ptsb increases their SVR on home loans by 0.16%

Brendan Burgess

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Tuesday 29th April 2014

SVR Rates
permanent tsb announces that it will change its Standard Variable Rate (SVR) for existing homeloan mortgage customers from 4.34% to 4.50% from June 9th – an increase of 0.16%. SVR customers in permanent tsb have an average outstanding mortgage of approximately €80,000 and the move will mean an increase in monthly repayment of approximately €7 per month (for a customer with a remaining term of 20 years).

This is the first increase in the SVR for permanent tsb homeloan customers in over 3 years (since March 2011). The change to the rate reflects the bank’s funding costs. Despite the change, however, permanent tsb’s SVR is still on a par with most other lenders.

The SVR for existing buy-to-let customers will also increase by 0.16%. Customers with tracker, fixed-rate and BTL Managed Variable Rate mortgages are not affected.


New Business Rates
The rates for Managed Variable Homeloan Customers (ie; new customers or customers who took out a mortgage in the past 12 months and whose rate varies depending on the loan-to-value (LTV) of the relevant property) will see a blended increase of 0.12% from the same date (June 9th)
 
The ECB rate is dropping to 0% supposedly in July. Are the banks borrowing money at 0.5% . They are making it seem small by saying that it is 7 euro a month but that is for an 80,000 euro loan. That's the average mortgage in their bank.
Are they having a laugh.
 
PTSB putting their variable rate up is an action which puts a shudder down the spines of thousands of their helpless customers - given their track record.

Is there any views on what the strategy will be for banks with the variable rate? Seems to be creeping up slowly while the EC rate goes even lower.

Will the variable rate go even higher once the EC rate eventually increases? This must be the crucial question??
 
As they are still towards the lower end of the table, there isn't that much people can do about ptsb in particular.

However, it could well be worth asking if the banks generally should be charging such high Standard Variable Rates when the ECB rate is 0.25%

Brendan
 
Hi all
A few helpful stats on current lending prices from Bank of Ireland recently revealed
BOI current Cost of capital is 1.26%
Tracker mortgage book in BOI is 17bn, yielding 1.30% versus their cost of funds of 1.26% (no longer a drag on margins)
AIB cost of funds is approx. 1.75% current
The PTSB announcement tells me that the ECB rate will be cut and PTSB are getting in early with their increase, profit drive is what it is clearly. The margins on SVR loans is very high at present and the question remains is when will the lenders decrease their rates.
Some Example of rates elsewhere currently available in the UK HSBC UK Tracker UK base 0.5% plus 1.49%; Santander Tracker Base 0.5% plus 1.99% interest only full term of the loan. The sooner another lender moves into Ireland the better as it is only then we will see SVR rates reduce until then we are at the mercy once again of our banks. Or maybe Mr Noonan will take some control of the issue as representative of the owners namely us, as it cannot continue for long more for a large set of people out there.
Just my thoughts
Padraic
 
They are sucking the life out of SVR mortgage holders again to boost their profits. Micheal Noonan will do nothing like he always says we can't interfere. ECB rates going down and variable rates going up. Any banks doing switcher deals
 
Micheal Noonan will do nothing like he always says we can't interfere. ECB rates going down and variable rates going up.

Nor should he in my opinion. The system is broke at the moment but we should let it sort itself out - which it will eventually as each banks balance sheet improves and it decides to start to compete again. Government intervention is not a strategic solution.

Any banks doing switcher deals

I know that KBC are but, generally, the costs of switching outweigh the reduction in rates - especially when you consider the fact that all rates are variable so KBC could raise rates immediately after you switch.
 
Alas you are right Ronaldo. But I wish they had more options like LTV and fixed rates for long term customers.
 
They are sucking the life out of SVR mortgage holders again to boost their profits. Micheal Noonan will do nothing like he always says we can't interfere. ECB rates going down and variable rates going up. Any banks doing switcher deals

What profits!!!
 
Ok small increase, but really makes me nervous as to where the increases will go from here. Previously, they raised rates in increments from 4.65% in mid 2009 to 6.15% in mid 2011. So I am worried about what my rate will be in one to two years, but then I suppose I've had that worry before this latest hike. Just really hoping this isn't history repeating itself.

Hopefully it is just an earlier reaction to the likelihood of another ECB rate decrease.
 
I am not so sure that there is very little that can be done about this decision. There are 70,000 customers involved here. The statement from ptsb that this has small monetary impact is misleading. Compare your mortgage on SVR to that of tracker, calculate the interest cost, even over one year and you will see the huge cost the SVR customers are paying for the flawed tracker strategy of the past. Question the rate increase, ECB is at a historic low, yet there is a rate increase, what will happen when ECB rises ?. SVR customers already represent 51% of principal dwelling long term arrears this will continue to grow unless price promises such as those for tracker customers are put in place.
 
Ok small increase, but really makes me nervous as to where the increases will go from here. Previously, they raised rates in increments from 4.65% in mid 2009 to 6.15% in mid 2011. So I am worried about what my rate will be in one to two years, but then I suppose I've had that worry before this latest hike. Just really hoping this isn't history repeating itself.

Hopefully it is just an earlier reaction to the likelihood of another ECB rate decrease.

Which in itself would be scandalous!

Not only is there the fear this will be a series of incremental increases but what happens to variables when the ECB rate increases? Another excuse to increase?
 
The sooner another lender moves into Ireland the better as it is only then we will see SVR rates reduce until then we are at the mercy once again of our banks.
I'm surprised this hasn't happened yet. If a bank came in offering 3.5% on low loan to value mortgages they could cherry pick low risk mortgages and clean up.
 
I'm surprised this hasn't happened yet. If a bank came in offering 3.5% on low loan to value mortgages they could cherry pick low risk mortgages and clean up.

KBC are already offering 3.85% so I don't think it'll be too many more years before the other banks decide that the current high SVR's have improved their books enough to enable them to start offering a more competitive product.

With this in mind, I'd think long and hard before considering remortgaging and exposing myself to the fees involved - unless, of course, the savings were significant.
 
No external bank is going to come in until the non-recourse situation is sorted out. A few entrants did signal interest, but each time they realised it would be insane to give money away.
 
No external bank is going to come in until the non-recourse situation is sorted out. A few entrants did signal interest, but each time they realised it would be insane to give money away.

It still amazes me that mortgage rates are as low as they are, considering banks can't really enforce their security on properties in Ireland. Perhaps that will change over time.
 
Which in itself would be scandalous!

Not only is there the fear this will be a series of incremental increases but what happens to variables when the ECB rate increases? Another excuse to increase?

VR is a pot that the banks will keep coming back to. As they are a sitting duck for increases.
 
It still amazes me that mortgage rates are as low as they are, considering banks can't really enforce their security on properties in Ireland. Perhaps that will change over time.

Don't fall for this baloney being peddled by banks. Permanent TSB securitised €500m of mortgages paying 3 mth Euribor + 1.65% 6 months ago. Banks are struggling with margin but that's a legacy issue. PTSB are making a handsome profit on their SVR mortgage book.
 
Don't fall for this baloney being peddled by banks. Permanent TSB securitised €500m of mortgages paying 3 mth Euribor + 1.65% 6 months ago. Banks are struggling with margin but that's a legacy issue. PTSB are making a handsome profit on their SVR mortgage book.

I can't comment on the profit PTSB are making however high risks should come with high returns.
 
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