How are banks reacting to Covid19?

Howdy do folks,

Not seeing a whole lot on this, in terms of actual measures announced, but I have heard the topic mentioned a few times on the radio as I've been driving a lot over the last few days.

Never really heard a bank spokesperson, more just your general joe soap or business owner commenting that "something should be done".

I would presume that an interest freeze and a set-time payment break would be the best solution (ie; you can skip your March and May payments, and interest being charged will stop accruing until that date).

I've heard mention of banks looking to allow people to defer payments, but even at that, if the interest is still racking up in the background, then it's likely that anyone hit by the virus will be looking at substantial growth in the interest portion of their loans that will need repaying?


Anyone any idea?

Cheers

beggars_bush

Well the shower in AIB decided to introduce quarterly charges and a fee per contactless transaction

antix80

beggars_bush wrote: »

Well the shower in AIB decided to introduce quarterly charges and a fee per contactless transaction

They've delayed the contactless charge, possibly in response to Coronavirus.

As for delaying interest payments... first and foremost, read the terms and conditions of the loan you took out. They probably make references to payment holidays, interest only payments, minimum payments, etc.

Apart from that, it's unlikely banks will announce blanket policies and instead have internal guidelines and deal with things on a case by case basis. It wouldn't make sense to put a blanket freeze on interest charges when not everyone requires it.. some people are working as usual, others maybe lost jobs/went out of business so don't require the asset (e.g. van) they're paying interest on to get to work and will be able to sell it to clear the remaining loan.

So.. take a deep breath before joining the far-left brigade of "the bankers aren't doing enough", and "employers should have to pay everyone not to come to work". The situation is developing. Let's not panic yet.

LastStop

What about new business Lending ? Any word on whether banks are going to put a freeze on issuing new loans/mortgages? If people's job security is in doubt and places are getting shut by the day.... why would a bank issue a mortgage of 250k or home improvement loan of 40k knowing that in a month they could be dealing with that person saying they can't afford to repay.

Saudades

What's the likelihood of branches temporarily closing?

Fireball81

BOI have waived all contactless fees

AIB have deferred the introduction of contactless fees

JTMan

Saudades wrote: »

What's the likelihood of branches temporarily closing?

Zero. In Italy, China and elsewhere bank branches stayed open. Bank branches are essential retail services for some especially the elderly.

Delta2113

€30 contactless limit going to €50.

joeguevara

JTMan wrote: »

Zero. In Italy, China and elsewhere bank branches stayed open. Bank branches are essential retail services for some especially the elderly.

This would be an indicator that they would close. Obviously learn from Italy mistakes but anything to stop elderly congregating in public.

From what I understand, if you take part in the 3 month holiday from loans/mortgages, your interest is still accruing on the principal, so will effectively cost you more in the long run. No different than if you'd just not bothered to pay for 3 months anyway. :rolleyes:

joeguevara

Deleted User wrote: »

From what I understand, if you take part in the 3 month holiday from loans/mortgages, your interest is still accruing on the principal, so will effectively cost you more in the long run. No different than if you'd just not bothered to pay for 3 months anyway. :rolleyes:

Firstly, the main issue is that the pause will have no impact on your credit rating. Secondly there is no decision on whether interest would accrue or not. In UK it has been decided that interest would accrue but it’s peace of mind with regard credit rating. No way three months will be enough though.

bush

Is this in place yet does anyone know?

is_that_so

bush wrote: »

Is this in place yet does anyone know?

This was only announced yesterday. The how is still being sorted out but given how quickly a lot of measures have been implemented it should be soon enough.

SEPT 23 1989

I thought all new mortgage applications were heavily stress tested after the crash

Q&A

SEPT 23 1989 wrote: »

I thought all new mortgage applications were heavily stress tested after the crash

They are stress tested against increases in interest rates and possibly falls income but no stress test is going to be based on the sudden increase in unemployment we're experiencing.

If a bank stress-tested based on borrowers losing all their income there would be no lending. Lending is risky lending rules reduce risk but don't do away with them totally.

joeguevara

joeguevara wrote: »

Firstly, the main issue is that the pause will have no impact on your credit rating. Secondly there is no decision on whether interest would accrue or not. In UK it has been decided that interest would accrue but it’s peace of mind with regard credit rating. No way three months will be enough though.

My issue is that by not freezing (or heavily reducing) interest on the amount owed, because the amount owed is going to stay higher (due to the payment break/holiday) your mortgage is actually more profitable to a bank, than it would be if you'd been paying up on time.


Reducing interest to 0% for 3 months would cost the bank a few euro, but surely they have that in their reserves. Just seems a little unfair to me, personally.

Q&A

[Deleted User] wrote: »

My issue is that by not freezing (or heavily reducing) interest on the amount owed, because the amount owed is going to stay higher (due to the payment break/holiday) your mortgage is actually more profitable to a bank, than it would be if you'd been paying up on time.


Reducing interest to 0% for 3 months would cost the bank a few euro, but surely they have that in their reserves. Just seems a little unfair to me, personally.

It's the interest on loans that is the banks profits. For a great many loans it's more than a few euro. If you don't capitalise the missed interest payments the banks will have to absorb the loss on the loans

Moral hazard is an issue. Why would anyone pay their loan installments if they thought they could get away with an interest free loan.

The capitalising the interest is the happy medium between the banks going after people and kicking them out of their homes and bankrupting the banks. It helps keep those who can't afford to to pay in the short-term while not disincentivising those that can pay.

jag con

Very simple i was onto BOI today and all they will do with the mortgage is you can take a 3 month break but the interest and payments will be added to the mortgage after 3 months, Therefore you will be paying more for your mortgage. Simply the banks are promising and not delivering

Screwed the country we bailed them out and then when we need help they'll do feck all.

na1

Just got an email today that AIB is CANCELLING the €2,500 no fee rule!


Your Current Account banking has previously been provided free of maintenance and transaction fees when you have kept a minimum balance of €2,500 in each quarter. This option will be withdrawn on 30th May 2020.

That's very nice timing with supermarkets who are stopping/discouraging cash payments...

duffysfarm

What info do you gave supply them with to get the break? I.e. payslips or note from employer to say job is gone or do they just do it over the phone?

jag con wrote: »

Very simple i was onto BOI today and all they will do with the mortgage is you can take a 3 month break but the interest and payments will be added to the mortgage after 3 months, Therefore you will be paying more for your mortgage. Simply the banks are promising and not delivering

Screwed the country we bailed them out and then when we need help they'll do feck all.

PopePalpatine

na1 wrote: »

Just got an email today that AIB is CANCELLING the €2,500 no fee rule!


Your Current Account banking has previously been provided free of maintenance and transaction fees when you have kept a minimum balance of €2,500 in each quarter. This option will be withdrawn on 30th May 2020.

That's very nice timing with supermarkets who are stopping/discouraging cash payments...

FFS, BOI probably aren't far behind them.

jag con

duffysfarm wrote: »

What info do you gave supply them with to get the break? I.e. payslips or note from employer to say job is gone or do they just do it over the phone?

Hi explained everything over the phone but have a letter for them if they require it.

jag con

jag con wrote: »

Hi explained everything over the phone but have a letter for them if they require it.

Considering they've been given a thumbs up to do this, and it benefits them financially, I can't imagine they'll care too much about you wanting the holiday.


It's in their interest to give it to you at the moment, and with the amount of people likely to be looking for it, I'd say they'd accept just the phone call. I don't think they'd want your letter aswell?




That said, I've a big loan with the Credit Union (who should have been involved with this, in my opinion). I rang them today and they said they'd get back to me tomorrow. I presume they will at least match what the banks are doing.

Earleybird

jag con wrote: »

Screwed the country we bailed them out and then when we need help they'll do feck all.

So your solution presumably is charity all round? You'll be moaning when they need another bailout then.

jag con

Earleybird wrote: »

So your solution presumably is charity all round? You'll be moaning when they need another bailout then.

You presume wrong Earleybird, All I want is a break for 3 months and add 3 months to my mortgage term, as what was announced by the government with no penalties etc.Simple, not charity.

My view on the banks is that they were called in to the government and offered a short term solution, but that short term solution is nothing new for the customer. Anyone can apply for a mortgage holiday on any given day.

c.p.w.g.w

PopePalpatine wrote: »

FFS, BOI probably aren't far behind them.

Going to drive folks to the likes of N26 & Revolut

joeguevara

jag con wrote: »

Very simple i was onto BOI today and all they will do with the mortgage is you can take a 3 month break but the interest and payments will be added to the mortgage after 3 months, Therefore you will be paying more for your mortgage. Simply the banks are promising and not delivering

Screwed the country we bailed them out and then when we need help they'll do feck all.

Seeing as this hasn’t been formally announced and the finer details are not as yet agreed with government, the employee is only telling you what the current process is. Wait and see what is finally agreed.

We wanted a payment holiday and it is unprecedented that it is being given. Hopefully it will be a good deal but interest is the least of our worries.

The J Stands for Jay

Delta2113 wrote: »

€30 contactless limit going to €50.

Someone tell Tesco to get rid of their limit on Google Pay

kravmaga

c.p.w.g.w wrote: »

Going to drive folks to the likes of N26 & Revolut

A lot of people including myself and my partner went to Revolut and N96 over a year ago.

bizidea

Bank of Ireland are upping their cash and cheque handling fees by 33% great to see them putting their shoulder to the wheel by charging us more

evosteo

Partners shop is closing down this evening due to the virus so she will be out of work for the foreseeable.

Chances are it may never reopen as it was already in financial difficulty.

Currently in year one of a 5 year fixed with EBS,

Has anybody contacted them to request a 3 month or 6 month extension to their term?

There are so many scenarios out there so i dont think this will be straight forward.

I though they announced in the news that the 3 or 6 months would be added onto the end of your term? i.e payments would remain the same for the rest of your term, you would just pay for an additional 3-6 months?

Im nervous now after reading below about increased payments etc...

Ill be able to manage next months payment but after that we maybe in trouble as there still all the other bills to contend with, ESB, credit union loans, credit card payments, groceries etc...

evosteo

Just checked EBS website and found this.

Is this not at odds to what the government announced last week?:mad:


Bespoke supports for our Mortgage Customers impacted by COVID-19
We know that many of you are worried about COVID-19. At EBS we are determined to continue to support you through this situation and we encourage you to contact us if you have been financially impacted by COVID-19.

For those who may be concerned that you won’t be able to make your mortgage repayments as a result of COVID-19, we have developed two solutions specifically designed to support you during this time.

You can apply to take a 3 month payment break (moratorium) on your mortgage repayments.
Or you can apply for 3 months of interest only mortgage repayments.
If you would like to apply for a three-month break from payments or to pay interest only from April 2020 please call our team on 1850 330 044. (Opening Hours: Monday to Thursday 9am to 8pm, Friday 9am to 6pm, Saturday 9am to 1pm).

It is important to note that when the moratorium or interest only period ends, your monthly repayments over the remaining term of your loan will be increased to ensure that your mortgage will be repaid (together with interest due) within its original term.

It is also important to note that the payment holiday is for Mortgage repayments only. For customer(s) who arranged House Insurance, Life Assurance and/ or Payment Protection Insurance through EBS, these premiums will continue to be collected via an amended direct debit. For non direct debit customer(s) these premiums will continue to require payment to avoid the loan going into arrears.

Also please note that at the moment this solution is only applicable to Private Dwelling Home (PDH) and not Buy-To-Let (BTL) customers. However we continue to work on this solution and expect to be able to include Buy-To-Let customers in the next couple of days so please check back during the week to get the latest updates on Buy-To-Let customers.

If you are facing financial difficulty separate to COVID-19, click here to see how we can support you.

antix80

evosteo wrote: »

Currently in year one of a 5 year fixed with EBS,

Is term only 5 years?

Maybe refinance.

evosteo

antix80 wrote: »

Is term only 5 years?

Maybe refinance.

35 years. Just fixed last sep for next 5 years due to brezit etc... 29 years to go

antix80

evosteo wrote: »

35 years. Just fixed last sep for next 5 years due to brezit etc... 29 years to go

In that, don't worry about a 3 month payment holiday!

Tinder Surprise

For the first time in 15yrs paying a mortgage I may need to ask to stop paying for a short period (with a bit of luck) as my wife is on the verge of being temporarily let go.

I'm with AIB

There seems to be a couple of options but what's best to make sure I don't end up paying a lot more back than would have originally with regular payments.

All advice welcome and thanks in advance

antix80

Tinder Surprise wrote: »

For the first time in 15yrs paying a mortgage I may need to ask to stop paying for a short period (with a bit of luck) as my wife is on the verge of being temporarily let go.

I'm with AIB

There seems to be a couple of options but what's best to make sure I don't end up paying a lot more back than would have originally with regular payments.

All advice welcome and thanks in advance

Very simple really... take the payment holiday to free up your cash. By not paying back your mortgage, you're effectively borrowing at a rate of perhaps 2.5-3% which beats sticking groceries on your credit card and paying 13-19%.

At the end of the payment holiday, your bank will adjust your payments upwards slightly to make sure your payments still pay off your mortgage on time.

Even though the rate is low, you still don't want to pay off 3 months of grocery shopping over 20 or 30 years... so when things get better, it would be a good idea to pay a lumpsum off your mortgage or increase your payments slightly.


I think it's a good idea for everyone who has other debt (car, credit card, credit union etc) to avail of the mortgage holiday and use it to clear the more expensive debt.

Other things you can do... switch to a 5 year fixed rate. Some banks are offering a better fixed rate than variable. Sure, the variable rate can fall, but the fixed rate cannot rise and security is good in times like these.

You should also review your life assurance policies and house insurance to make sure you're not paying too much. My sibling had been paying an expensive PHI policy for years despite no longer being self-employed and not eligible to receive benefits.

Tinder Surprise

antix80 wrote: »

Very simple really... take the payment holiday to free up your cash. By not paying back your mortgage, you're effectively borrowing at a rate of perhaps 2.5-3% which beats sticking groceries on your credit card and paying 13-19%.

At the end of the payment holiday, your bank will adjust your payments upwards slightly to make sure your payments still pay off your mortgage on time.

Even though the rate is low, you still don't want to pay off 3 months of grocery shopping over 20 or 30 years... so when things get better, it would be a good idea to pay a lumpsum off your mortgage or increase your payments slightly.


I think it's a good idea for everyone who has other debt (car, credit card, credit union etc) to avail of the mortgage holiday and use it to clear the more expensive debt.

Other things you can do... switch to a 5 year fixed rate. Some banks are offering a better fixed rate than variable. Sure, the variable rate can fall, but the fixed rate cannot rise and security is good in times like these.

You should also review your life assurance policies and house insurance to make sure you're not paying too much. My sibling had been paying an expensive PHI policy for years despite no longer being self-employed and not eligible to receive benefits.

thanks so much for such a comprehensive reply

lawrencesummers

I was offered a 3 month break by Pepper

So no payments of 1200 for the next three months and then that amount will be added to the remaining term of the mortgage, meaning i will pay nearly 6500 for the 3600 that's not paid in the next 3 months.

I asked about taking 3 months off but paying it back over a shorter period like 1 - 3 years and they hadn't heard of it, but was going to check on it.

She also said that i could take 3 months off and then add it to the end of the mortgage but that would need a financial statement to be completed, she was giving me the impression that doing that would take time and be hard to complete. I might follow that up though.

I came away with the distinct impression that they are using this crisis to make a nice profit in the long term off their customers.

Salary Negotiator

lawrencesummers wrote: »

I was offered a 3 month break by Pepper

So no payments of 1200 for the next three months and then that amount will be added to the remaining term of the mortgage, meaning i will pay nearly 6500 for the 3600 that's not paid in the next 3 months.

I asked about taking 3 months off but paying it back over a shorter period like 1 - 3 years and they hadn't heard of it, but was going to check on it.

She also said that i could take 3 months off and then add it to the end of the mortgage but that would need a financial statement to be completed, she was giving me the impression that doing that would take time and be hard to complete. I might follow that up though.

I came away with the distinct impression that they are using this crisis to make a nice profit in the long term off their customers.

What kind of mortgage have you got? Fixed or variable?

Should be nothing stopping you overpaying on a variable or saving a lump sum to pay off when the fixed period ends. You might even be able to over pay on the fixed but that depends on the provider’s terms.

So, you could pay that money back over a much shorter period thus saving on interest.

Jayzee.

Trying to sort an issue with my card but can't contact them

Tap not working

antix80

Jayzee. wrote: »

Trying to sort an issue with my card but can't contact them

Tap not working

Use chip and pin.

If it's a new card you need to activate online, then do a chip and pin transaction for tap to work.

LastStop

Jayzee. wrote: »

Trying to sort an issue with my card but can't contact them

Tap not working

The €50 limit for tap hasn't been brought in yet. I thought it was already and tried tapping for 44quid and it wouldn't work.

theoldbreed

kravmaga wrote: »

A lot of people including myself and my partner went to Revolut and N96 over a year ago.

I have a Revolut card and find out great, what's the difference between it N26? Would you do your actual banking with N26? Direct Debits etc

antix80

LastStop wrote: »

The €50 limit for tap hasn't been brought in yet. I thought it was already and tried tapping for 44quid and it wouldn't work.

Supermarket's systems are still stuck at €30, even for Google and apple pay

Dodge

antix80 wrote: »

Supermarket's systems are still stuck at €30, even for Google and apple pay

Not supermarkets for google/Apple. Just Tesco AFAIK. Certainly Dunnes and Aldi don’t have this restriction

The increase to 50 for contactless won’t happen until April

Jayzee.

LastStop wrote: »

The €50 limit for tap hasn't been brought in yet. I thought it was already and tried tapping for 44quid and it wouldn't work.

Tap not working at all for me, have to use pin everytime

Couldn't get through to bank on fone

lawrencesummers

Salary Negotiator wrote: »

What kind of mortgage have you got? Fixed or variable?

Should be nothing stopping you overpaying on a variable or saving a lump sum to pay off when the fixed period ends. You might even be able to over pay on the fixed but that depends on the provider’s terms.

So, you could pay that money back over a much shorter period thus saving on interest.

I’m not talking about the issue of OVERPAYING. I’m talking about just PAYING.

Salary Negotiator

lawrencesummers wrote: »

I’m not talking about the issue of OVERPAYING. I’m talking about just PAYING.

I know. But you seem to think that your only option is to take the payment holiday and then repay it at the end of the mortgage.

I’m just pointing out that there are other steps you can take to minimize the amount of interest or impact of that break.

lawrencesummers

Salary Negotiator wrote: »

I know. But you seem to think that your only option is to take the payment holiday and then repay it at the end of the mortgage.

I’m just pointing out that there are other steps you can take to minimize the amount of interest or impact of that break.

You didn’t read what I posted so.

The only option that they have been forthcoming with is a 3 month break, followed by increased payments for the duration of the mortgage. So 3600 not paid in The next moths that will cost 6500 over the term of the mortgage.

They haven’t been forthcoming with any other option, they are due to come back to me with an option Of repaying the 3600 over 2 years and more info on adding 3 months to the end.

Salary Negotiator

lawrencesummers wrote: »

You didn’t read what I posted so.

The only option that they have been forthcoming with is a 3 month break, followed by increased payments for the duration of the mortgage. So 3600 not paid in The next moths that will cost 6500 over the term of the mortgage.

They haven’t been forthcoming with any other option, they are due to come back to me with an option Of repaying the 3600 over 2 years and more info on adding 3 months to the end.

I read it and understood it. The problem is that you don’t understand mortgages and how they work.