Interest rates historic

tendjose

Hi,

At the moment I'm shopping prices for a mortgage with some banks.

The ones with best rates are EBS (3.5%) and AIB (3.55%). I'm going for all variable along all the mortgage.

AIB claims that although their rate is higher they offer free banking in the value of 60euro per quarter and that they maintain the lowest rates among the years.

I would need proof of that.

Anyone has an idea where can I find an interest rates table by month over the last 10 years for these 2 banks?

Thanks

JTMan

AIB claims that although their rate is higher they offer free banking in the value of 60euro per quarter and that they maintain the lowest rates among the years.

Rubbish when you can get free banking elsewhere.

Valetta

I would have thought what they claim to have done in the past is irrelevant.

Focus on the current offerings.

I would also check out fixed rates for the first few years. It will give you certainty while you get the house up and running.

The US have just increased their rates, albeit by a small amount, and in my opinion European rates will start to creep up in the next few years, as economies start to recover.

JTMan

Valetta wrote: »

Focus on the current offerings.

Yeah.

Valetta wrote: »

I would also check out fixed rates for the first few years. It will give you certainty while you get the house up and running.

Do not fix. Rates are on a downward trend. Fix once rates hit the bottom. Irish mortgage rates have not hit the bottom in my opinion. Competition will force rates lower. Irish mortgage rates are still circa. 1.6% above Eurozone averages. They have further to drop.

Valetta wrote: »

The US have just increased their rates, albeit by a small amount, and in my opinion European rates will start to creep up in the next few years, as economies start to recover.

Futures markets point towards no ECB increase for many years to come.

Senna

JTMan wrote: »

Fix once rates hit the bottom. Irish mortgage rates have not hit the bottom in my opinion. Competition will force rates lower.

When would you think they will hit bottom, or at what percentage?
Easy to make assumptions on the way down, harder to call the bottom.

murphaph

Irish rates will very sensibly remain above German and Dutch rates so long as repossession is any way difficult for the banks. People can't have it both ways with cheap rates like in Germany but hard for the bank to get their security in case of default.

JTMan

When would you think they will hit bottom, or at what percentage?
Easy to make assumptions on the way down, harder to call the bottom.

When more competition arrives. Which according to Karl Detter, is going to happen.

Irish banks are screwing variable rate mortgage holders. Irish banks cost of funding is now below 1% and mortgage rates are, on average, around 4%.

New entrants, either local or pan-European offerings, will arrive to take advantage of the price gouging by Irish banks. There are juicy margins to be made by a new entrant even when they undercut the existing rates.

murphaph wrote: »

Irish rates will very sensibly remain above German and Dutch rates so long as repossession is any way difficult for the banks. People can't have it both ways with cheap rates like in Germany but hard for the bank to get their security in case of default.

Different repossession rules explain some of the differential between the Eurozone mortgage rate averages. However, it does not explain the full picture.

Deposit rates have been on a fast downward track for some time. Cost of funding is dropping for Irish banks but it is not being matched by lower mortgage rates. Irish banks are profiteering due to lack of competition.

Also, nearly all arrears was caused by lending in the LTV 80%+ bracket. Now that there is far less lending in the LTV 80%+ bracket, and a much more sensible LTI ratio, the amount of arrears will be significantly lower with new lending.

Senna

JTMan wrote: »

When more competition arrives. Which according to Karl Detter, is going to happen.

KD has been banging on about new entrants for a long time, I don't see it happening, banks are pulling out not arriving.

Simple fact is the Irish mortgage market is tiny, a new entrant isn't going to have access to large scale new business as there simply isn't a functioning property market in Ireland.
So they will be relying on switchers and nearly 50% of the existing market is already on trackers, so none of them are switching.

So a market of 50% of existing business is their starting point. How many of that 50% would be small ending life mortgages, in arrears, have history of arrears, long term fixed or simple no interest in switching, I'm guessing a nice chunk of it. What bank will see this as attractive, come to Ireland and set up a bank for a geographically spread market about the size of Liverpool.

Of course, if a new entrant came in and undercut SVRs by 1-1.5% the existing banks could just cave to pressure and cut their rates, meaning the new entrant has been of huge benefit to the Irish people but the bank would be pulling as quick as it arrived.

tendjose

I'm not economist but because the rate is higher for fixed 3 years, I think that going for all variable or 3 years fixed will end up the same.

I base my instinct in the fact that Euribor is now negative as never before, so it has to go up.

Also so far I went to meetings in the banks and they offer me exacltly the same rates as in this site: http://www.bonkers.ie/compare-mortgages/

A friend of mine said I could get less, I wonder how? Will they lower the rates when I say "I found better in the bank X"?

tendjose

Also when the bank will look for defects in the house and evaluate it, can I trust the bank, or should I hire my own evaluator to be in peace of mind that the house has no "hidden" defects?

JTMan

Senna wrote: »

KD has been banging on about new entrants for a long time, I don't see it happening, banks are pulling out not arriving.

Simple fact is the Irish mortgage market is tiny, a new entrant isn't going to have access to large scale new business as there simply isn't a functioning property market in Ireland.
So they will be relying on switchers and nearly 50% of the existing market is already on trackers, so none of them are switching.

So a market of 50% of existing business is their starting point. How many of that 50% would be small ending life mortgages, in arrears, have history of arrears, long term fixed or simple no interest in switching, I'm guessing a nice chunk of it. What bank will see this as attractive, come to Ireland and set up a bank for a geographically spread market about the size of Liverpool.

Of course, if a new entrant came in and undercut SVRs by 1-1.5% the existing banks could just cave to pressure and cut their rates, meaning the new entrant has been of huge benefit to the Irish people but the bank would be pulling as quick as it arrived.

Tracker mortgages are 40% of outstanding mortgages.

A new entrant can target new as well as existing business. They do not need massive scale if they do the offering remotely online-app-only, with no branches, from another country, like Number 26. Costs can be kept low and risk kept low with low LTV and LTI targeting.

Price matching, by existing providers, will not occur, when a new entrant arrives. It may cause some price lowering but not price matching.

I don't see it happening

Is see it happening. The margins are too juicy for it not to happen.

I base my instinct in the fact that Euribor is now negative as never before, so it has to go up.

Euribor is not the right barometer. Firstly, Irish banks do not borrow at Euribor. Irish banks get most funding from deposits, not interbank loans, deposit rates are on a downward trend and have been from some time.

Senna

tendjose wrote: »

Also when the bank will look for defects in the house and evaluate it, can I trust the bank, or should I hire my own evaluator to be in peace of mind that the house has no "hidden" defects?

The bank will only do a cost valuation, that's someone going out to make sure the house is where it should be, that it's the size it should be, number of bedrooms etc and make sure you are not paying €1 million for a 150k house. It's only a valuation, they do not check anything else.
You have to hire your own surveyor to check for build problems.

Senna

JTMan wrote: »

Is see it happening. The margins are too juicy for it not to happen.

Rates have fallen, the rates were "juicer" in the past, why didn't they enter the market then? If they slash rates, then how will the new bank benefit from juicy rates, they'll be setting up in a small market to make non-juicy rates. Why would a new entrant come to a small market where margins are +3% and settle for 1-2%, most likely they'll just take what they can get away with, the same as every other bank.

I would love to see new entrants, I'm a mortgage holder that would benefit from competition, but I just don't see it effecting the market like you or KD claim.
I'll go back to my first point, banks are pulling out not moving in. Yes some net banking will attempt to break into the market, but those and a mortgage provider are a lot different.

JTMan

Senna wrote: »

banks are pulling out not moving in.

In the last 12 months, I am struggling to think of one exit.

In terms of entrants and ramped up offerings, we have had ... Number26, Revolut, Monese, new FX online offerings, new online brokers, new P2P offerings, ramped up PTSB mortgage offering, ramped up Ulster Bank mortgage offering and new KBC mortgage offerings to mention a few. Apple Pay, Android Pay and other NFC offerings are clearly coming soon.

The banking market is becoming more pan-European, more online, more app based, more global and more competitive.

Senna wrote: »

Rates have fallen, the rates were "juicer" in the past, why didn't they enter the market then? If they slash rates, then how will the new bank benefit from juicy rates, they'll be setting up in a small market to make non-juicy rates. Why would a new entrant come to a small market where margins are +3% and settle for 1-2%, most likely they'll just take what they can get away with, the same as every other bank.

Why now?
(1) SEPA. Makes it easier to do Pan-European offerings.
(2) Smartphone proliferation makes FinTech offerings more workable now. Remote, near automated, outside Ireland, with no expensive branches.
(3) Deposit rates are cheaper making mortgage margins greater.
(4) Money market rates are lower, making mortgage funding more attractive as a way to get yield for investors.
(5) New EU legislation is encouraging pan-European offerings.

Senna

So existing banks are starting to think about lending again, a few net transaction offering daily banking, all well and good but other than speculation, who is thinking of competing in the Irish mortgage market?

Earlier i gave the reasons I believe the market won't see new entrants, especially those that are going to slash rates or offer any real competition, your points are very valid, but applicable to more countries than Ireland, and more desirable countries than Ireland too.

We'd be far more likely to see an existing bank undercut the market, but I'm unfamiliar, financing, state ownership etc might hamper that.

JTMan

Senna wrote: »

So existing banks are starting to think about lending again, a few net transaction offering daily banking, all well and good but other than speculation, who is thinking of competing in the Irish mortgage market?

(1) Dilosk. (As per their website and as per media reports).
(2) Investec. (As per media reports)
(3) Number26 certainly want CBI authorisation to give credit. Whether that is overdrafts only or something more, time will tell.
(4) The way Karl Detter, and others talk, there are certainly others in the wings.

murphaph

JTMan wrote: »

In the last 12 months, I am struggling to think of one exit.

In terms of entrants and ramped up offerings, we have had ... Number26, Revolut, Monese, new FX online offerings, new online brokers, new P2P offerings, ramped up PTSB mortgage offering, ramped up Ulster Bank mortgage offering and new KBC mortgage offerings to mention a few. Apple Pay, Android Pay and other NFC offerings are clearly coming soon.

All good things but mortgage lending is really different because of the way legislation varies across borders. To mortgage lend in Ireland you need an Irish legal department to handle the ugly side. It's a small market to set that up for.

JTMan wrote: »

The banking market is becoming more pan-European, more online, more app based, more global and more competitive.

Current accounts are becoming more pan European but even savings accounts remain rigidly bound by national borders IMO. I don't know any Germans who would put their money in an Irish deposit account despite double the interest rates being paid.

JTMan wrote: »

Why now?
(1) SEPA. Makes it easier to do Pan-European offerings.
(2) Smartphone proliferation makes FinTech offerings more workable now. Remote, near automated, outside Ireland, with no expensive branches.
(3) Deposit rates are cheaper making mortgage margins greater.
(4) Money market rates are lower, making mortgage funding more attractive as a way to get yield for investors.
(5) New EU legislation is encouraging pan-European offerings.

German mortgage money doesn't come from deposits. It comes from pension funds who will take the terribly poor returns as it is seen as carrying almost no risk and they are investing for the long haul. Irish mortgages are risky. These pension funds are not looking to invest in Irish mortgage lending. We're fixed at 1.45% for 17 years on our new mortgage here. I don't see rates like that in Ireland ever to be honest. We just don't have the stable economy to underpin them. Remember when Ireland joined the EEC that cheaper car insurance and no import duty on cars was a selling point?!