Anyone else pi$$ed of at subsiding tracker mortgages?

BostonB · 23-03-2011 12:42PM

And variables would increase too. Thats a lose lose scenerio. (If you accept that could happen)

Kurley · 23-03-2011 12:44PM

The thing to remember is that a lot of people in this country tried to make profit on property, specifically their own homes, thinking buy now then trade up in a few years. Were they ever going to share the profits made with the rest of us? No. So why should those who made good choices have to take the pain from those who made bad choices?

seamus · 23-03-2011 12:44PM

eamo12 wrote: »

That maybe so, but that is not the point. Again, why should low tracker mortgage rates be allowed on banks that were bailed out and are now effectively state owned?

Being state owned is irrelevant. State owned or not, the contracts exist and the State cannot just ride roughshod over them.

If the banks go bust, there are two things you can do:

1. Default on your debts (all your mortgage holders get their debt written off)
2. Sell your loan book, in which case the contracts get transferred to the buyer but still can't be changed.

The consequences of 1. on the economy are hard to say. If everyone is suddenly "given" their house overnight, you will collapse the value of the property in the state. So those who don't have a mortgage with a failed bank are completely screwed because their neighbours can afford to sell for €10,000 and emigrate due to having no mortgage.

andrewdeerpark · 23-03-2011 12:45PM

Any bank that breaks my tracker I will sue and win in court.

I like others have a legal contract that I will defend. As for the moaners on variable tough.

BaZmO* · 23-03-2011 12:46PM

Sponge Bob wrote: »

Because you were TOO STUPID to change to a tracker when you could...between 2004 and 2008 or so. Most variable rate mortgagees evidently did.

Not really a fair thing to say, a lot of people bought around that time and weren't able to avail of the Tracker rates.

Either way, personally I don't have one, but I certainly don't begrudge anybody that does have one. I also think it's crazy that variable mortgages, in any form, exist. I think all mortgages should be fixed.

leeroybrown · 23-03-2011 12:48PM

eamo12 wrote: »

Again, why should low tracker mortgage rates be allowed on banks that were bailed out and are now effectively state owned?

As seamus points out above, just because the banks are technically state owned doesn't mean the state can just renege on a legally binding contract with a mortgage holder. If they were even to consider it the Attorney General would be telling them to forget about it sooner than they could mention the idea. The mortgage holders hold a very strong legal position on this issue.

I have a variable rate mortgage and pay slightly more interest than people with a similar loan who are on trackers. Good luck to them. I don't moan about it.

smokingman · 23-03-2011 01:00PM

I too think this is disgraceful!

Also, my neighbour has a '92 reg car - mine is a '91 but I think the guards should confiscate his and hand it over to me!

To the OP: grow a pair and accept some personal responsibility will ya! :rolleyes:

woody1 · 23-03-2011 01:01PM

so, i went for a mortgage , weighed up the pros and cons , thought about it for a while, thought about it for another while, ignored the bank manager who was pushing me to go for a fixed rate and took the tracker option, so i should be punished for that....
a friend of mine borrowed less than me he pays back less should the government cut my mortgage in half so that were both equal
or should i have to live with the consequences of my decisions...

woody1 · 23-03-2011 01:02PM

sorry smokingman you made the same point as me at the same time i prob wouldnt have bothered posting anything if youd got there before me

leeroybrown · 23-03-2011 01:09PM

Another thing that people should remember is that a lot of lenders securitised their mortgage books in order to raise investment capital. The interest costs on these securities are probably higher than the interest paid by mortgage holders on variable rates let alone trackers. They're losing money on everything...

average_runner · 23-03-2011 01:15PM

People stop moaning about trackers. When poeple had the choice between tracker, fix, or variable, people choosed the one they thought would save them the most money. People that picked the variable and fixed, lost and thats the fund of taking a gamble.

For the people get mortages now, well prices have dropped.

spank_inferno · 23-03-2011 01:20PM

OP, you should take it up with your Mortgage provider.

Its not the fault of those on trackers that fortune smiles on them.... for now

However should ECB rates explode, so will their payments.

Will those on lower fixed rates then receive the OPs scorn?

eamo12 · 23-03-2011 01:31PM

leeroybrown wrote: »

As seamus points out above, just because the banks are technically state owned doesn't mean the state can just renege on a legally binding contract with a mortgage holder. If they were even to consider it the Attorney General would be telling them to forget about it sooner than they could mention the idea. The mortgage holders hold a very strong legal position on this issue.

I have a variable rate mortgage and pay slightly more interest than people with a similar loan who are on trackers. Good luck to them. I don't moan about it.

Well, trackers pay €180 per 100K than variables at the moment which isn't slightly less by any means.

But the general response to this is tough, live with it. The fact is it's a massive difference some mortgage holders have to pay.

But, what would have happened IF the Govt did not bail out the banks? The tracker mortgage holders have had a contract, the bank is bust and probably some liquidator involved. Then what?

The liquidator could say the contract has to be honored, but to whom?? The whole banking system is insolvent, there is no one to take over the crazy loan. Anyone who would contemplate servicing the loan would demand it lower cost (but the bank has no assets after paying senior bond holders) or increasing the interest rate and nullify the contract.

Enter the Government who effectively honours the low interest rate by bailing out the banks and presto, the contract stands again because there is now someone to sue - yes, the taxpayer.

What no one here seems to get is that their tracker rates exist only because of a political decision, not because of some great foresight in the past.

BostonB · 23-03-2011 01:33PM

eamo12 wrote: »

...
But, what would have happened IF the Govt did not bail out the banks? The tracker mortgage holders have had a contract, the bank is bust and probably some liquidator involved. Then what? ...

Why do you think it would only effect trackers. What about variables and fixed rates. What about the effect on those.

eamo12 · 23-03-2011 01:39PM

spank_inferno wrote: »

OP, you should take it up with your Mortgage provider.

Its not the fault of those on trackers that fortune smiles on them.... for now

However should ECB rates explode, so will their payments.

Will those on lower fixed rates then receive the OPs scorn?

Thankfully, my mortgage is well paid off, but it's striking the attitude displayed by the 'haves' here. Variable rate mortgages (not fixed variable) will always be more than tracker rates which are effectively the type of sub-prime mortgages that got the world into this mess in the first place.

eamo12 · 23-03-2011 01:41PM

BostonB wrote: »

Why do you think it would only effect trackers. What about variables and fixed rates. What about the effect on those.

That's exactly the point - but one thing is for sure, there would be no government guaranteed golden tracker rate.

seamus · 23-03-2011 01:42PM

eamo12 wrote: »

Anyone who would contemplate servicing the loan would demand it lower cost (but the bank has no assets after paying senior bond holders) or increasing the interest rate and nullify the contract.

So if the contract is null, then there is no contract and the mortgage holder now owes nobody anything. Wahey!

I don't think you understand how contract law works. A contract is an agreement between two parties. That contract cannot be amended by either party without the agreement of the other. If one party wishes to transfer the contract to another party, they can do so without amending the contract but the new party to the contract is still bound by the original.

It doesn't matter if one party is a multi-billion euro bank or the United States, the law still applies.

You're pissed that the government has taken on a loss-making loan. I don't see how that's the tracker holders' problem?

Sesshoumaru · 23-03-2011 02:01PM

eamo12 wrote: »

That's exactly the point - but one thing is for sure, there would be no government guaranteed golden tracker rate.

It's already been explained to you what would happen to those trackers even if the banks weren't state owned and had been let go bust. You clearly don't understand or don't want to understand. You come across as a stereotypical Irish begrudger.

Sponge Bob · 23-03-2011 02:16PM

eamo12 wrote: »

Variable rate mortgages (not fixed variable) will always be more than tracker rates which are effectively the type of sub-prime mortgages that got the world into this mess in the first place.

This is plain wrong

Trackers were never offered to sub prime customers, only to PRIME customers. Sub Prime customers were on a super variable rate to compensate for the enhanced risk.

Most reasonable tracker rates were contingent on sub 80% LTV and rather few were offered to 100% LTV customers. I think only Bank of Scotland gave a tracker on 100% LTV ......look what happened to them !

Half of Start Mortgages 100% Sub Prime book is now 90 days in arrears. Corresponding figures from prime lenders would be dramatically lower.

leeroybrown · 23-03-2011 02:21PM

eamo12 wrote: »

Variable rate mortgages (not fixed variable) will always be more than tracker rates which are effectively the type of sub-prime mortgages that got the world into this mess in the first place.

The concept of a tracker mortgage is a fundamentally sound idea and there's nothing sub-prime about it. The bank charge a pre-defined premium over the base that the bank can re-borrow this money. A tracker mortgage given to someone who can't afford it is no different than a variable rate mortgage given to someone who can't afford it.

eamo12 wrote: »

That's exactly the point - but one thing is for sure, there would be no government guaranteed golden tracker rate.

Whoever takes on the loan book of the banks (be it the government, another lender, etc) would be contractually required to honour the tracker agreement.

You seem to developed an huge chip on your shoulder about tracker mortgages. The people who have them made a smart financial choice and the vast majority continue to meet their contractual repayments. The second they start missing payments the bank will force them onto a variable rate mortgage. The fact that the banks securitised (borrowed using the loan book as collateral) these loans and lost the money in the markets is not the individual mortgage holder's problem.

problemchimp · 23-03-2011 02:26PM

eamo12 wrote: »

Interesting letter below to a Clare newspaper:

The ruling classes must all be on tracker mortgages, these subprime remnants of the Celtic tiger era because it's an issue that's rarely brought up in the media.

Why are variable rate mortgage holders left picking up the tab, a direct subsidy amounting to hundreds of Euro EVERY MONTH to tracker holders? It is a fact that variable rates are so high because tracker rates cannot be touched, so one must shoulder the burden for the other.

"It's in the contract" we are told and suddenly contracts become sacrosanct for tracker holders anyway and on that issue only. It is a fact that if our politicians had decided not to bail out the disastrous practices of the banks (like issuing trackers to the comfortable middle classes), then those tracker mortgages would not be allowed to enjoy this 'golden pension' subsidy i.e. the tracker mortgages would have been repackaged as variable rates to reflect the market rates (at least). What good is a tracker rate contract when your bank has gone bust, but WE bailed them out - notice how everyone has to shoulder the burden for that bailout.

It is nothing more than an immoral direct tax on the poor who got caught buying property at the top of the boom to fund the Celtic lifestyles of those who benefited the most out of the recklessness of the banks and politicians.

When I hear my tracker colleagues discussing holidays these days, I can't help thinking that if they paid me 3 or 4 hundred Euro NET extra a month, maybe I too could think about going on a holiday as well.

I sat down and looked at switching my mortgage to a tracker from E.B.S. variable to Halifax. It was a very easy and sensible thing to do. My mortgage is the single biggest financial move I am ever going to make so it makes sense to keep an eye on all options throughout the term of this mortgage. I am certainly not middle class and my wife isn't even working class any more, I just kept my eye on the ball and maybe if you had done the same you wouldn't need to be posting on the subject. It's not my fault that you didn't take up the offers that were being advertised all over the place. Years ago I bought a car which turned out to be a complete heap of shiit, my fault not yours.

smokingman · 23-03-2011 02:35PM

Looking at the OPs past posts, I suddenly understand where he's coming from...

...Fox news.

Troll somewhere else why dontcha.

lardboy · 23-03-2011 02:40PM

leeroybrown wrote: »

The people who have them made a smart financial choice

No, they made a lucky choice. Nobody knew there would be a worldwide ZIRP, especially the banks. If the first central bank to act had raised rates and everyone had followed, then this would just be about fixed vs variable/tracker.

Onikage · 23-03-2011 02:49PM

eamo12 wrote: »

Variable rate mortgages (not fixed variable) will always be more than tracker rates

Wrong.

BeardyFunzo · 23-03-2011 02:54PM

Coming soon, riding on a wave of ignorance and hysteria, the

TRACKER MORTGAGE LEVY!

It worked for the public service! This is how the public sector pay cuts got started- a few letters here and there to various newspapers, a few commentators on the odd drive time radio show. Luckily, judging by the thread here, a move like that won't fly.

I know my self I'd be getting awful litigious if they try to do anything about trackers other than leave them be.

To the OP

A contract is a contract is a contract.

If it didn't work out for you, tough ti**ies. If the shoe were on the other foot you* wouldn't give two flying fecks about me. So I don't give a feck about you.

*The 'you' not referring to you personally rather than the group that we will see becoming increasingly vocal over the next year or so

BaZmO* · 23-03-2011 02:55PM

problemchimp wrote: »

I am certainly not middle class and my wife isn't even working class any more,

Huh?

seamus · 23-03-2011 02:55PM

lardboy wrote: »

No, they made a lucky choice. Nobody knew there would be a worldwide ZIRP, especially the banks. If the first central bank to act had raised rates and everyone had followed, then this would just be about fixed vs variable/tracker.

Lucky, perhaps a good few were. I remember that tracker mortgages were always touted as a pseudo-fixed rate. You got the benefit of it not jumping all over the place but you would end up paying more than those on variable because the bank's variable rate would "always" been less than the ECB's rate + tracker %. The Irish banks were sold to people as bedrocks of fiscal stability and Irish growth whereas the ECB was a German monolith so the tracker would always ride above the variable.

I took a tracker because I looked at it and decided I was happy to pay an extra fixed % over the ECB rate for some stability so as not to be at the mercy of whatever variable rate the bank wanted to apply. And I was right (whether getting a mortgage at all was a good idea is another discussion

).

It's all swings and roundabouts. In ten years' time the ECB rate could be at 4.5% with banks charging 4.9% variable on mortgages and people on trackers will be complaining about how they're being overcharged.

Sponge Bob · 23-03-2011 03:05PM

Of the 800k mortagages in Ireland

400k are on trackers.
200k are fixed
200k are variable.

The latter group are those who either

a) chose to get a mortgage in a falling market post 2008

or

b) had a pre 2008 mortgage and could have gotten a tracker

That is in the main. Completely underserving of any sympathy.

There are 2 further categories

a) Those who escaped from sub prime to standard variable remortgage in which case they are MUCH better off and
b) Those who came off a fix post 2008 and did not havea tracker option then.

Overall though the majority of variable rate customers could have and should have known better. I have no sympathy for that whinger in Clare or indeed for any poster who starts a thread supporting the whinger.

The Orb · 23-03-2011 03:08PM

eamo12 wrote: »

Interesting letter below to a Clare newspaper:

The ruling classes must all be on tracker mortgages, these subprime remnants of the Celtic tiger era

Do you know what a subprime mortgage is?
Do you know what a tracker mortgage is?

I suggest you learn the difference.

leeroybrown · 23-03-2011 03:17PM

lardboy wrote: »

No, they made a lucky choice. Nobody knew there would be a worldwide ZIRP, especially the banks. If the first central bank to act had raised rates and everyone had followed, then this would just be about fixed vs variable/tracker.

I disagree. Some were lucky but many people listened to their financial/lending adviser when they got their mortgage and decided that the semi-fixed nature of a tracker suited them in the long term. Trackers were the most popular mortgage option for most of the time they were being offered.

Personally, I went with a variable rate mortgage with a very good discounted fixed rate for a number of years. There was a period when in hindsight I should have switched to a tracker but I had other priorities on my mind and missed the boat on it. I'm not in any way bitter about it or begrudging of my friends who do have lower interest payments because of it.

Anyone else pi$$ed of at subsiding tracker mortgages?

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