Permanent TSB extortionate rate on SVR

liammur

Kev. wrote: »

Fianna Fáil has tabled a private member's motion for discussion in the Dáil next Tuesday and Wednesday evening between 7.30 pm and 9 pm with the vote on Wednesday at 9 pm.



That Dáil Éireann:

notes that:

- the level of mortgage repayments, negative equity and mortgage arrears is imposing a significant burden on many thousands of Irish families;

- the latest mortgage arrears statistics from the Central Bank show that the level of arrears is increasing at an accelerating rate;

- the standard variable interest rate for residential mortgages charged by State-owned permanent tsb is substantially out of line with that charged by other mortgage providers in receipt of State support and is placing unacceptable financial pressure on the bank’s variable rate customers;

- normal competitive forces which would allow customers with high mortgage costs to switch to an alternative provider are not currently present in the marketplace effectively trapping customers with high standard variable rate mortgages;

- the Government put AIB under considerable public pressure to reduce its standard variable interest rate in line with the ECB rate reduction in November 2011 but is applying a ‘hands off’ approach in relation to permanent tsb

- the lack of credit for SMEs is having a detrimental impact on economic activity, is impeding the country’s economic recovery and is costing jobs;

- the Governor of the Central Bank has recently commented that credit conditions are tougher in Ireland for SMEs than in any other country in Europe both in terms of costs and availability

- certain financial institutions are attaching unreasonable terms and conditions to offers of new lending to many businesses and are often making unilateral changes to the lending arrangements in place with businesses

- the lending performance of the banks is currently being measured by the amount of new credit sanctioned rather than the amount actually drawn down and put into circulation in the economy

and resolves:

- to call on the Government, as the controlling shareholder in Irish Life and Permanent, to use all means possible to bring about a reduction in the standard variable interest rate being charged by permanent tsb on its residential customers in order to bring it into line with rates being charged by other mortgage lenders in the market and

- to call on the Government to measure the new lending performance of the banks by the amount credit actually drawn down and circulated in the economy rather than by loan approvals or repackaging of existing loan facilities and

- to call on the Government to set out its overall implementation strategy in respect of the Inter-Departmental Mortgage Arrears Working Group, known as the ‘Keane report, and to detail all other steps it plans to take to address the escalating mortgage arrears crisis.



If you are affected by this issue, you should contact your TD and ask him to sign you in for the debate and ask him to speak on the motion. If you can make it on only one of the nights, Wednesday night would be better as the vote will be taken then.

Alternatively you can contact Kevin Barrett at kevin.barrett@oireachtas.ie or by phone at 01 - 6183794. Kevin is the Economic Policy Advisor to Michael McGrath TD.

FF taking an easy and populist route, but it must be said it looks awful for the current government. They used a sledge hammer in wiping out IL&P shareholders, and almost a year on and have done nothing to tackle the high interest rates.

later12

For anyone looking for new information, this study is probably an exercise in stating the glaringly obvious.

However, if anyone is interested in an analysis of interest rates from 2003-11 and in particular how variable rate pricing mechanisms were altered three years ago, this technical paper can be an interesting read.

http://www.centralbank.ie/publications/Documents/01RT12.pdf

The analysis suggests costs relating to increased credit risk may be becoming an increasingly important factor in setting variable rates. Banks with higher arrears rates tend to exhibit higher variable mortgage rates. The second result from our analysis is that it appears that some lenders are charging higher variables rates to compensate for the losses they are making on their tracker loans, controlling for our estimates of funding costs. A risk with such a strategy is that it may be counter-productive and continue to exert upward pressure on arrears. We find that after controlling for these additional factors, most of the divergence between banks SVRs is explained.

LightReg

For me the issues is that we are stuck with this particular PTSB variable product.
I understood when I signed up from my loan that the rates were subject to change, but also that I could move my mortgage to another bank, or could switch between variable, fixed etc .. in PTSB.
I contacted AIB and BOI, to be told that I did not qualify for a mortgage with them. My LTV and earnings are 100% OK, and they are taking loan applications, but not customers from who have variable rate products from PTSB.
Meanwhile, PTSB will not allow me to change my loan to fixed rate.
It's particulary galing that I am paying extra taxes to pay for the mess that AIB amognst others have made, and yet they are descriminating againt me, they will not take my business .. it feels wrong.
There must be a protection out there I am missing? Can anyone offfer any praticle advise?
P.S. Constructuve advice please... For all the kind humans out there, who get great crack telling us that we are idiots for getting into this position .. we get it .. please go entertain yourself somewhere else.

killers1

LightReg wrote: »

For me the issues is that we are stuck with this particular PTSB variable product.
I understood when I signed up from my loan that the rates were subject to change, but also that I could move my mortgage to another bank, or could switch between variable, fixed etc .. in PTSB.
I contacted AIB and BOI, to be told that I did not qualify for a mortgage with them. My LTV and earnings are 100% OK, and they are taking loan applications, but not customers from who have variable rate products from PTSB.
Meanwhile, PTSB will not allow me to change my loan to fixed rate.
It's particulary galing that I am paying extra taxes to pay for the mess that AIB amognst others have made, and yet they are descriminating againt me, they will not take my business .. it feels wrong.
There must be a protection out there I am missing? Can anyone offfer any praticle advise?
P.S. Constructuve advice please... For all the kind humans out there, who get great crack telling us that we are idiots for getting into this position .. we get it .. please go entertain yourself somewhere else.

The problem that is out there is that there is little or no switcher market. Banks are reluctant to take on another banks debt. AIB won't consider any of this type of lending. BOI will do it where the loan to value is less than 50%. Ptsb have withdrawn fixed rates for existing customers. Until such time as another lender decides existing mortgages with a good track record and a relatively high loan to value with another bank is a source of business to attract I'm afraid you are at the mercy of ptsb. If you LTV is ok (as in you could sell at a profit) then the only way of getting a mortgage elsewhere is to sell your property and AIB & BOI would be happy to lend 92% or 90% ltv respectively. It seems a ridiculous scenario where they would happily lend you the amount you need to move house but wouldn't take on your mortgage from another bank at the same level. AIB's reason (excuse) is that they only want to get involved in transactions that are good for the economy i.e a property purchase..

jased10s

seems crazy the banks we bailed out and own punish us for their gain.