7% Mortgage Rate from PTSB subsidiary, Springboard

C

Catch

Guest
Hi,
My spouse and I have a mortgage with Springboard, as we did not qualify for mainstream lenders - we started off with Start, and moved to Springboard, for a slightly better rate, about 2 years ago. Now, however, Springboards rates seem to be going up well above what could be justified. The latest increases were a 1% increase in April, and a 0.25% increase in May. When I questioned them, they told me the 1% was an increase in their SV rate, and the 0.25% was to match the increase in the ECB rate. Are these rises justified, and more importantly, can they keep raising their rate at will? I'm concerned that they will raise the rate to a level that we simply can't pay. We are not in arrears at present. Can I get anything done about this, or am I stuck? Any help appreciated.
 
It sounds like you have a mortgage with a standard variabel rate (SVR). They get to set this rate arbitrarily, and unilaterally. If you think your property value is greater than the amount outstanding on the loan, then you can move your mortgage to someone with a better rate. This might be easier now if you have 2 years of good standing with your debts to your credit. If you are in negative equity, then it's pretty unlikely you'll be able to change from them.

In the longer term, the quicker you get away from these guys the better. If you could afford it, it would probably be to your financial advantage to pay something extra on this mortgage to get it lower as quickly as possible. When you get the loan to around 90% of the likely value of your property, start asking for quotes from other regular lenders.
 
I think it's very unlikely that if you were a customer of a sub-prime that you will find a prime lender to switch to.

PTSB raised their SVRs independently of any rise in the ECB rates, so Springboard can do it as well. (Springboard is a subsidiary of PTSB)

I think that they can do this within reason. So they can charge you 7%, but if they charged you 17%, a court would probably reject it.

Check the history of the rates you were charged. As Springboard will soon be state owned, you might be able to get some political pressure to stop them charging very high rates. I think that it might be reasonable for the shareholder to instruct PTSB to accept transfers from Springboard where the person has positive equity and, say, three years of no arrears.

Brendan
 
Brendan Burgess said:
I think that they can do this within reason. So they can charge you 7%, but if they charged you 17%, a court would probably reject it.
Click to expand...

Can I ask why? Are there any grounds you think might be a sound basis? I'm guessing the average SVR mortgage contract gives the lender a free hand here.

The only way I can see is for the financial regulator to ask for and exercise new powers to control this. This might well be required - with negative equity preventing customers taking their business elsewhere, lenders can take advantage.
 
I remember asking a solicitor about his practice in the Irish Nationwide. He advised me that they don't have an entirely free hand. I don't know the legal basis for it.
 
Brendan Burgess said:
I remember asking a solicitor about his practice in the Irish Nationwide. He advised me that they don't have an entirely free hand. I don't know the legal basis for it.
Click to expand...

I would suspect that they would start to fall foul of the Unfair Terms in Consumer Contracts (1995) Regulations.

[broken link removed]
 
You must log in or register to reply here.
Back
Top