Interest rates and banks

Don17

Why don't Irish banks have to pass on Interest rate cuts?

It seems to be that if the ECB increase rates there's a letter for you the next day about your increased mortage payment etc.
But if they drop rates they either don't pass it on or wait a few months.

I know " fair " is not a word banks are familiar with but does the financial regulator or the government not have any say in the matter.
The rest of society seems to be governed by strict laws ie. if this happens you must do this
With the banks it seems to be if this happens you can do this if it suits you but its up to you of course

Surely this type of self administration in a profit driven business can only lead to banking problems in the long term, oh wait it already has.......

Its as though the bank can have their cake and eat it throwing us a few crumbs whever they get too bloated.

.

Also one of the excuses the government gave in decreasing tax relief for 2nd time buyers was that the ECB would be cutting interest rates and so thus their cuts would be soaked up with dropped rates.

penexpers

Don17 wrote: »

Why don't Irish banks have to pass on Interest rate cuts?

It seems to be that if the ECB increase rates there's a letter for you the next day about your increased mortage payment etc.
But if they drop rates they either don't pass it on or wait a few months.

I know " fair " is not a word banks are familiar with but does the financial regulator or the government not have any say in the matter.
The rest of society seems to be governed by strict laws ie. if this happens you must do this
With the banks it seems to be if this happens you can do this if it suits you but its up to you of course

Surely this type of self administration in a profit driven business can only lead to banking problems in the long term, oh wait it already has.......

Its as though the bank can have their cake and eat it throwing us a few crumbs whever they get too bloated.

.

Also one of the excuses the government gave in decreasing tax relief for 2nd time buyers was that the ECB would be cutting interest rates and so thus their cuts would be soaked up with dropped rates.

When the ECB makes a rate change, it takes 7-10 days for it to be enforced. From then the bank has 30 days to pass this change on. It can decide to pass it on on that day or wait the full 30 days. In the case of increases they usually pass them on asap, but wait the full 30 days for decreases. It's not a great practice but there's not much we can do about it.

MOH

Just switch to another provider, and tell them why you're doing so.

ytpe2r5bxkn0c1

I don't know who you're with and wthout going into specifics - many providers passed on the last decrease almost immediately. You mustn't listen to the news!

penexpers

Jason Gifted Tenure wrote: »

I don't know who you're with and wthout going into specifics - many providers passed on the last decrease almost immediately. You mustn't listen to the news!

No they didn't. Most of them didn't pass the rate cut on until the first week in November.

jor el

It also depends on the mortgage you have, and what it's terms and conditions are. A tracker, tracks the ECB rate, where as a variable one may not. Also, the difference between the ECB and tracker rate should be detailed in your mortgage terms, and could be any amount.

I know my sister was recently looking at her mortgage, and it states that the interest rate will not exceed 0.6% above the ECB rate, she's currently at 1.5% above it, as they hadn't passed on the last two interest rate reductions. The bank, in this case, are in breech of the agreement, and she's currently contacting them about it.

In short, check your own terms, as your rate may have a large range above the ECB, and as such they might not have to pass on the reduction if you are still within this range.

If you're not on a tracker, I think you're pretty much screwed.

dotsman

Don17 wrote: »

Why don't Irish banks have to pass on Interest rate cuts?

It seems to be that if the ECB increase rates there's a letter for you the next day about your increased mortage payment etc.
But if they drop rates they either don't pass it on or wait a few months.

I know " fair " is not a word banks are familiar with but does the financial regulator or the government not have any say in the matter.
The rest of society seems to be governed by strict laws ie. if this happens you must do this
With the banks it seems to be if this happens you can do this if it suits you but its up to you of course

Surely this type of self administration in a profit driven business can only lead to banking problems in the long term, oh wait it already has.......

Its as though the bank can have their cake and eat it throwing us a few crumbs whever they get too bloated.

.

Also one of the excuses the government gave in decreasing tax relief for 2nd time buyers was that the ECB would be cutting interest rates and so thus their cuts would be soaked up with dropped rates.

Whole thread about this here. Fact is the banks are passing it on to all trackers (they have to). Most banks are passing it on to Variable customers as well (which they don't have to). Some banks are a lot faster than others!

P.C.

Don17 wrote: »

Its as though the bank can have their cake and eat it throwing us a few crumbs whever they get too bloated.

I assume that you meant to say 'the banks can eat their cake and have it'

Sorry to go off topic.