Mortgage increase

T

TDON

Registered User
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EBS seem to be putting up the mortgage every month, with the letter that comes out stating that it's due to the cost of raising funds, so nothing to do with the ECB.

Are all other financial institutions doing the same thing, (i.e. increasing the mortgage rate every month) or is it just the EBS.?

Also, how come they can do this when they are making so much profits and paying thier directors a fortune?

I thought they were staying a mutual to pass on benefits to their members!!! :confused:
 
I guess if you’re on a variable rate they can put it up/down as they see fit. It may be best to try to switch to a tracker.
 
Must be just the EBS and those with standard variable mortgages. In theory the AIB are losing money now on my Tracker. Why not go their next AGM and give out about their high salaries.
 
TDON said:
EBS seem to be putting up the mortgage every month, with the letter that comes out stating that it's due to the cost of raising funds, so nothing to do with the ECB.

Are all other financial institutions doing the same thing, (i.e. increasing the mortgage rate every month) or is it just the EBS.?

Also, how come they can do this when they are making so much profits and paying thier directors a fortune?

I thought they were staying a mutual to pass on benefits to their members!!! :confused:
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Switch it and go tracker or fixed rate
 
While you're at it check if you could save (after any remortgaging costs) by switching to a more competitive lender.
 
I've had enough of their increases myself, rang them the other day to see what my options were but the best they would offer was a tracker at 1.45% above ECB. I've decided to switch to Bank of Ireland - 1.2 tracker & €1,000 towards legal fees.
 
ClubMan said:
I thought that most or all lenders had withdrawn payment or subsidisation of switching fees?
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So had I!! The amount borrowed has to be over €150k, but thats probably not an issue for most borrowers.
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Its not just EBS, INBS has increased there rates also not just by the ECB rate but also an extra 11% on top of that because of the state of the economy got that from my letter. I phoned them this morning to look into fixing and they told me they are not doing fixed rates at the moment because of the state of the ecomony so its not available to fix at the moment. I am so mad with this i don't know how we will continue to manage over the next year if they keep going up.
Was thinking of switching but our financial situation is different to what it was when we took out our mortgage 3 and half years ago cause i don't work now so only one income and i always said i would go back to work had this happen but i can't as i am expecting our 3rd in 2 months....

Don't know where to go from here, its a scary time.
 
ClubMan said:
I thought that most or all lenders had withdrawn payment or subsidisation of switching fees?
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Halifax are still offering 1k towards legal fees - or free title insurance as well as valuation fee refund. No lower limit on loan size and no mention of clawback (BOI will want the 1k back if you move to another lender within 5 years. Halifax have a tracker of ecb plus 1.15 for lTV upto 75% for switchers.
 
My advise would be to take the €1K and go to a solicitor. Title insurance is a disaster.
 
VOR said:
My advise would be to take the €1K and go to a solicitor. Title insurance is a disaster.
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Maybe not for mortgage switchers - probably not recommended for home movers or first time buyers?
 
Title Insurance is basically an insurance policy taken out to insure against there being any problems with the "Title" or ownership of the property. It's faster than waiting for all the searches etc to be done by a solicitor.
Lenders still need to verify all the various information they do under the traditional route; the difference is this is completed later in the mortgage process, by the title insurance service.
As far as I am aware it is only available for remortgage/mortgage switching because there is less risk of there being problems.
It is widely used here and in the US - I haven't heard of any "disasters" with it - except maybe solicitors losing out on income ; )
 
I refer specifically to the title insurance companies operating in Ireland and not to the general process itself. The idea is a good one.
I know of a couple who had the title re-registered in their name and been charged over €200 for it. Took them almost 6 months to get it back.

Another couple had loans not cleared and the money sent to them. They only noticed it weeks later when the next DD hit.

I could go on about the slowness of the process and cheques going missing but I won't. A family member worked in one such company so I have many stories.

I am not a solicitor so I am not worried about the profession losing out on income. If a professional competent title insurance company comes in to the Irish market, I'll be glad to give it business.
 
Thanks for all the replies folk.

Yeah Clubman, been to previous AGMS (like that did us all a lot of good :rolleyes: ) & next one not for another 9 months, so don't think that will sort it out any time soon which is what I'd like.

I was just hoping against hope, that someone else had challenged the fact that they could put up your mortgage when its not an ECB sanctioned rate increase.

It just seems to me, if they can keep saying they want it to increase just to raise funds, there might never be a way to keep it from spiralling out of control and no one to stop them or other financial institutions if they are doing the same.

I know the adage about ingorance of the law being no excuse, so that's granted here. But I'm trying to educate myself on this point and thought maybe someone here, had a more learned opinion than I.
 
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I think this highlights the worrying trend by lenders to shift away from Tracker Variable Mortgages. A few lenders have withdrawn trackers completely for new customers, leaving only fixed rates and Standard Variable Rates. Others are offering Standard Variable Rates that are significantly lower than Trackers. But as TDON is finding out, Standard Variable Rates offer the lender complete discretion as to how often they can increase their rates, while Trackers restrict the rate to a fixed margin over ECB.
 
I've had enough of EBS too, best to vote with your feet. If you're getting a new mortgage, steer clear, that's my advice.

I think EBS in particular have pushed this too far, - one seriously wonders are they just being cynically opportunistic and treating the "credit crunch" as an opportunity to increase their margins, thereby compensating for the shortfall in new customers lately.

There seems to be a letter coming in the door on a weekly basis now with an increase. My mortgage was taken out a number of years ago, so one wonders why the "increased borrowing costs" excuse should apply to all existing business. I think its "increasing margins" rather than "increased borrowing costs".

So, if you're thinking of taking out a new mortgage with EBS, be warned, - you may want to consider going elsewhere. (just my opinion at least).

There really should be legislation around this. One wonders, what is to stop them jacking up the rates by say 10%....other than lack of affordability of their customers. With a lot of people in negative equity, a lot of people have no choice but to stay, regardless of what rates they charge. Thankfully, I'm in a position to move.
 
raven said:
I think EBS in particular have pushed this too far, - one seriously wonders are they just being cynically opportunistic and treating the "credit crunch" as an opportunity to increase their margins, thereby compensating for the shortfall in new customers lately.
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Have you given any thought to EBS's current cost of funds? Bank of Ireland's is 9.25%.


BKIR issued £450m of lower tier 2 debt yesterday (July 31st) with a sticker price of 9.25%. That is a spread of 431bps over UK governments or closer to 385bps over swaps and shows not only that bank spreads generally have widened in recent months but that the market is exacting an Irish premium.

http://www.davy.ie/content/pubarticles/eqbrief20080801.pdf​
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