ECB cuts rate to 1.25%

Head The Wall · 07-11-2011 02:32PM

bryaner wrote: »

Jaysus I was right.

Yes I am definitely jealous of people with mortgages, hold on that was directed at you

woodoo · 07-11-2011 02:33PM

Welease wrote: »

I am not going to start throwing personal insults around, they won't help to develop any discussion..

I was trying to point out that when they called other posters opinions "uneducated stupid" that he/she was in fact incorrect..

However it does appear to be a complete waste of time.. Somewhat shocking considering the amount of available information on the problems trackers are causing Irish banks..

It wasn't an insult. He is just supremely confident in his own point of view.;)

Madd Finn · 07-11-2011 02:40PM

Tazz T wrote: »

BTW, Madd Finn, I'm on a tracker and not a begrudger like you. I'm not subsidising your variable rate. The bank simply knows it can penalise you. You choose your service, you pay your price, matey! Don't blame me.

You're damn right you're not subsidising my variable rate. It's the other way round.

I'm not blaming you for it. Just stating a simple fact. People on variable rates are effectively subsidising those on trackers.

At the moment.

But that could change.

bryaner · 07-11-2011 03:06PM

Head The Wall wrote: »

Yes I am definitely jealous of people with mortgages, hold on that was directed at you

My god you really are like the spoilt brat in the playground, just to let you know I got my mortgage in 96 it's nearly finished and costing sfa now.

bamboozle · 07-11-2011 03:07PM

Madd Finn wrote: »

You're damn right you're not subsidising my variable rate. It's the other way round.

I'm not blaming you for it. Just stating a simple fact. People on variable rates are effectively subsidising those on trackers.

At the moment.

But that could change.

how could it change?

woodoo · 07-11-2011 03:08PM

Madd Finn wrote: »

You're damn right you're not subsidising my variable rate. It's the other way round.

I'm not blaming you for it. Just stating a simple fact. People on variable rates are effectively subsidising those on trackers.

At the moment.

But that could change.

Trackers were a thing of the past when i took out my mortgage. I'd have loved one.

Bruthal · 07-11-2011 03:13PM

bryaner wrote: »

Head The Wall wrote: »

Incorrect and jealous, that makes me feel better

Jaysus I was right.

Looks like it alright,

Bruthal · 07-11-2011 03:23PM

bamboozle wrote: »

Head The Wall wrote: »

There's nothing to be cheering about really, yes it's a cut in what you're paying but it's still an overpriced mortgage in the majority of cases.

Will any of ye save more than the people like myself who have been saving the last few years and will get a house at a lot cheaper price, I think not. I have something to be happy about

eh yes there is, reduced ECB rate means more money in the pockets of Tracker Mortgage holders and variable mortgage holders for the banks who are passing the saving on.

the second point of your post is irrelevent to a drop in ECB rates (and quite petty)

A but your saving from the rate change is smaller than Head The Wall`s, so yours, mine, and everyone elses is no good.

Where would ye hear the likes of that rubbish.

Id say everone in ireland is jealous of him/her

07-11-2011 03:24PM

Head The Wall wrote: »

Well considering I'll be looking for 50-70k over 10 years I reckon I'll be way better off in the long run. Six figure savings go a long way

And you've been living where for the last 10 years?

10 years of renting eats into that 6 figure sum you are babbling on about. Unless you live with Mummy and Daddy for free.

As with many folk who throw out the "I was too smart to buy during the boom ..." bla bla bla the reality is you were probably earning sh1t money in a sh1t job and couldn't afford it.

Also as with many of these type of genius' you will never have the balls to buy a house as you'll be afraid buying at the wrong time.

fliball123 · 07-11-2011 03:29PM

woodoo wrote: »

Filiball has no history of taking any new info on board. I think he formed some opinions about 5 years ago and its impossible to move him away from them no matter how much sense is put his way.

Well let me ask you this show me where this money is that I am supposedly getting from the non tracker variable mortgage holders??

Let me ask you another question

When the bank gave me my tracker...do you think they intended to make a loss on it??? Answer obviously not...Otherwise they would not of given me the mortgage...
So what people who have non tracker variable mortgages are paying for are the following 2 things..

1: they are paying for decisions that the bank made after they gave me my mortgage...

2: they are paying for their own decision not to change to a tracker or to a fixed rate mortgage

So look at those 2 things and look at the people who made those decisions where they tracker mortgage holders no...it was yourselves and banks so go beat each other up

Bruthal · 07-11-2011 03:36PM

RoverJames wrote: »

And you've been living where for the last 10 years?

10 years of renting eats into that 6 figure sum you are babbling on about. Unless you live with Mummy and Daddy for free.

As with many folk who throw out the "I was too smart to buy during the boom ..." bla bla bla the reality is you were probably earning sh1t money in a sh1t job and couldn't afford it.

Also as with many of these type of genius' you will never have the balls to buy a house as you'll be afraid buying at the wrong time.

Id say that about sums it up. Plenty who didnt buy during the last 10 years didnt because they were not in a position to, and now they come forth with their genial claims.

Godge · 07-11-2011 03:59PM

SBWife wrote: »

Pot kettle black.

You are being subsidised if you have a tracker because the bank's cost of funds is higher than the interest rate you are being charged on your mortgage. The market for funds has changed in such a way that the margin above the ECB rate included in most tracker mortgage no longer covers the difference between the actual cost of funding for the banks and the ECB rate.

Being subsidised is the wrong word. the bank is making a loss at the moment on filiball's loan because the bank made a stupid business decision to lend him money at the ECB rate plus a small percentage.

And "at the moment" is the key thing. Let's say that the Euro runs into serious trouble in about a year's time. In order to protect it, the ECB puts rates up to 5 or 6% for a temporary. Filiball's tracker mortgage follows the ECB as it must but banks decide not to increase deposit or variable mortgage rates because they fear the effects on the economy. All of a sudden, the tracker mortgage doesn't look so good and to use your word, the tracker mortgage is "subsidising" the variable mortgage. Now that is an unlikely scenario at the moment but it could happen. Would you be leading the charge to let tracker mortgage holders switch to variable rates then? I think not.

Filiball made a business decision - took out a tracker mortgage on a house he thought he could afford. Head the Wall took a business decision - houses are too expensive, will save money. others took a business decision - bought an expensive house on a variable rate mortgage.

If inflation wipes out Head the Wall's savings - tough. If the ECB rate goes to 20% and filiball defaults and loses his house - tough. If others don't like their variable rate mortgage - tough. You all took business decisions, some of you poorly advised, poorly thought out or unlucky, others lucky, brilliantly thought out or negotiated but that is what business is about. There are ups and downs. And the ups and downs are not finished yet.

Anyone can see that we are not out of the crisis yet. I have spent the last few years paying down any debt other than mortgage debt (credit card, holiday loan, credit union loan, car loan which I stupidly took out in the good times) and they are mostly gone. The next step is to save some money in case the interest rate on my tracker mortgage (one of my good decisions) leaps up so I can pay off a lump sum on it (I can get more for saving now than I pay on the tracker rate). It has meant some serious lifestyle cutbacks (on top of the tax increases and everything else). It will look like a stupid business decision if the economy rebounds, taxes go back down and my pay rises but a good business decision if the bottom continues to fall out of the economy.

fliball123 · 07-11-2011 04:06PM

Godge wrote: »

Being subsidised is the wrong word. the bank is making a loss at the moment on filiball's loan because the bank made a stupid business decision to lend him money at the ECB rate plus a small percentage.

And "at the moment" is the key thing. Let's say that the Euro runs into serious trouble in about a year's time. In order to protect it, the ECB puts rates up to 5 or 6% for a temporary. Filiball's tracker mortgage follows the ECB as it must but banks decide not to increase deposit or variable mortgage rates because they fear the effects on the economy. All of a sudden, the tracker mortgage doesn't look so good and to use your word, the tracker mortgage is "subsidising" the variable mortgage. Now that is an unlikely scenario at the moment but it could happen. Would you be leading the charge to let tracker mortgage holders switch to variable rates then? I think not.

Filiball made a business decision - took out a tracker mortgage on a house he thought he could afford. Head the Wall took a business decision - houses are too expensive, will save money. others took a business decision - bought an expensive house on a variable rate mortgage.

If inflation wipes out Head the Wall's savings - tough. If the ECB rate goes to 20% and filiball defaults and loses his house - tough. If others don't like their variable rate mortgage - tough. You all took business decisions, some of you poorly advised, poorly thought out or unlucky, others lucky, brilliantly thought out or negotiated but that is what business is about. There are ups and downs. And the ups and downs are not finished yet.

Anyone can see that we are not out of the crisis yet. I have spent the last few years paying down any debt other than mortgage debt (credit card, holiday loan, credit union loan, car loan which I stupidly took out in the good times) and they are mostly gone. The next step is to save some money in case the interest rate on my tracker mortgage (one of my good decisions) leaps up so I can pay off a lump sum on it (I can get more for saving now than I pay on the tracker rate). It has meant some serious lifestyle cutbacks (on top of the tax increases and everything else). It will look like a stupid business decision if the economy rebounds, taxes go back down and my pay rises but a good business decision if the bottom continues to fall out of the economy.

Could not have put it better Godge

Welease · 07-11-2011 04:11PM

fliball123 wrote: »

Well let me ask you this show me where this money is that I am supposedly getting from the non tracker variable mortgage holders??

Let me ask you another question

When the bank gave me my tracker...do you think they intended to make a loss on it??? Answer obviously not...Otherwise they would not of given me the mortgage...
So what people who have non tracker variable mortgages are paying for are the following 2 things..

1: they are paying for decisions that the bank made after they gave me my mortgage...

2: they are paying for their own decision not to change to a tracker or to a fixed rate mortgage

So look at those 2 things and look at the people who made those decisions where they tracker mortgage holders no...it was yourselves and banks so go beat each other up

I think you guys are just using different versions of the word "subsidised", and that is part of the confusion.. I am talking about banks making losses on trackers.

From your post you admit that the bank are making a loss on your tracker.. therefore (at present) you cannot be paying back the full cost of your mortgage.. If you were, then the bank could not and would not be making a loss on it.. therefore people are correct in using the particular term subsidised with regards to the bank balance sheets.

The trackers and other losses are being subsidised by a variety of methods, including the taxes you pay via the bank bailouts.. So your are likely also subsidising yourself via other means.

As with all things, no rates are set in stone and the situation can change in the future.

fliball123 · 07-11-2011 04:28PM

Welease wrote: »

I think you guys are just using different versions of the word "subsidised", and that is part of the confusion.. I am talking about banks making losses on trackers.

From your post you admit that the bank are making a loss on your tracker.. therefore (at present) you cannot be paying back the full cost of your mortgage.. If you were, then the bank could not and would not be making a loss on it.. therefore people are correct in using the particular term subsidised with regards to the bank balance sheets.

The trackers and other losses are being subsidised by a variety of methods, including the taxes you pay via the bank bailouts.. So your are likely also subsidising yourself via other means.

As with all things, no rates are set in stone and the situation can change in the future.

Answer my 2 questions?

Welease · 07-11-2011 04:39PM

fliball123 wrote: »

Answer my 2 questions?

The answer to both is correct.. So what?

It doesn't change the fact that Trackers are currently making a loss for the banks, so your assessment that you are paying the full complete cost of your mortgage is currently incorrect..

fliball123 · 07-11-2011 04:41PM

Welease wrote: »

The answer to both is correct.. So what?

It doesn't change the fact that Trackers are currently making a loss for the banks, so your assessment that you are paying the full complete cost of your mortgage is currently incorrect..

Yeap you said it is making a loss for the bank lets bold that...now did the tracker mortgage holders put a gun to the head of bankers telling them not to pass on interest rate cuts or to up the variable rate??? No

Welease · 07-11-2011 04:48PM

fliball123 wrote: »

Yeap you said it is making a loss for the bank lets bold that...now did the tracker mortgage holders put a gun to the head of bankers telling them not to pass on interest rate cuts or to up the variable rate??? No

Noone is discussing where the fault lies, and that has been clarified several times by several posters!.. So stop trying to divert.

You called the previous poster's comment stupid / uneducated...

fliball123 wrote: »

This kinda uneducated stupid comment drives me mad...how is anyone else subsidising a person with a tracker...

For example..

If I have a tracker and I owe 100 Euros and I pay back this 100 Euros with what ever interest then its obvious that I am subsidising my own mortgage to the full amount and paying interest

If the bank is making a loss on a tracker, then the tracker owner is not paying the full amount of the mortgage costs to the bank...

If you want to argue where the fault lies, then I suggest you post such....

bbsrs · 07-11-2011 04:51PM

Welease wrote: »

Those bad decisions (and various other factors) have caused trackers to be underfunded...ergo.. in order for banks to balance their books those funds need to be subsidised by other funds (i.e. variable mortgages)..

This really isn't that complicated.

Using the word Subsidised in this case is incorrect.
Anyway , because a business is making a loss on a bad contract it entered into you cannot say that another more prosperous contract it entered into is subsidisng the loss making one .they are separate contracts in their own rights . Thats what risk is all about good decisions and bad.Its the balance sheet at the end of the year that counts and in hard economic times the banks will turn the screw where ever they can to improve the balance sheets. If there were no trackers we would all be paying the maximum they could get away with charging . Do you think they would drop the variable rate in the morning if they were allowed to turn all trackers into variables , I think not .

bamboozle · 07-11-2011 05:01PM

bbsrs wrote: »

Using the word Subsidised in this case is incorrect.
Anyway , because a business is making a loss on a bad contract it entered into you cannot say that another more prosperous contract it entered into is subsidisng the loss making one .they are separate contracts in their own rights . Thats what risk is all about good decisions and bad.Its the balance sheet at the end of the year that counts and in hard economic times the banks will turn the screw where ever they can to improve the balance sheets. If there were no trackers we would all be paying the maximum they could get away with charging . Do you think they would drop the variable rate in the morning if they were allowed to turn all trackers into variables , I think not .

well explained.

unfortunately some people just have it in their heads that tracker mortgages are screwing variable mortgages and that's that.

Welease · 07-11-2011 05:02PM

bbsrs wrote: »

Using the word Subsidised in this case is incorrect.

Care to elaborate why?

A dictionary reference shows Subsidize as "pay part of the cost"..
In this case, it can be argued that in order to balance the banks books which is the primary focus of this government unfortunately, various alternatives (incl. variable mortgages, government funding etc.) are being used to "pay part of the costs" of bad decisions regarding development loans, mortgages etc.

Welease · 07-11-2011 05:04PM

bamboozle wrote: »

well explained.

unfortunately some people just have it in their heads that tracker mortgages are screwing variable mortgages and that's that.

I don't think thats the case at all..

Fliball is maintaining that they are funding 100% of the cost of their mortgage via their tracker payments. I am argueing that that is incorrect, and have show why..

Do you believe that a tracker owner is paying the full cost of their mortgage currently? (and as people seem to be getting bend out of shape, I am and have stated several times the owner of a tracker mortgage).

kippy · 07-11-2011 05:31PM

Yet again we appear to have a mentality of them and us, those on trackers and those on variables. There's a bit of a media storm portraying a "war" between both sets of people. Essentially blaming those on trackers for the higher variable rates.
I'm not sure where this image came from or what PR company working for what bank actually began this angle but it sure is working.

It's not the fault of those on trackers that the variable rates have and are going up.
Again it is the fault of the banks and probably more so the regulator or past regulator that the banks are in the state they are in now.

Banks are exceptionally good at crying when things don't suit them but one cannot blame those who have tracker mortgages for the banks woes. Those were business decisions taken at the time.
Were the tables turned I doubt very much those people on tracker mortgages paying 5-7 % would get "subsidised" by other mortgage payers or even any sympathy from the banks.

Either way, as I mentioned above, whatever people are "gaining" on trackers, they are getting well screwed for somewhere else.

bamboozle · 07-11-2011 05:45PM

Welease wrote: »

I don't think thats the case at all..

Fliball is maintaining that they are funding 100% of the cost of their mortgage via their tracker payments. I am argueing that that is incorrect, and have show why..

Do you believe that a tracker owner is paying the full cost of their mortgage currently? (and as people seem to be getting bend out of shape, I am and have stated several times the owner of a tracker mortgage).

yes, but i think you need to differentiate between the funding cost to the bank and the repayment cost to the mortgage holder, there's a big difference and all the mortgage holder of a tracker needs to care about is the cost to them.

however do i believe the banks are making a profit on tracker mortgages? no.

my mortgage is half tracker half variable per my contract, i'm paying my mortgage costs per the contract, unfortunately the bank are probably losing money on this contract.

bbsrs · 07-11-2011 05:50PM

Welease wrote: »

Care to elaborate why?

A dictionary reference shows Subsidize as "pay part of the cost"..
In this case, it can be argued that in order to balance the banks books which is the primary focus of this government unfortunately, various alternatives (incl. variable mortgages, government funding etc.) are being used to "pay part of the costs" of bad decisions regarding development loans, mortgages etc.

Balancing the books and subsidizing are two different things.

A subsidy would be a formal arrangement put in place to pay part of the cost of something like farming subsidies to subsidize the cost of producing food to make it a viable business for the producer and keep prices from fluctuating .

Balancing the book has to be done there is no choice unless you want to go out of business . You don't subsidise your losses with your profits you just absorb them and hope by maximising profits in your profitable ventures you can outweigh your unprofitable ones.

fliball123 · 07-11-2011 06:03PM

Welease wrote: »

Noone is discussing where the fault lies, and that has been clarified several times by several posters!.. So stop trying to divert.

You called the previous poster's comment stupid / uneducated...

If the bank is making a loss on a tracker, then the tracker owner is not paying the full amount of the mortgage costs to the bank...

If you want to argue where the fault lies, then I suggest you post such....

what I am argueing is that I get a loan/mortgage which I will pay back in full with interest how is anyone else subsidising that loan...The reality is that you are subsidising decisions that the bank made after the the tracker mortgages option stopped....

fliball123 · 07-11-2011 06:09PM

Welease wrote: »

I don't think thats the case at all..

Fliball is maintaining that they are funding 100% of the cost of their mortgage via their tracker payments. I am argueing that that is incorrect, and have show why..

Do you believe that a tracker owner is paying the full cost of their mortgage currently? (and as people seem to be getting bend out of shape, I am and have stated several times the owner of a tracker mortgage).

Where did I say that ???? I said I got a loan..I am paying back the amount 100% and I am paying interest...so no one is subsidising my mortgage...whatever the costs of this are , they are not down to my mortgage they are down to the bank so I maintain people on variable non trackers are subsidising actions that the banks have made

Godge · 07-11-2011 06:09PM

Welease wrote: »

I don't think thats the case at all..

Fliball is maintaining that they are funding 100% of the cost of their mortgage via their tracker payments. I am argueing that that is incorrect, and have show why..

Do you believe that a tracker owner is paying the full cost of their mortgage currently? (and as people seem to be getting bend out of shape, I am and have stated several times the owner of a tracker mortgage).

Strictly speaking filiball is correct. At the time that filiball took out his mortgage, the bank advanced money to whoever was selling the house to him. The bank was able to get this money at that point in time at a very cheap interbank rate, below the ECB rate. Therefore, it was making a clear profit on filiball. The bank paid a very low rate for that money and filiball is paying it back at a higher rate. He is therefore paying back the full 100% cost of the mortgage plus a profit to the bank.

The problem for the bank is that the interbank rate has gone above the ECB rate and the bank cannot get money as cheaply any more and it needs to pay a decent rate to depositers and funders which is more than
filiball is giving them back. Tough for the bank but that is a problem which is not filiball's.

Welease · 07-11-2011 06:09PM

bamboozle wrote: »

yes, but i think you need to differentiate between the funding cost to the bank and the repayment cost to the mortgage holder, there's a big difference and all the mortgage holder of a tracker needs to care about is the cost to them.

however do i believe the banks are making a profit on tracker mortgages? no.

my mortgage is half tracker half variable per my contract, i'm paying my mortgage costs per the contract, unfortunately the bank are probably losing money on this contract.

Exactly.. so therefore to go back the the point I was making to Fliball. and one they refuse to accept

fliball123 wrote: »

This kinda uneducated stupid comment drives me mad...how is anyone else subsidising a person with a tracker...

For example..

If I have a tracker and I owe 100 Euros and I pay back this 100 Euros with what ever interest then its obvious that I am subsidising my own mortgage to the full amount and paying interest...

Would you agree (that at present).. the above statement is incorrect?
If the bank is making a loss on trackers, it then the tracker owner cannot be paying the "full amount" irreprective of who said what, or who's fault it was..

fliball123 · 07-11-2011 06:17PM

Welease wrote: »

Exactly.. so therefore to go back the the point I was making to Fliball. and one they refuse to accept

Would you agree (that at present).. the above statement is incorrect?
If the bank is making a loss on trackers, it then the tracker owner cannot be paying the "full amount" irreprective of who said what, or who's fault it was..

prove it to me..you show me how I am not paying the full amount plus interest on my mortgage???....show me where the money from variable rates are paying the money onto my mortgage

Actually answer this say the ECB ups its rates to 10% and all tracker are increased accordingly are you still subsidising my mortgage

ECB cuts rate to 1.25%

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