EBS to discontinue 3 and 5 year fixed rates

S

sheena1

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I just found out that EBS are to discontinue offering 3 year and 5 year fixed rates to customers from Monday onwards. They are currently offering 4.99% fixed for 5years and 5.14% fixed for 3years. EBS didn't send any info to their customers about this and when I rang my local branch they confirmed that in future 10 year fixed rate will be the only option. I wonder what is the reasoning behind this? Do EBS not want their customers to fix? I am a little annoyed that customers were not informed!
 
sheena1 said:
I am a little annoyed that customers were not informed!
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Why do you think that they should inform customers of changes to the range of rates that they offer as a matter of course? Do other lenders do this?
 
Mortgage providers make good money on redemption figures on fixed rate mortgages. Some charge up to 6 months penalty interest. Thats enough of a reason to extend fixed rate terms.
By insisting on 10 year fixed, the EBS are effectively handcuffing the customer .
It is a disincentive to move for the customer.
How many of us can say with certainty that we will not move house within 10 years or wish to change mortgage providers?

I consider this action by the EBS as not being in the best interests of its members and customers.
 
Fixed rates aren't necessarily in the best interests of its customers.

There are many other lenders out there at the moment who will offer fixed rates.
 
As a first time buyer borrwing 100% 200k what would you say would be my best bet? fix or what - if so how long?
 
sherchar said:
As a first time buyer borrwing 100% 200k what would you say would be my best bet? fix or what - if so how long?
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Please don't drag the thread off topic-there are many existing and recent threads that address your question.
 
ClubMan said:
Why do you think that they should inform customers of changes to the range of rates that they offer as a matter of course? Do other lenders do this?
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I am not saying that every lending institution should advise all customers of every change to their rates and products. I do think however that EBS's decision to abolish the option for members to fix their mortgage in the short to medium term is significant enough that EBS should have made some public statement about it and alerted customers.
 
ClubMan said:
Why do you think that they should inform customers of changes to the range of rates that they offer as a matter of course? Do other lenders do this?
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I would say it would be good customer service. A rare thing these days.
 
sheena1 said:
I do think however that EBS's decision to abolish the option for members to fix their mortgage in the short to medium term is significant enough that EBS should have made some public statement about it and alerted customers.
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Financial institutions usually publicise changes in rates offered/charged in the public newspapers. Maybe EBS did this?
 
Ah thats crap wanted to take that 3yr fixed rate with them after a while! Oh well, stuck with the variable.
 
Not with an affordable home I cant. That said, cant have everything in life too!! So the good well outweigh the bad.
 
VOR said:
Some charge up to 6 months penalty interest.
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Al little know fact for consumers is that the Financial Institutions are only allowed to charge an MAXIMUM of 6 months interest or the economic cost of breakage (customer rate compared to the interbank rate).

If rates fell 2% overnight and you had a fixed rate of 4.99 for 5 years, you could in fact break the 5 year fixed at a cost of only 6 months interest which would lower than the economic cost to the bank. You would then have the repayments on the 2% lesser new variable for the 5 years.
 
Does anybody know if this has happened? There is no reference to it on EBS website. Not sure if this is a story 'doing the rounds' or based on fact? It would be a big step for EBS to stop offering 3 and 5 year fixes, I don't think they would have many takers for a 10 year minimum fix.
 
marksa said:
Al little know fact for consumers is that the Financial Institutions are only allowed to charge an MAXIMUM of 6 months interest or the economic cost of breakage (customer rate compared to the interbank rate).
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Is that true? No mention of it in the Consumer Credit Act as far as I can see. Is it governed by some other law or regulation?
 
"Does anybody know if this has happened? There is no reference to it on EBS website. Not sure if this is a story 'doing the rounds' or based on fact? It would be a big step for EBS to stop offering 3 and 5 year fixes, I don't think they would have many takers for a 10 year minimum fix"

Yes this was confirmed to me on Friday by my local EBS branch and I checked with another branch just to be sure as there was no reference to it on the website. Not very customer service friendly IMO. Can we take it from this that EBS do not want customers to fix their rates?!
 
Many (most?) borrowers probably should not fix their rates anyway and would be better off on a competitive tracker variable rate.
 
On the continent fixes for 10 or 20 years are very common and 1 and 3 years uncommon. I fixed for 10 years two years ago and boy am I glad now. Even if I had to pay penalties for breaking the contract in the future it would be more than offset by the near doubling of interest rates in the last 18 months. Personally if I was purchasing in Ireland now I'd be fixing for a min of 5 years because no one knows how high the ECB will go. A fact that is rarely mentioned here.
When I started out my first mortgage was 9.25 % (a good rate at the time believe it or not) and another institution I seem to recall around that time was around 17%.
 
EBS (the mutual, customer friendly building society) pulls it's 3 and 5 year fixed rate without warning while the corporate animal Bank of Scotland drops it's 5 year fixed rate from 4.89% to 4.88% while having 2 and 3 year fixed rates at 4.84%.
Good old EBS, always acting in the interests of the customer.
 
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