paying dividents to its shareholders!

You want to know what would happen if it reaches 8%, open your eyes and look around and see what is happening already with an interest rate of 4.19%... more people are being forced into arrears, more are facing default because of interest rate hikes etc... What happens as a conequence of 8.75%...people lose thier homes and who rehouses them? yea you got it, the government who has to borrow more money from EU/IMF which we as tax payers have to pay eventually. Then this money is used for rent relief, which happens to pay land lords who are using rent to pay their RIP mortgage so they can build up more wealth. Better help people now and help people retain their homes so they can contribute to the economy thus getting us out of the mess that we find our country in!

Rabidlamb

I've just done a quick calc here to work out a monthly payment comparison.
http://www.drcalculator.com/mortgage/

I took my own mortgage, €184k over 25 years taken out in 2005.

Current payment based on .95% tracker over 1% ECB = €775 p/m.
2 Year fixed with PTSB @ 7.25% = €1330 p/m.

That's €555 p/m more for the same bricks & mortar.
Ok, nobody is stupid enough to take out one of these but what happens when those trapped on variable rates reach this height.

It's going to be a bloodbath, increased TRS isn't going to offset this.
Dark days ahead.

robtri

F-Stop wrote: »

I'm used to getting blamed for things that I had nothing to do with, but I think this is taking it a little far. How did I cause this?

individually I cant answer that but as a nation we did...

danbohan

Rabidlamb wrote: »

I've just done a quick calc here to work out a monthly payment comparison.
http://www.drcalculator.com/mortgage/

I took my own mortgage, €184k over 25 years taken out in 2005.

Current payment based on .95% tracker over 1% ECB = €775 p/m.
2 Year fixed with PTSB @ 7.25% = €1330 p/m.

That's €555 p/m more for the same bricks & mortar.
Ok, nobody is stupid enough to take out one of these but what happens when those trapped on variable rates reach this height.

It's going to be a bloodbath, increased TRS isn't going to offset this.
Dark days ahead.

or any house bought from 2008 onwards after trackers finished, and some genius says the property markets at the bottom , yea right

BostonB

robtri wrote: »

individually I cant answer that but as a nation we did...

I don't think what happened was within the remit given by the nation though.

In Iceland they have a court for misconduct in government office. I wonder will we see that here. I doubt it though.

Ozziej

Rabidlamb wrote: »

I've just done a quick calc here to work out a monthly payment comparison.
http://www.drcalculator.com/mortgage/

I took my own mortgage, €184k over 25 years taken out in 2005.

Current payment based on .95% tracker over 1% ECB = €775 p/m.
2 Year fixed with PTSB @ 7.25% = €1330 p/m.

That's €555 p/m more for the same bricks & mortar.
Ok, nobody is stupid enough to take out one of these but what happens when those trapped on variable rates reach this height.

It's going to be a bloodbath, increased TRS isn't going to offset this.
Dark days ahead.

Jaysus its sell and rent for me if that happens. Not far off though, after PTSB announcement. Well in 20 years, when I'm out of negative equity. God bless Moulin des costes.

nb83

did anyone try and fix there rates before they made the announcement on the 11th? I asked for the letter to be sent out on the 3rd of Feb, i did not receive the letter till the 8th and sent it back in the post on the 10th and got a letter yesterday saying that I was not within the 7 day period. Can anyone advise me on this please?

ANXIOUS

nb83 wrote: »

did anyone try and fix there rates before they made the announcement on the 11th? I asked for the letter to be sent out on the 3rd of Feb, i did not receive the letter till the 8th and sent it back in the post on the 10th and got a letter yesterday saying that I was not within the 7 day period. Can anyone advise me on this please?

Id say it went something like you ordered it the thursday it was printed and posted on the 4th sat in An post saturday and sunday and then two days to get to you. Not much you can do, you couldve sent it registered or express.

nb83

well i rang on the 11th and asked if i could fax it and was told no, but when i rang back when on the 15th to ask if they had got my letter i was told that they were actually excepting faxes and that it was the only way it would have reached them in time. the bank are now in the process of searching for the phonecall to see if i was told not to fax it.
I wonder if the rates are valid for 7 days of when the letter was dated or when the letter was received?