Permanent TSB extortionate rate on SVR

Kev. · 17-02-2012 2:25pm #1

Permanent TSB are charging a disgraceful 5.2% on Standard Variable Rate mortgages,

AIB are charging around 3%- These two banks are state owned.

This rate is the highest in Europe as far as I know...

Disgraceful behaviour from PTSB,The Central Bank and the fine Minister Noonan.

I fed figures into http://www.loanclc.com/ and came up with the following...
A person with a E 300.000 mortgage over 25 years will be paying.....
PTSB - E1,788.90
AIB - E1,422.63

A difference of around E360 a Month. Just because they are with a different bank.......This isnt the real figure though because a person with an AIB Mortgage pays off more capital each month so all in all it works out at around E500 a month over the lifetime

Over their mortgages a PTSB customer will pay around E110,000 more that an AIB customer for the EXACT same loan.

A person who is with PTSB cannot move mortgage because no banks are accepting switchers...they are stuck

Any opinions/thoughts?

How is our economy meant to recover when people are paying these rates to banks...
20,000 people are on SVR with PTSB and another 20,000 are coming into it when their fixed rate expires...

AlekSmart · 17-02-2012 2:33pm

Kev. wrote: »

Permanent TSB are charging a disgraceful 5.2% on Standard Variable Rate mortgages,

AIB are charging around 3%- These two banks are state owned.

This rate is the highest in Europe as far as I know...

Disgraceful behaviour from PTSB,The Central Bank and the fine Minister Noonan.

Any opinions/thoughts?

How is our economy meant to recover when people are paying these rates to banks...
20,000 people are on SVR with PTSB and another 20,000 are coming into it when their fixed rate expires...

Good point,as a long-time mortgage and shareholder (:o) of PTSB I am quite concerned at the,by now,regular notices of adjustment I recieve for my monthly contribution to Gill's sunglases budget.

I continue to hold my 300 shares in full expectation of a reversal of fortune....soon....:P

highgiant1985 · 17-02-2012 2:48pm

you might like to read this forum on askaboutmoney so :P Lots of info on the PTSB SVR

http://www.askaboutmoney.com/forumdisplay.php?f=113

I'm not a huge fan of the site as I think politics/boards is better but still worth a read.

Sponge Bob · 17-02-2012 5:43pm

Kev. wrote: »

P
Any opinions/thoughts?

Yeah, €300k mortgage are old hat. They will generally be anywhere from €50k to €150k in future.

Godge · 17-02-2012 6:19pm

Did nobody ever listen to or read the bit in the advertisements where it said that mortgage rates could go up or down? It was always in the small print as well and if you were ever going to read the small print, it should have been for the biggest loan you were ever going to take out.

Why are people surprised that

(1) Mortgage rates actually did go up
(2) Banks need to make money and if, like any business, they have a customer they can make money from, they will.

the groutch · 18-02-2012 1:07am

they've gotten a very tracker-heavy loan book, so they need to charge a much higher rate to cover just to achieve an overall interest rate similar to other banks

AlekSmart · 18-02-2012 1:12am

What's a tracker mortgage....?

Do we have any idea of why exactly PTSB is so Tracker Heavy as opposed to the rest of our exotic bunch of Bankers ?

jased10s · 18-02-2012 3:45am

promised not to come back to this sad place but hey.

godge
"Did nobody ever listen to or read the bit in the advertisements where it said that mortgage rates could go up or down? It was always in the small print as well and if you were ever going to read the small print, it should have been for the biggest loan you were ever going to take out.

Why are people surprised that"

(1) Mortgage rates actually did go up
(2) Banks need to make money and if, like any business, they have a customer they can make money from, they will. "

apparantly the bond holders take a gamble and dont lose, the banks give loans and get others pay for it's losses on trackers.

surprised Godge , we are not surprised we are being screwed.

Thanks for the backup mate.

It was a home after all and not off the plans making a quick buck.

PTSB have the highst interest in the EU.

But hey money we spend on the interest we cant spend in shops.

take into account the USC ( 3000 last year ) and health levy ( paid 400 this year ) insurance levy ( 100 this year ) just for myself ( could add more but dont have figures at hand ).

and levy levy levy.

And also my partner paid more levies

It was a home after all and a modest one at that.

Up or down of a rate we can handel but sheer rape is a bit much ( a bank we own apparantly !! )

So if the banks are in a bind and charge me more, then can i go to my employer and demand more to cover the loss ?

We only want a fair deal , but sympanthy is far from coming, not that i expecet it in this ****ed country.

hope you dont need help Godge , because you attitude is typical of this country , look after your own hole.

Also my partner paid more than me in the above because she earns more then me , so in total we are very highly levied ( x above by 2 and add some ).

No burden to the state and no kids and claims but still paying ..

Quote
(2) Banks need to make money and if, like any business, they have a customer they can make money from, they will "

Where do i make my money from ????

Kev. · 18-02-2012 8:47am

Godge wrote: »

Did nobody ever listen to or read the bit in the advertisements where it said that mortgage rates could go up or down? It was always in the small print as well and if you were ever going to read the small print, it should have been for the biggest loan you were ever going to take out.

Why are people surprised that

(1) Mortgage rates actually did go up
(2) Banks need to make money and if, like any business, they have a customer they can make money from, they will.

I think you've missed the point totally Godge

Yes Variable rates can go up or down,but for one state owned bank(PTSB) to charge 5.2% and another 3%(AIB) is disgraceful.....
A difference of 500 Euro a month to some people...

Yes banks need to make money but to overcharge customers to a point where they get into trouble on Mortgage payments is sickening.

Nody · 18-02-2012 10:23am

Kev. wrote: »

I think you've missed the point totally Godge

Yes Variable rates can go up or down,but for one state owned bank(PTSB) to charge 5.2% and another 3%(AIB) is disgraceful.....
A difference of 500 Euro a month to some people...

Yes banks need to make money but to overcharge customers to a point where they get into trouble on Mortgage payments is sickening.

I agree, AIB should charge 5.2% as well as that's closer to reality and the home owners should pay their own bill instead of asking for everyone else to chip in to pay for their sacred home...

Oh and for the rates being highest in Europe? Not by a long shot; Halifax for example starts their variable rate at 5.29%

jased10s · 18-02-2012 12:35pm

Nody wrote: »

I agree, AIB should charge 5.2% as well as that's closer to reality and the home owners should pay their own bill instead of asking for everyone else to chip in to pay for their sacred home...

Oh and for the rates being highest in Europe? Not by a long shot; Halifax for example starts their variable rate at 5.29%

Ok so if they all started charging the above rate and make a profit , does the tax payer and owner get a share of the said profit ? As we own the banks apparantly.

I think not.

And nody you know nothing.

No one is asking for a bill pay , Hold on we paid a non losing gamble to the bankers..

jased10s · 18-02-2012 12:44pm

the groutch wrote: »

they've gotten a very tracker-heavy loan book, so they need to charge a much higher rate to cover just to achieve an overall interest rate similar to other banks

so do i go to my employer and ask for more wages because i have to pay out more ?

The extra 400 + a month difference means we would spend in the shops that would stimulate the ecomony.. but hey let the banks have it.

Kev. · 18-02-2012 1:05pm

Nody wrote: »

I agree, AIB should charge 5.2% as well as that's closer to reality and the home owners should pay their own bill instead of asking for everyone else to chip in to pay for their sacred home...

Nody,

I have never in my life asked anybody to pay my bill or pick up my tab for my house,that accusation doesn't sit well with me and is a bit disrespectful..

I pay my mortgage every month on time and in full,but my issue is that I will end up paying around 140,000 euro more than somebody who is with AIB..

Yes Nody thats 140,000 Euro in real money

These banks are owned by the state and the government wont do anything to rectify the problem.

If it means the 2 banks charge 5.25%,then so be it...Id have no problem with it

But to charge 2% more is unfair and scandalous...

Charlie Weston has a good article on the problem at hand in todays Indo

http://www.independent.ie/national-news/central-bank-puts-pressure-on-ptsb-to-cut-variable-rates-3023880.html

AlekSmart · 18-02-2012 1:41pm

Nody wrote: »

I agree, AIB should charge 5.2% as well as that's closer to reality and the home owners should pay their own bill instead of asking for everyone else to chip in to pay for their sacred home...

Oh and for the rates being highest in Europe? Not by a long shot; Halifax for example starts their variable rate at 5.29%

I see and accept Nody's point re the "Sacredness" of the place of your own in Irish mainstream culture.

I remain totally unconvinced that the eventual ownership of my humble 3 bed semi in South Dublin will have been worth the added burden which meeting 30 years of PTSB's commercial requirements levied upon me.

I have little doubt but that if I had been able to secure a European model of secure tenancy with lower rental amounts,regulated tenancy agreements and a generally more civilized attitude,I would have politely sent the PTSB agent on her way to sucker some other gilly into their honeypot.

However,this being modern Ireland,we had a somewhat different perception and attitude toward life and living it.

This allowed successive Irish Governments to TOTALLY ignore what was/is the norm in how regular Europeans live their quite productive,regulated and largely functional lives.

What we now have in Éirinn is a generation of young(ish) people whose ability to live a similarly functional,productive life is frustrated by gigantic levels of personal debt,mostly (although not totally) centred upon resedential property.

Yet,even today,we maintain the pretence that universal property ownership is achievable,without even pausing to ask ourselves if,in the Irish context,it is either sustainable or desirable.

The current debate appears to revolve around when exactly,we will see buyers returning to the market...rather than the State perhaps asking if this phenomena is really what the Country needs.

I believe that the Irish State needs to actively engage with promoting,encouraging and,perhaps,directly providing the type of Long Term Secure Rental Market which contributed in no small way to Europes achievement in putting two World Wars behind it and getting on with the business of living.

LostinKildare · 18-02-2012 2:14pm

Nody wrote: »

Oh and for the rates being highest in Europe? Not by a long shot; Halifax for example starts their variable rate at 5.29%

That's not their variable rate -- that's a TRACKER rate for new business first-time buyers with less than 25% deposit down. Their way of telling you that they're not interested in giving you a tracker mortgage (as opposed to PTSB's ceasing to offer any tracker rate).

Halifax's variable rate -- it's listed on the same table you linked to -- is 3.99%, a great deal below PTSB's 5.19%.

Compare like with like.

Nody · 18-02-2012 2:21pm

jased10s wrote: »

The extra 400 + a month difference means we would spend in the shops that would stimulate the ecomony.. but hey let the banks have it.

Good idea, lets ask the government to give everyone 1k extra a month to spend; that will fix the economy! Oh wait, they are already doing that...

Let me try to put this in simple terms, banks loan cost equals X (this X has to include the cost to loan on the market and not some quasi state version of it like it is today, cost for defaults on their loan book, cost for unsecure loans, returning the bloody money pumped into them which I personally disagreed with then and now, salaries, overheads etc.). If the banks offers loans below X the bank loses money, money which it has to recover from either it's owners (the tax payers, i.e. my original point about asking for tax payers to foot your loan bill) or increasing the money it makes from the loans to exceed X. Now do I believe 3% can cover X, esp. with an Irish bank? Not by a long shot; ergo, AIBs rate is to low and if you think 3% is somehow normal then you're far off from reality.

Head The Wall · 18-02-2012 2:23pm

jased10s wrote: »

Ok so if they all started charging the above rate and make a profit , does the tax payer and owner get a share of the said profit ? As we own the banks apparantly.

I think not.

And nody you know nothing.

No one is asking for a bill pay , Hold on we paid a non losing gamble to the bankers..

Theoretically all tax payers own the banks but not all taxpayers are mortgage holders. I was not one of the cabal that drove prices higher and higher by providing demand for said "roof over my head" and causing the massive debt problem. Yes the govt is already providing support via the bank bailout etc but this should be limited as much as possible. I would much prefer mortgage customers paid up here instead of non mortgage holders.

AlekSmart · 18-02-2012 2:32pm

Head The Wall wrote: »

Theoretically all tax payers own the banks but not all taxpayers are mortgage holders. I was not one of the cabal that drove prices higher and higher by providing demand for said "roof over my head" and causing the massive debt problem. Yes the govt is already providing support via the bank bailout etc but this should be limited as much as possible. I would much prefer mortgage customers paid up here instead of non mortgage holders.

As a fully mortgaged customer myself I'd support HTW's pov here.

However,we have only reached this place by virtue of successive Irish Governments behaving in a wantonly unrelastic manner.

This Policy,driven by highly questionable politico/business interaction between administrators,developers and sadly,a misinformed deluded public,of which I am one,led Ireland to the brink,from which in late 2008,we were all thrown off.

HTW's "cabal" was more than that,it was all encompassing and deeply rooted in Irish life and sadly for Ireland,like a rotten impacted wisdom tooth,it will require removal,with or without anesthetic :eek:

Godge · 18-02-2012 6:19pm

jased10s wrote: »

hope you dont need help Godge , because you attitude is typical of this country , look after your own hole.

Also my partner paid more than me in the above because she earns more then me , so in total we are very highly levied ( x above by 2 and add some ).

No burden to the state and no kids and claims but still paying ..

http://www.independent.ie/national-news/banks-tell-thousands-in-trouble-cut-health-cover-3023872.html

Look at that article. People in trouble are refusing to give up their private schools, their health insurance, their food shopping in M&S and their Sky Sports. Some of us never had those but we are the ones not in trouble. It is hard to feel sympathy when you read articles like that when I know people struggling who live in rental accommodation and never had those luxuries. I know who I have sympathy for and it is not people who are on their way to owning an asset like a house, it is for those who have never had the chance to own their own house and who likely never will.

murphaph · 19-02-2012 1:03am

Godge wrote: »

http://www.independent.ie/national-news/banks-tell-thousands-in-trouble-cut-health-cover-3023872.html

Christ almighty is all I can say. If banks weren't insisting on people ditching sky sports and private schools I'd be pretty annoyed. Where on earth do some people get their sense of entitlement?

Sponge Bob · 19-02-2012 1:27am

South Dublin is, ummmm, different!

jased10s · 19-02-2012 2:50am

Godge wrote: »

http://www.independent.ie/national-news/banks-tell-thousands-in-trouble-cut-health-cover-3023872.html

Look at that article. People in trouble are refusing to give up their private schools, their health insurance, their food shopping in M&S and their Sky Sports. Some of us never had those but we are the ones not in trouble. It is hard to feel sympathy when you read articles like that when I know people struggling who live in rental accommodation and never had those luxuries. I know who I have sympathy for and it is not people who are on their way to owning an asset like a house, it is for those who have never had the chance to own their own house and who likely never will.

no private school here ( i posted before no kids ) and no m&s ( aldi here ) and my rent was the same as morgage when i took it out ( despite ptsb best efforts to quash that ). You seem to dislike people who aspire to actually owning than renting a small abode. My house is managable and not big and i prefer to no piss my money in rent. This is about interest rates.
Oh and my employer payes my insurance, the dole people get a medical card which i do not , so i pay €60 a doctors visit ( not that i can i just ignore medical issues )

It's quite amazing you wake up 1 year to be told 7 % of your wages go in USC and also the bank wants extra to cover their trackers.
i wish i could go to my employer and say give me 10k more because the banks think i have that to spare.

Head The Wall · 19-02-2012 9:55am

jased10s wrote: »

It's quite amazing you wake up 1 year to be told 7 % of your wages go in USC.

That would be quite amazing indeed, if it was true. Its not though, it's 7% after 16k.

I think the point Godge is trying to get across is that a lot of people are realising that they can't afford to own a house but they don't want to accept that fact. The wage levels during the temporary boom fooled a lot of people into thinking the opposite unfortunately.

Sarn · 19-02-2012 11:55am

jased10s wrote: »

i prefer to no piss my money in rent. This is about interest rates.

Unfortunately, instead of "pissing" your money on a provided service that you could change according to your means, you chose to spend it on an interest charge that you have no control over.

I agree with you in that the discrepancy in SVR between state owned banks is wrong. As Nody pointed out, the problem is that it is the low AIB rate that is incorrect. One possible solution could be to normalise out the SVR between the various State owned banks over a period of time, although I'm not sure if the government could interfere in that way. This would spread the pain between a portion of mortgage holders. The downside is that this would create an uproar from those with an AIB SVR.

ArmaniJeanss · 19-02-2012 1:28pm

Kev. wrote: »

Permanent TSB are charging a disgraceful 5.2% on Standard Variable Rate mortgages,

This rate is the highest in Europe as far as I know...

Have you any proof of this? (not accusing you of lying, would be genuinely interested in the data).

Rightly or wrongly I've always had the belief that Irish mortgage rates are low and that 5% plus is fairly standard in central europe.

Very hard to find any actual comparison data though.

3DataModem · 19-02-2012 2:58pm

Irish interest rates are unbelievable low and have been so for 10 years. The idea that 5% is somehow "extortionate" in it's own right is just wrong.

Secondly, the cost to the bank of the capital
Is way over 5.2% (as they are government backed). In any other era they would have jacked the rate up to 8/9/10 but they are being held back from doing this as they (i.e. the government) don't want mass defaults.

It may be unfair that one bank is cheaper than another... I don't disagree with this... but back in the 70s, 80s and 90s people used to dream about single-digit rates.

AlekSmart · 19-02-2012 3:10pm

jased10s wrote: »

. You seem to dislike people who aspire to actually owning than renting a small abode. My house is managable and not big and I prefer to not piss my money in rent. This is about interest rates.

This is,for me,the epitome of the "Irish Attitude" to the entire property scenario..."if it's built,ye have to own it" .

However,what is now becoming apparent,is that universal property ownership will bring with it, accompanying universal property ownership responsibilities,mainly,but not totally, financial.

It is only the slowly dawning realization that property one purchases today,will bring with it a continuing and increasing level of contributions and charges which eventually will motivate the property owning mases to perhaps reconsider their fixation.

The concurrent Irish problem,and it is a very real one,is that our Governments have,as yet,exhibited no great understanding of the benefits of promoting a sound,well administered and regulated Private Rental market......Why ?

Godge · 19-02-2012 5:33pm

jased10s wrote: »

no private school here ( i posted before no kids ) and no m&s ( aldi here ) and my rent was the same as morgage when i took it out ( despite ptsb best efforts to quash that ). You seem to dislike people who aspire to actually owning than renting a small abode. My house is managable and not big and i prefer to no piss my money in rent. This is about interest rates.
Oh and my employer payes my insurance, the dole people get a medical card which i do not , so i pay €60 a doctors visit ( not that i can i just ignore medical issues )

It's quite amazing you wake up 1 year to be told 7 % of your wages go in USC and also the bank wants extra to cover their trackers.
i wish i could go to my employer and say give me 10k more because the banks think i have that to spare.

(1) I have a mortgage myself and am buying a house so I don't hate myself. I feel privileged to be in the position that I can afford to buy my own property when so many in Ireland and elsewhere can only dream of that.
(2) It is not amazing to wake up one year to be told interest rates and taxes are going up. Anyone with half a grip on reality and a little bit of research knew that interest rates and the tax burden were at historical lows by the middle of the noughties so the only way was up.

Icepick · 19-02-2012 6:42pm

jased10s wrote: »

My house is managable and not big and i prefer to no piss my money in rent.

Why would you be pissing money in rent?

thebman · 19-02-2012 9:23pm

AlekSmart wrote: »

The concurrent Irish problem,and it is a very real one,is that our Governments have,as yet,exhibited no great understanding of the benefits of promoting a sound,well administered and regulated Private Rental market......Why ?

Most of our politicians push the renting is dead money agenda (or the need to help first time buyers) and the the mantra that we must do everything in our power to re-inflate the property bubble (or in their words, restore a healthy property market) and on an unrelated note are also heavily invested in property themselves so no conflict of interest here

LostinKildare · 20-02-2012 12:17am

Nody wrote: »

Let me try to put this in simple terms, banks loan cost equals X . . .Now do I believe 3% can cover X, esp. with an Irish bank? Not by a long shot; ergo, AIBs rate is to low and if you think 3% is somehow normal then you're far off from reality.

3DataModem wrote: »

Secondly, the cost to the bank of the capital is wayover 5.2% (as they are government backed).

Hmm, the Central Bank disagrees with you.

Now the Central Bank has admitted it is applying pressure on lenders charging higher interest rates. Regulators did not name Permanent TSB but said in a statement yesterday: "We are engaging with specific lenders who appear to have standard variable rates set disproportionately high compared with the cost of funds through our existing powers of suasion."
http://www.independent.ie/national-news/central-bank-puts-pressure-on-ptsb-to-cut-variable-rates-3023880.html

In November the CB published a report titled "Variable Mortgage Rate Pricing in Ireland" in which it estimated the funding costs across Irish banks to be 2.6%.
5.2 - 2.6 = 2.6% That's a damn good margin PTSB is making on SVR loans, way out of whack with the 1.4 percentage-point mark-up over funding costs which has been standard across Irish banks.
The report found that:

Changes in the rate of mortgage arrears also drive changes in variable rates, controlling for funding costs.
It appears that some lenders are charging higher variables rates to compensate for the losses they are making on their tracker loans. . . .
One bank's (A) variable rates are significantly lower and another bank's (F) variable rates are significantly higher than its peers, controlling for funding costs, arrears rates and other factors.
http://www.centralbank.ie/press-area/press-releases/Documents/Variable Rates-final2.pdf

PTSB is gouging captive SVR customers to pay for the bank's losses on other people's loans.

And I do mean gouging. In the aftermath of a natural disaster like a flood or earthquake, govts step in to prevent businesses from price gouging when the competitive economy collapses. Well, we've have an economic disaster; free-market competition has pretty much collapsed, since transferring your mortgage to another bank is impossible for almost everyone (negative equity, loss of income). Yet the state is leaving citizens to the mercy of a state-owned bank.

Head The Wall wrote: »

Theoretically all tax payers own the banks but not all taxpayers are mortgage holders. I was not one of the cabal that drove prices higher and higher by providing demand for said "roof over my head" and causing the massive debt problem. Yes the govt is already providing support via the bank bailout etc but this should be limited as much as possible. I would much prefer mortgage customers paid up here instead of non mortgage holders.

I see we've moved on a bit from "we all partied." Now, anyone in Ireland who holds a mortgage is part of the "cabal" that ruined the country.

C'mon, let's not demonise anyone who bought a house in the last 20 years. Indeed, 70% of mortgages that originated before 2001 are variable rate loans. These are the people that have been trapped by PTSB into carrying the can for the bank's tracker mortgages/bad loans from the late Celtic Tiger --- reckless loans that did fuel the boom/bust.

It's disgraceful that these people are forced to pay so much more than other Irish citizens --- hundreds of euros more every month --- to prop up a state-owned bank.

Permanent TSB extortionate rate on SVR

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