TRS should be retained!

P

Paul Reilly

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For people who took out a mortgage 2004 to 2008 TRS runs out on 31 Dec 2017. After this date they pay 150 more a month.

FF are going to extend this to 2020.
Sinn Fein will bring in a mortgage cap

FG nothing
Labour nothing
 
Why would they extend TRS? That would assist only those people eligible to claim TRS (not people who took out a mortgage in the last few years, etc.) and would cost the taxpayer.

Nudging the banks to decrease profit margins on variable rate mortgages would at least only be costing the banks. Doubt that will happen either, though rates may continue falling a bit.
 
Paul Reilly said:
For people who took out a mortgage 2004 to 2008 TRS runs out on 31 Dec 2017. After this date they pay 150 more a month.

FF are going to extend this to 2020.
Click to expand...

So essentially FF are promising to lower Mortgage interest rates and extend TRS. Interesting days ahead??????????????.
 
I can possibly see some value to some sort of special social welfare assistance to people whose mortgages are sustainable with TRS, but unsustainable without, but that is surely a tiny fraction of borrowers (most will either be able to absorb the hit, or are already unsustainable).

Realistically, extending TRS would just be a subsidy to people who happened to take out their mortgage at a particular time. There are greater housing problems (the supply issue, in particular); the government would be better spending its money there if anywhere.
 
Worst Pigeon your completely right

im only looking at things that relate to my mortgage

there are countless problems with mortgages especially variables and housing is a huge problem

but certainly some parties dont seem to recognise the mortgage crisis as much as others.

If the Stock Market crashes long term Irelands "Fiscal Space" becomes reduced and then we run into all sorts of economic problems
 
I have a niece who is married who took out a mortgage (jointly) with her husband in 2004. They have a combined income of over €130k. Their current rate is 3.7%. Original mortgage €300k. Value of house now about €380k. Mortgage always paid up P & I. Term of Loan 20 years. The rental rate for the house would be about €1700 per month.
Their current situation would be that the outstanding balance would be around €160k
Their P & I would be approximately €23,250.00 per year of which €5,750 would be interest (Less TRS). They are availing of TRS as far as I know.
If I project into 2020 they will be paying approximately (assuming a 3.7% rate) €3,500.00 interest per year and a mortgage balance of just under €90k.
I do not think there is any justification in they getting an extension of TRS whether they are related to me or not. It is one example that convinces me that extending the TRS out to 2020 is a populist gimmick. This is for mortgages that will be aged 12 to 16 years by 2020.
 
The points made above are valid but what for me is also valid is what Paul said about when TRS runs out people especially those on SVR'S will be paying that extra money, Paul mentions €150/month. It might not be that for everyone but for me the point is valid. As well as that WHEN not if the ECB starts to up the rates as far as I'm concerned I for one will take a lot of convincing that the bank's will only up the tracker rates. For me they'll also up the variables to maintain the differential between the trackers and SVR'S that currently exists and that will put a lot of people under severe strain with the form the banks have shown so far. Before anyone says to me thats business if that applied to the banks theyd be out of business by now, who'll help the people who are under strain to pay their mortgages then. Were already after bailing out the banks through our taxes like everyone else and were also largely responsible for getting back into profitability so i think a little TRS for these people would be the least that could be done for them, that or a rebate of some of the excess interest weve paid in the last few years when the state owned banks are sold. Paul mentioned a figure of 20000 houses, imagine the arrears and repossessions then and people think there's a crisis now.
 
Strongly disagree that the taxpayer should be asked to subsidise anybody's private debts.

In a country where over 1,000 children are in emergency homeless accommodation, there are much better uses for taxpayer funds. There is no justification for extending TRS.
 
As I said in my last posting agree with what you and others say re TRS but what do you do to try and avoid the potential situation I outlined in my last posting or do you just say tough and get on with it. I can see a lot of people struggling in the next few years and arrears and repossessions rising with the banks high SVR rates significantly helping to fuel this. Lack of competition and poor policy re repossessions isn't the fault of SVR mortgage holders but we're carrying the can for this. Also when TRS ends and the ECB raise rates etc to fuel this what do you propose should happen to help these people or is it a case of no bailout for you yere only the ordinary people just get on with finding the money that isn't going to be there for quite a few of them. If say Pauls figure of 20000 arrears and repossessions was true won't that cause more hassle for the banks and consequently the state.
 
I simply don't agree that the taxpayer should ever be expected to subsidise anybody's private debts. So, yes, if somebody takes out a loan then they should get on with paying it back without expecting a dig out from their neighbours.

It's a question of priorities and I believe there are far more pressing calls on the exchequer's resources.
 
Fair enough,I just hope that I'm wrong and my fears about the future and the potential for arrears and repossessions are unfounded and that the vast majority will be ok and able to withstand the loss of TRS and higher rates and pay their mortgages. I really hope people can be ok and meet their responsibilities but I really don't think my fears are unfounded. I would like to hear you're opinion and anyone else's opinions on this because I really do see problems down the line.
 
Ultimately, the solution isn't to pour tax money into subsidising these mortgages (and when it comes to it, that's all that extending TRS would be). For the immediate future, rates look flat or declining (for those on variable rates; those on trackers obviously already have ridiculously low rates). And for now, at least locally, things are going okay economically. Income tax is also unlikely to be going up any time soon. The majority of people currently receiving TRS should be able to manage its loss; if they can't, they'd likely already have been in arrears with the higher rates, higher taxes, and worse employment prospects of the last few years.

And when it comes to it, extending TRS wouldn't be free. The money would have to come from somewhere, so either taxes go up, or don't go down as much as they might (depending on how revenues go), or services are cut. Either way, someone suffers. It's not like people whose TRS is about to expire are the only people in the country.
 
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its obvious some people here are affiliated to political parties and fair enough.

however.

Of all the mortgages in Ireland in the next 5 years
Fixed Rate mortgages will remain similar or decrease slightly due to competition
People on a variable rate in positive equity will have about 3.7% interest rate which is going to decrease in the coming years as their LTV decreases more.
People on trackers are paying are large percentage less than everyone and good luck to them
People on Variables in negative equity
1. Dont get low rate SVR of 3.7% they pay 4.3%
2. Have to subsidise loss making trackers/bailout the banks
3. Will lose their TRS in 2017 and pay UP TO €150 more

The bottom line is only variable rates in negative equity need real help and TRS extension is the only way to Effectively do this.

This is probably what a Banks Books look like

Fixed Rate Mortgages 100m for example
Trackers (loss maker) 50m - we need to claw back that money
Variables 150m - including 50m extra to subsidise the existance of trackers

warning: figures quoted above are for example purposes only but to illustrate the point

Sadly no one on the rte debate seems to care about mortgages because they know if they discuss there is no answer as banks have us all including politicians by the liathroidi
 
@Paul Reilly. I have a SVR with EBS which I took out in 2007 and as such I am getting the extended TRS. My rate is currently 3.7% and this is not related to whether or not I have any equity. EBS do not adjust your mortgage rate when you gain equity. Indeed it is only within the last 12 months that I have any possible equity (mortgage of €122k, potential sale price of €125k) and I only gained this by paying large amounts of savings into the account. I do not have enough equity to allow me to switch mortgage providers.

I am not in favour of extending TRS and I do not have any political affiliations as you may suggest. I feel it would be more beneficial to a wider group of people to have a fair SVR rate as per Brendan's high SVR campaign, than to extend TRS to a specific group. If the rate were made 'fairer' and the banks made to implement it for current customers, it would benefit people in your position. The cost would then be on the bank rather than subsidised by the taxpayer.
 
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Paul Reilly said:
its obvious some people here are affiliated to political parties and fair enough.
Click to expand...

If you're talking about me, well, no, I'm certainly not affiliated with a political party. Not even sure who I'm going to vote for; used to be a Labour voter, but, well, you know how it is. One can disagree with extending TRS without sinister political motivations, you know. I disagree with it because it's an inefficient way to address the problem, and because the problem is hardly the country's most critical one right now.

Paul Reilly said:
however.

Of all the mortgages in Ireland in the next 5 years
...
Click to expand...

This doesn't seem relevant. We're not talking about all mortgages in Ireland in the next five years, we're talking about mortgages taken out 2004-2012, of which 2004-2008 are the main concern as they got a higher rate of TRS, and are more likely to be in trouble (I would think most people who bought in at least 2011 and 2012 are now in positive equity, and from 2009 on rules had tightened up to the extent that most people weren't getting silly mortgages). Mortgages taken out before 2004 had their TRS expire years ago, those taken out after 2012 don't get TRS at all.

So, we're really talking about people who bought 2004-2008. As far as I know, most of the mortgages issued in that period were trackers.

Paul Reilly said:
The bottom line is only variable rates in negative equity need real help and TRS extension is the only way to Effectively do this.
Click to expand...

No; _some_ people on variable rates in negative equity need real help. Many of them are just fine; bear in mind that 2004 was _12 years ago_. Many of them will make more money now than they did then; some will even have been prudent and only taken out a mortgage that they could easily afford! Some will have been overpaying their capital and will thus have lower mandatory repayments now anyway, and may not even be in negative

As I said earlier, I think there might be an argument for some form of social welfare assistance to those people who the removal of TRS pushes over the edge. Though even then it doesn't seem ultra-high-priority; generally, even if these people fail to make full repayments, they likely won't lose their homes. Repossessions remain very rare. There are also solutions available from the banks (warehousing etc.) though I'm not keen on how seemingly arbitrarily these are handed out. On the other hand, there are people being kicked out of their homes every day as rents increase.

I'm not convinced that the minority of mortgage holders from 2004-2008 who are actually in trouble should be the first priority for assistance, and I certainly don't think just giving everyone who had a mortgage in an eight year period money essentially forever is any sort of solution.
 
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I can keep replying

But I just dont agree with those assumptions

Variable Mortgage s in Ireland are a huge problem. I have contacted Michael Noonan; Enda Kenny and Joan Burton and Michael McGrath on numerous occasions.

Michael Noonan told me he was meeting the bank last year to force them to reduce Variable Rates. He did. They budged slightly as mortgages have decreased slightly.
Instead of paying about 200 euro more than European Rates we now pay 190euro.

Why is this? I want to know why I have to pay 190euro more than a person with a similar mortgage in Europe. What is the breakdown of this extra cost.

Surely an independent auditor needs to be sent to the banks to breakdown the extra 2percent cost on Variables and where it goes.

Im going to torment whoever gets into government until I get an answer clearly stating where this money goes.

In shops n stores they breakdown the costs in accounts to give a true and fair view. So why not banks?
 
Personally speaking I don't see why the government should extend the TRS, it was extended to help people who bought during the 04/08 period.
If now 8 years later you cant afford the repayments because you cant avail of the TRS which was extended once already then you have an unsustainable mortgage.
This unsustainable mortgage is your concern and not the concern of the general tax payer who have their own problems.

I do agree that the SVR is on the high side and when compared to Europe we seem to be paying over and above and I do agree the difference is helping the banks balance the losses on the trackers but at the end of the day, the banks are not a charity but money lenders and they will charge what they like and we the customers have no choice but to pay even though we the tax payer did bail them out and keep them in the jobs that they shouldn't have kept.
 
if trs is being extended I want in on the action. I drew down mortgage last yr and would love some relief on it.
 
FWIW, mortgage interest relief was completely abolished in the UK by Gordon Brown in 2000 on the basis that it was an unjustifiable middle class perk.
 
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