pTSB interest rate hike

fcdub

Has anyone else had enough of all these hikes from PTSB :mad:? Its gone beyond a joke.

Iago

why?

fcdub

another 1% coming down the line for all variable mortgage holders is the talk on the radio today. So if you have a 300K mortgage thats an extra 200 quid a month!

Speak Now

Thats a big increase if true :mad:


When ECB rates starts rising do the bank add it to the variable immediately or just the tracker?

fcdub

I honestly dont know!!! I can only hope tracker only, but I doubt it!

Iago

I saw that, but what I don't get is why you or anyone else thinks it's beyond a joke?

Speak Now

Iago wrote: »

I saw that, but what I don't get is why you or anyone else thinks it's beyond a joke?

I wish it was a joke

bryaner

Jerry Seinfeld wrote: »

Thats a big increase if true :mad:


When ECB rates starts rising do the bank add it to the variable immediately or just the tracker?

Variable and trackers will get hit when the ECB put up their rates..:(

fcdub

Im not speaking literally. What I mean is that it is a really really serious situation for people and that PTSB know this and they know people will lose there homes if they keep pushing up rates, even though the ECB isnt rising. I know they dont borrow at the ECB ate etc etc.

Iago

fcdub wrote: »

Im not speaking literally. What I mean is that it is a really really serious situation for people and that PTSB know this and they know people will lose there homes if they keep pushing up rates, even though the ECB isnt rising. I know they dont borrow at the ECB ate etc etc.

Everything apart from the bold in this discussion is irrelevant.

If you're running a business and you are paying 7.5% on money you borrow and then charging 3.5% on money you lend then you won't be long about going out of business. This is all basics, at one point in the 80's mortgage interest was up around 18% or so because that was the only way the banks could make money and remain in business.

6-8% mortgage interest is probably around standard and where we will probably end up over the next couple of years imo

pyzon

yes 1% on the way, adds 120 to our mortgage and with the 120 extra taxes each month that's approx 250 down a month, 3k a year less money in our pockets and less to spend...<self-edited to remove the irrelevant part of the post keeping somewhat to the topic >

fcdub

Well I disagree (Iago). The banks pushed the property market with cheap money and didnt stress test people correctly. They created the situation. The government failed to regulate this and are taxing people to save the banks (pTSB is non NAMA I know but pTSB customers are still propping up the other banks) and now the individual loses. I dont think its as simple as you make out.

Speak Now

bryaner wrote: »

Variable and trackers will get hit when the ECB put up their rates..:(

So all those that chose varibale over tracker in the past were doomed from day 1?

bryaner

Jerry Seinfeld wrote: »

So all those that chose varibale over tracker in the past were doomed from day 1?

Kinda, thats why trackers aint obtainable anymore..

Speak Now

So my new variable will be 5.55% :mad:

danbohan

fcdub wrote: »

Well I disagree (Iago). The banks pushed the property market with cheap money and didnt stress test people correctly. They created the situation. The government failed to regulate this and are taxing people to save the banks (pTSB is non NAMA I know but pTSB customers are still propping up the other banks) and now the individual loses. I dont think its as simple as you make out.

where were the banks selling these mortgages , kindergartens ??

fcdub

It really is shocking news.:mad:

fcdub

very funny danbohan! Youre a a funny guy. Im sure lots of your friends and family are in the same boat. Youre probably a financial guru who signed up to a tracker as you knew they were the only show in town due to your immense financial knowledge.

danbohan

fcdub wrote: »

very funny danbohan! Youre a a funny guy. Im sure lots of your friends and family are in the same boat. Youre probably a financial guru who signed up to a tracker as you knew they were the only show in town due to your immense financial knowledge.

its nothing to do with trackers or otherwise mon ami , its to do with basic common sense . anybody that did not realise that interest rates of 2% or 3% or 4% were not normal could not continue was childish in the extreme , an average interest rate of 8% to 10% over the life time of the mortgage should have been what people were budgeting for , but no , many got greedy and over stretched themselves by a wide margin and now its all the banks , politicians , developers fault !!!!

Gunsfortoys

Nobody was forced to take a mortgage out.

Speak Now

danbohan wrote: »

its nothing to do with trackers or otherwise mon ami , its to do with basic common sense . anybody that did not realise that interest rates of 2% or 3% or 4% were not normal could not continue was childish in the extreme , an average interest rate of 8% to 10% over the life time of the mortgage should have been what people were budgeting for , but no , many got greedy and over stretched themselves by a wide margin and now its all the banks , politicians , developers fault !!!!

And paycuts,job losses,tax hikes etc etc

BostonB

Certainly people were foolish to take out mortgages and not allow for increases in interest rates, or income failing, if one partner was out of work which is likely at some point. But even those careful people are going to caught badly in the current crisis. Which is worse than even they predicted.

fcdub

I stand corrected (danbohan). Its not the banks fault, I see that now. The regulator did a great job to control the bubble. He also kept a keen eye on the practices at Anglo.

We better tell our friends in France that their interest rates, that have been stable for the last 20 years at between 3 and 5 percent that they are about to double! They probably dont know.

My goodness its all so clear now. The public should regulate the financial industry, theres no need for watchdogs, we could save a fortune for the state! Its the publics fault when things go wrong and taxes skyrocket because we have to borrow 85 billion from the IMF.

Thanks for pointing out that interest rates could only go one way, I had no idea.

I think my problem, apart from being totally stupid, was that I didnt see unemployment going through the roof in three years, I didnt see the major tax increases coming!

If only I had spoken to you guys before. You must have made a fortune on spreadbetting. Oh know youre not greedy!

danbohan

Jerry Seinfeld wrote: »

And paycuts,job losses,tax hikes etc etc

all part of life i am afraid

Speak Now

BostonB wrote: »

Certainly people were foolish to take out mortgages and not allow for increases in interest rates, or income failing, if one partner was out of work which is likely at some point. But even those careful people are going to caught badly in the current crisis. Which is worse than even they predicted.

Very true, i suppose if you look at ever thing that could happen over the life of a mortgage no one would ever take one out.

Speak Now

danbohan wrote: »

all part of life i am afraid

Thats my point.

BostonB

Gunsfortoys wrote: »

Nobody was forced to take a mortgage out.

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

bryaner

Have a mortgage myself and it's tough, but I'll get trough it.

Renting was never for me as your house is not your home.

Cheer up fellow mortgage holders there is light at the end.

fcdub

Positivity! I like it.:) We'll get there alright but we do need to push back on these guys. We shouldnt allow them to walk all over us.

noworries

BostonB wrote: »

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

what is an 'inappropriate mortgage?'

Did the punters not flock to the banks with their application forms filled out
with their proof of earnings and their evidence of savings?

Did the punters not queue overnight to sign on the dotted line for the off-plan money making bonanza.

Did the punters not rejoice when they launched the Hermes bag of dreams
in BT's and queued around the block to get their grubby little manicured hands on it..

You reap --- oh you reap - what you sow. The piper WILL be paid.

fcdub

very deep

bryaner

noworries wrote: »

what is an 'inappropriate mortgage?'

Did the punters not flock to the banks with their application forms filled out
with their proof of earnings and their evidence of savings?

Did the punters not queue overnight to sign on the dotted line for the off-plan money making bonanza.

Did the punters not rejoice when they launched the Hermes bag of dreams
in BT's and queued around the block to get their grubby little manicured hands on it..

You reap --- oh you reap - what you sow. The piper WILL be paid.

The piper will get sh!t all, example bank takes house, council rehouse costing the country more, bank bring the ex owners to court for what they owe owners state inability to pay blah blah.

End result banks get sh!t all..

Dempo1

Iago wrote: »

Everything apart from the bold in this discussion is irrelevant.

If you're running a business and you are paying 7.5% on money you borrow and then charging 3.5% on money you lend then you won't be long about going out of business. This is all basics, at one point in the 80's mortgage interest was up around 18% or so because that was the only way the banks could make money and remain in business.

6-8% mortgage interest is probably around standard and where we will probably end up over the next couple of years imo

So things in the 80's were nice and dandy were they?

I for one will be ****ed if another 1% is added on, I'm currently paying 4.7%. I'm not one of those who took out 100% mortgages, i am one of those many many people who took out a small responsible mortgage and whilst nowhere near negative equity, my earnings have dropped substantially. I also invested in a HOME, not a piece of investment property.

Some appear to forget, Banks back in the good old days lent money against small rates they were paying back in in the early and late 90's, they now appear to be hammering people because of the rates they have to pay now, the odd thing is there not lending any money these days so why the need to continuously hike rates.

As for the trackers, tough titty i say, are we to sympathize with the banks for what were at the time considered a sensible product, they gambled, pity about them and fair play to anyone lucky enough to have taken out a tracker mortgage.

noworries

bryaner wrote: »

End result banks get sh!t all..

Step back and look at the bigger picture....

The piper is not the banks.

The piper HAS been paid - the bondholders have their money - Ireland Inc has the debt to prove it.

A generation will be lost but back on topic.
Sucks to have a variable.

BostonB

noworries wrote: »

what is an 'inappropriate mortgage?'...

I don't think there is a legal or regulatory definition. But for me, it would be along the lines of...

...where the level of risk was unsuitable for a particular client based on the information given to the adviser...

bryaner

noworries wrote: »

Step back and look at the bigger picture....

The piper is not the banks.

The piper HAS been paid - the bondholders have their money - Ireland Inc has the debt to prove it.

A generation will be lost but back on topic.
Sucks to have a variable.

True, the bondholders should be Bbq'd

BostonB

noworries wrote: »

Step back and look at the bigger picture....

The piper is not the banks.

The piper HAS been paid - the bondholders have their money - Ireland Inc has the debt to prove it.

A generation will be lost but back on topic.
Sucks to have a variable.

True. The banks should not have been able to get their loans either. That doesn't excuse what they did either.

phil1nj

I called Permanent TSB this morning to enquire about the rate hike and to see what fixed rate options were available seeing as I'm currently on a variable rate with them and their website does not list fixed rates for existing customers. The person I spoke to claimed that it is just speculation and no definite decison has been made about the 1% hike (read: based on past form, its definitely on the way).

A 1% hike will be tough to shoulder but with little or now choice available to me it will be paid. What's at the back of my mind though is where does it end? If ECB rates do rise in the coming months/years will PTSB and the other financial institutions use this as a valid excuse for another round of rate increases despite them claiming that there is no correlation between the two rates at the moment.

Oh and just to add insult to injury, if I did decide to switch to a fixed rate for 2 or 5 years (only options given to me by PTSB) I will have to pay a 100Euro administration fee for the privilage.

noworries

Look, variable mortgage rates, in most cases, are priced off the Euribor 3 month rate which has a long term average(10 years) of approx 3%.

Banks need to make a margin on this and without competition the will look to
make approx 2 percent on this - so you get roughly 5% rate give or take a bit
of competiton.

However, all the financial institutions in Ireland are insolvent so they need
another few basis points to make a further profit in order to pay off thier
creditiors so say 6.5%. The ones that are hoplessly screwed will try to make
more to avoid being wound up.

Average mortgage interest rates in the rest of Europe are about 5.8% -
barring any shocks in inflation (which are lurking in the background) I would
expect that a mortgage interest rate of 7% is not too far away and I
would urge any mortgage holder to 'stress test' themselves against that
figure.

Now for the disclaimer - I don't have a mortgage anymore - I lived through
the currency crisis in '91 when the mortgage rate went to 13% and slowly
came down to 4.5% by the end of the 90's I beleive that any rate under
5% is not sustainable as inflation will quickly kill off any gains.

Moaning and whining about a mortage rate increase to 5% is a waste of time. Conserve your energy for when the rates of pTSB mortgages reach 9%

Rabidlamb

I see this as opportunism as they'll get the double whammy of the ECB rate hikes expected in the summer.

I seem to remember that the PTSB have a high proportion of customers with trackers so they are only gouging a small trough.
I'd like to thank these poor unfortunate variable customers for their selflessness in keeping the banks solvent.

I take it the others will follow suit once the horror had died down.
They'll be sure to do it before the new government have to feel the public wrath.

BostonB

Out of curiosity what fixed rate deals are people being offered?

Dempo1

BostonB wrote: »

Out of curiosity what fixed rate deals are people being offered?

Pretty much Take it or leave it by all accounts

PTSB know full well their customers are stuck with them, no other bank is accepting transfer of mortgages!

At best they might offer a 5 year fixed deal but this will only reflect what they are proposing this week.

Mr Velo

BostonB wrote: »

Out of curiosity what fixed rate deals are people being offered?

2 year fixed: 5.25%
5 year fixed: 5.75%

7 to 10 fixed: 6.1%

Iago

It's all nonsense. Nobody had a gun held to their head and was told to get a mortgage.

Nobody on a variable mortgage can stand up and say "ah well, it was only supposed to be variable while it was in my favour you know"

Whether your in work, out of work, reduce hours, reduced pay, reduced take home because of taxes, whatever. None of this matters, or should matter, to the banks. They are businesses, they have to make money. If you did sign up to a variable (or tracker) mortgage and didn't do any stress testing for yourself for the biggest financial decision you were ever going to make well then that's your failing, and regardless of who you want to blame it lies squarely with you.

btw, mortgage interest is still at close to historic lows, it's only going one way.

solerina

The biggest problem isnt that mortgage interest rates are rising because yes some of us realised that was likey to happen. My problem and many liek me is that our wages are falling dramatically.
When I took out my mortgage in Nov 2006 I was paying 50% of my wages on my mortgage each month....I saw this as Ok as I am on a fixed scale so I realised that my wages would rise yearly and I could afford hikes in the longer term (and obviously afford it when TRS was taken away from me)....However no one could have forecasted that my wages would be eroded as much as they have been....I am now earning the same amount as I was when I took out the mortgage despite gaining a promotion in work (down approx 600 a month)...I know I am lucky to have a job before anyone jumps down my throat !!!!

BostonB

Allow for a crash, difficult times, interest rates to rise to 10% ish ok. I'm not sure any one would have predicted the country would be as good as bankrupt.

Iago

solerina wrote: »

The biggest problem isnt that mortgage interest rates are rising because yes some of us realised that was likey to happen. My problem and many liek me is that our wages are falling dramatically.
When I took out my mortgage in Nov 2006 I was paying 50% of my wages on my mortgage each month....I saw this as Ok as I am on a fixed scale so I realised that my wages would rise yearly and I could afford hikes in the longer term (and obviously afford it when TRS was taken away from me)....However no one could have forecasted that my wages would be eroded as much as they have been....I am now earning the same amount as I was when I took out the mortgage despite gaining a promotion in work (down approx 600 a month)...I know I am lucky to have a job before anyone jumps down my throat !!!!

BostonB wrote: »

Allow for a crash, difficult times, interest rates to rise to 10% ish ok. I'm not sure any one would have predicted the country would be as good as bankrupt.

I don't dispute either of these things, within reason. I think the scale and speed of the crash has surprised the vast bulk of people.

However the interest rate rise isn't really an issue there. The issue from that is the over-reaching mortgage principal and monthly payment. The additional amount brought on by the rise in interest rates is nearly an afterthought for people who are affected by that. I can understand them being stressed and raging at it, but I can also see that this rise was an inevitability and that with proper planning at least some of the pain could be avoided.

Ultimately it's going to mean sacrificing some of the luxuries that people have started to take for granted and it'll be a long hard slog to the other side.

phil1nj

Iago wrote: »

It's all nonsense. Nobody had a gun held to their head and was told to get a mortgage.

Nobody on a variable mortgage can stand up and say "ah well, it was only supposed to be variable while it was in my favour you know"

Whether your in work, out of work, reduce hours, reduced pay, reduced take home because of taxes, whatever. None of this matters, or should matter, to the banks. They are businesses, they have to make money. If you did sign up to a variable (or tracker) mortgage and didn't do any stress testing for yourself for the biggest financial decision you were ever going to make well then that's your failing, and regardless of who you want to blame it lies squarely with you.

btw, mortgage interest is still at close to historic lows, it's only going one way.

You need to relax my friend. I think a lot of people are well aware of the fact that rates can go up as well as down. What most people are also well aware of is that this country is now in the midst of one of the worst economic crisis that has ever been seen yet every single policy or decision made by institions that have a say over how large proportions of your income are spent seem intent on turing the screw. By this I mean the banks and the government. The Government have increased taxes, lowered tax bands, brought in a USC (a bank tax to all intents and purposes). Meanwhile the lending institutions (banks, building societies etc) have all increase their lending rates, are about to reintroduce fees and are now hiking up interest rates on mortgagges. Both of these severely reduce the spending power of the population which results in a further drop in revenues from transactional taxes and pushes us further in to the mire.

If we are serious about getting this country back on its feet I don't think crippling workers or mortgage holders is the way to go. Every extra euro taken by the banks or taxman is a (multiple of a) euro that won't get spent in the economy. You can shout all you want about mortgage rates been at historically low levels but surely all of that information is relative. Just think about what will happen should people starting getting in to serious levels of arrears or defaulting on a grand scale? How much extra will it cost the government either rehousing these people or paying out mortagage supplements to people who meet the criteria?

BostonB

You're probably right. The issue is not the interest rate. Though it doesn't help. Its the much bigger drop income for even relatively prudent people.

Iago

phil1nj wrote: »

If we are serious about getting this country back on its feet I don't think crippling workers or mortgage holders is the way to go. Every extra euro taken by the banks or taxman is a (multiple of a) euro that won't get spent in the economy. You can shout all you want about mortgage rates been at historically low levels but surely all of that information is relative. Just think about what will happen should people starting getting in to serious levels of arrears or defaulting on a grand scale? How much extra will it cost the government either rehousing these people or paying out mortagage supplements to people who meet the criteria?

I don't really disagree with much of what you're saying, what I do disagree with is the "How dare the banks give me the money I asked for" mentality.

but to spin that last paragraph a little. Is the best way to get the country back on it's feet to let the entire financial system collapse? Particularly in relation to PTSB who haven't had a government bailout.

That's what will happen if the government are successful in keeping the mortgage interest rates down at below cost rates.

sollar

Apparantly there are new bankruptcy laws coming in at end of march 2012. This will be good news for alot of people. There has to be relatively fair way out of the mess some people have found themselves in over massive mortgages and NE.

1% increase, prob another increase or 2 next year and on top of that ECB increases...... its going to be grim for thousands of people.

Ask the canvassing politicians when they come to the door what are they going to do for these people?