PTSB - new fixed rates (up to 9.1%)

subway

http://www.rte.ie/news/2011/0210/mortgage-business.html

who will engage at these rates?

effectively they are exiting the fixed rate market, but they could just withdraw.
instead they do this, which, IMO, is a way of lettting people know what way the market is going.

in 2 years time when var. rates are at 7-8% and people who buy in the next 3 months say "how could we have known?!?" here is your fair warning

Bluetonic

subway wrote: »

in 2 years time when var. rates are at 7-8% and people who buy in the next 3 months say "how could we have known?!?" here is your fair warning

I think you're optimistic there speaking the plural.

subway

Bluetonic wrote: »

I think you're optimistic there speaking the plural.

http://www.ibf.ie/Libraries/Research_Statistics/IBF_mortgage_stats-NOV2010.sflb.ashx

really? new mortgage lending will drop to 1 or less this quarter?

omahaid

The point of the 9.1% rate is so that people won't get their mortgages fixed

Bluetonic

subway wrote: »

http://www.ibf.ie/Libraries/Research_Statistics/IBF_mortgage_stats-NOV2010.sflb.ashx

really? new mortgage lending will drop to 1 or less this quarter?

Oh dear, let me put on my serious hat.

subway

Bluetonic wrote: »

Oh dear, let me put on my serious hat.

ok, where is it?

Lantus

The whole point of this is to get as many peeps as they can onto variable rates. That way they can increase the amount as they see fit to generate income and raise funds. Fixed rates dont do that so the banks are getting shot of them as quick as they can.

The ECB is making noise about an increase in interest rates to curb inflation. When it does the banks can instantly add this to their variable rates to ensure their income is ensured.

The banks win.

Interest and inflation are like a man with a stick and a wild dog. If the wild dog (inflation) comes at you. You beat it with the stick (interest) until it backs down. When you feel safe the man lowers the stick. This is typically when the dog who has been watching quietly rears up and attacks again.

A really great intelligent cycle.

Senna

PTSB wanted to end fixed rates completely, but anyone on a fixed rate at the moment has a contract which states (ad-lib)"at the end of this fixed rate, you will move to the SVR or be offered another fixed rate". So they have to be able to offer something, of course they just picked a huge number so nobody will go for it, but they do have to have fixed rates available.

I also hate to say it, but 9.1% maybe a reality for many in the near future. An ECB rate of 5% could mean the banks would borrow at 10%+ (1% at moment and borrowing at 7%). With no intervention from the state, SVR could be in the teens. I hope to hell not.

hinault

Disgraceful move by the PTSB.

This latest tactic is in part Peter trying to pay Paul.
At a guess they're losing so much money on Tracker mortgages that they're attempting to offset these losses by increasing variable and fixed rates.
Also at a guess I would say that their loanbook has started to experience an increased level of default/

Cynical move by PTSB.
Especially so as they're allegedly one of the biggest home mortgage providers (as opposed to being commercial loan banks) in this country.

Coupled with their reducing headcount also.

hinault

Senna wrote: »

PTSB wanted to end fixed rates completely, but anyone on a fixed rate at the moment has a contract which states (ad-lib)"at the end of this fixed rate, you will move to the SVR or be offered another fixed rate". So they have to be able to offer something, of course they just picked a huge number so nobody will go for it, but they do have to have fixed rates available.

I also hate to say it, but 9.1% maybe a reality for many in the near future. An ECB rate of 5% could mean the banks would borrow at 10%+ (1% at moment and borrowing at 7%). With no intervention from the state, SVR could be in the teens. I hope to hell not.

I think if interest rates do climb to the level that you have referred to, it will mean kaput for this entire country.

€107 billion is outstanding on home loans at present.
The values underpinning the assets for those loans has decreased.
Hiking up interest rates diminishes existing borrowers ability to repay.
It's a double whammy.

And that's without looking at the other adverse macroeconomic factors against the country.

quozl

Ireland's fixed-rate 10 year borrowings in the bond-market are at 9%.

I wonder how much AIB and BoI, who are forced to use the government's limited credibility to borrow, are getting their long term money for?

I don't see these new figures as all that much out of step with future reality.

Johnny Bitte

This might be a tactic by PTSB to keep their clients on variable but its scared the **** right out of me enough to grab my lenders fixed rate by the arm, leg and balls!!!

robd

Senna wrote: »

PTSB wanted to end fixed rates completely, but anyone on a fixed rate at the moment has a contract which states (ad-lib)"at the end of this fixed rate, you will move to the SVR or be offered another fixed rate". So they have to be able to offer something, of course they just picked a huge number so nobody will go for it, but they do have to have fixed rates available.

I also hate to say it, but 9.1% maybe a reality for many in the near future. An ECB rate of 5% could mean the banks would borrow at 10%+ (1% at moment and borrowing at 7%). With no intervention from the state, SVR could be in the teens. I hope to hell not.

I firmly believe that 8%+ is on the cards over the next 2-3 years. People aren't listening at the moment though. There's a huge amount of indignation about PTSB who people seem to conceive are acting unfairly or underhandedly. The commercial reality is they are losing money hand over fist and need to adjust rates accordingly. The other reality is inflation has started to rear it's ugly head so ECB will be forced to act.

astrofool

The ECB (Germany) is going to have to accept inflation as inevitable in order to reduce the debt burden. It's all just posturing at the moment before it all blows up, I'd expect the euro to weaken to (weak) dollar levels as they realise there's no easy way out, and that interest rates can't follow the German tune any more.

danbohan

omahaid wrote: »

The point of the 9.1% rate is so that people won't get their mortgages fixed

probably , and why would they want that ?, maybe in 5 years time 9.1% will seem attractive , 10 -12 years ago it was

Senna

astrofool wrote: »

The ECB (Germany) is going to have to accept inflation as inevitable in order to reduce the debt burden.

Germans and French are nations of savers, high inflation and low interest rates are terrible for them and unfortunately they dictate what happens over the whole Euro zone. Countries like Ireland, Spain and Greece aren't of large scale significance. If it wasn't for the fact we borrowed all the money from the Germans, the ECB would already have moved up (inflation is above the 2% target). Its much more likely they wont be as quick to raise it and will leave longer gaps between raises, but i cant seem them allowing us to dictate the ECB rate.

hinault wrote: »

I think if interest rates do climb to the level that you have referred to, it will mean kaput for this entire country.

I agree, if interest rates are in the teen, paying the mortgage will be the least of your worries.

Just done the maths, at 13% my monthly mortgage repayment will be the same as my own monthly take home pay, not counting all the tax rises and levies that will be introduced in the next 3 years. Its a laugh or cry situation just thinking about it.

deekme

Hi not really clued up atol about mortgages and interest rates but i am on a variable rate mortgage just now and its 4.8%
I have the option to fix this for 5 years at 5.5%, 7 years at 6.1% and the same for 10 years fixed..
luckily both my wife and i work and can afford any of the options just now..
We are not sure what one to choose because as you know PTSB has put there interest rates up there by 1% but we can still get these rates as we enquired about them before they officially made the interest change.
Reading what all youlotare writing i think i might go for the 10 fixed at 6.1

pat1981

deekme wrote: »

Hi not really clued up atol about mortgages and interest rates but i am on a variable rate mortgage just now and its 4.8%
I have the option to fix this for 5 years at 5.5%, 7 years at 6.1% and the same for 10 years fixed..
luckily both my wife and i work and can afford any of the options just now..
We are not sure what one to choose because as you know PTSB has put there interest rates up there by 1% but we can still get these rates as we enquired about them before they officially made the interest change.
Reading what all youlotare writing i think i might go for the 10 fixed at 6.1

Imo no one really knows where rates are going to be. Your variable rate is high so the fixed rates you have been offered on the face of it seem very good and you certainly need to act.10 years is a long time to fix and I would feel very uncomfortable doing so, circumstances might change and if you needed to sell or move there could be high penalty from your lender. The 5 year option would be my preferred option, hopefully by then the economy might have turned, banks may/will start lending again and there maybe better options to switch lender to avail of better rates. I cant tell you what rates will be in 5 years only speculators can and that is speculation.

nb83

I rang PTSB on the 3rd of Feb asking to fix my mortgage for 5 years and did not get the letter until the 8th of Feb and sent back on the 10th and now they are saying that they didnt receive my letter on time so they wont be fixing my rate. Would anyone know where I would stand with this?

hinault

nb83 wrote: »

I rang PTSB on the 3rd of Feb asking to fix my mortgage for 5 years and did not get the letter until the 8th of Feb and sent back on the 10th and now they are saying that they didnt receive my letter on time so they wont be fixing my rate. Would anyone know where I would stand with this?

http://www.financialombudsman.ie/

nb83

Thanks for that!

deekme

I sent my letter back to them recorded delivery so they couldnt pull the same stunt with me

nb83

it took them 5 days to send out the letter to me and they say that the rates are only valid for 7 days but it wasnt even possible for me to get it back that quickly to them, I rang on the 11th and asked if i could fax the photocopy of the letter just in case it didnt get there on time and was told there was a backlog so I just left it up to the post. There still looking into why I was told i couldnt fax it cause they were still excepting them last week. I just pray that it will work out for me.

deekme

i believe that they are valid for 7 days of you getting the letter not 7 days from when they posted it..
that would make no sense...what would happen if the letter took longer than 7 days to reach you..
just keep at them..thats what we did and hopefully they dont pull the same stunt with us..
when we called the branch the bank manager said that if they said we could avail of the lower rates before the rise over the phone then they HAD to give us them

helimachoptor

Been chatting to a lot of people i work with. Some with big mortgages. The majority say that if interest rates keep getting pushed up they are just going to head to Oz/Canada and post they keys back to the bank as they wont be able to afford it. We've had significant pay cuts and some families are one income families.

nb83

Ya, i rang open 24 on the 3rd of Feb and i was told it wouldnt cost anything to change and that they would send out the letter, its not my fault that it didnt come till the 8th! I sent it back then on the 10th and they are saying now it was over the 7 days! Still not going to let it go, i cant control the post. Waiting for them to ring back again but they are proving to be very difficult and cant find our calls even after i gave times and dates!

bmarley

Anyone know anything about "start mortgages" and whether they're still providing mortgages in Ireland?