PTSB passed on increase in ECB to variable customers

[Deisce]

So PTSB have passed on ECB increase as expected. My variable rate is now 6.15% Noonan's election promise would help myself and family right now. Also hopefully when the bank gets nationalised they may not be as quick raising it up.

 

[robd55]

Hi Deisce,

Just broke the 6% barrier myself with this latest rate increase. Sickening the way they are passing on the SVR rate when their rates are above all the other banks. I am withdrawing all my savings from them - they are not getting the benefit of increased mortgage payments and having my savings on their books. I suggest any other with savings in their bank do the same. They cant have it both ways.

 

[swauna78]

Totally agree with that philosophy. The can't have it both ways...
We're in the same situation as you Deisce...coming off a fixed rate and were offered 5.9% variable rate before the latest .25% ECB rise so our rate is now 6.15%. Lovely.

 

[Deisce]

Already switched current account and savings. They made switching current account very difficult. Ended up getting 100 euro from their customer complaints by way of an apology for making it so hard. Missed payments on all my direct debits as they never notified them.

Still have kids savings accounts with them but will move bulk of that into state bonds soon I think.

No chance of switching either in such negative equity. But I never would have started family without owning my bricks and mortar. Nice to have positives from buying 5 years ago.

 

[TOB76]

But I never would have started family without owning my bricks and mortar. Nice to have positives from buying 5 years ago.
But you don't own anything until the mortgage has been paid...

 

[VonLinus]

Hi Deisce,

Just broke the 6% barrier myself with this latest rate increase. Sickening the way they are passing on the SVR rate when their rates are above all the other banks. I am withdrawing all my savings from them - they are not getting the benefit of increased mortgage payments and having my savings on their books. I suggest any other with savings in their bank do the same. They cant have it both ways.

I think a problem with this is that if everyone withdraws money, they have lower cash amounts on hand, so they have to get cash from somewhere, so they raise their rates.

I see the dilemma though.

 

[mouse1]

Well the government have just taken a 99% in them today, so hopefully this might put a halt to their ever increasing rates, but I will not hold my breath.

I am in the same boat with a 6.15% variable rate, which is totally unreasonable given the current ECB rates, the variables should be 1-2% above base rate. I have a 210K mortgage over 26 years and my wife and I are both public servants and our pay has been slashed/frozen, I am worried about what we will be charged when the ECB raises rates by 1-2% in the coming years. Especially as I cannot switch to another mortgage company as the LTV has dropped, at least we are not in negative equity (yet!).

The government talks about people spending in order to help the economy out of recession, well if they want this, then the banks are going to have to stop this carry on and keep the variables and fixed rated in line with the ECB! Rant over!

 

[marksa]

I am in the same boat with a 6.15% variable rate, which is totally unreasonable given the current ECB rates, the variables should be 1-2% above base rate.

what have you based your calculations on to arrive at 1-2%? If they are having to pay 4.10% for 1 year money - why would they lend it at 3.50%? All that will do is increase operating losses and require more capital to be raised from the state.

As for saying PTSB can raise money from ECB at 1.50% - base rate, that's a limited resource. They can only borrow money to the extent that they have security in the form of funding. For every €70 of cash borrowed, they have to provide about €100 of mortgages (what is known as a haircut). So they other €30 needs to be funded from other sources such as the deposit book mentioned above. They also under the Pillar 2 regime set out by the Regulator, need to increase their loan to deposit ratio - again at a cost.

 

[mouse1]

what have you based your calculations on to arrive at 1-2%? If they are having to pay 4.10% for 1 year money - why would they lend it at 3.50%? All that will do is increase operating losses and require more capital to be raised from the state.

As for saying PTSB can raise money from ECB at 1.50% - base rate, that's a limited resource. They can only borrow money to the extent that they have security in the form of funding. For every €70 of cash borrowed, they have to provide about €100 of mortgages (what is known as a haircut). So they other €30 needs to be funded from other sources such as the deposit book mentioned above. They also under the Pillar 2 regime set out by the Regulator, need to increase their loan to deposit ratio - again at a cost.

My previous experience of variable rates was in the UK and 1-2% has been the norm there. This is a totally new experience for me, as this isn't a normal mortgage market.

Surely now that the government owns the bank, it's interest rates have to fall in line with other state owned banks? They are simply too high compared to ECB rates, and for the government the problem isn't just about banks making profit - it is also about the economy, and continually increasing interest rates doesn't serve the economy well during a recession, moreover it is dangerous given Ireland's predicament.

 

[marksa]

Surely now that the government owns the bank, it's interest rates have to fall in line with other state owned banks?

they will not fall like other state owned banks of your experience in the UK as the UK's banks were a tiny portion of their total economy unlike the Irish banks. hence why uk govt could bail out the likes of Northern Rock and maintain a AAA rating and presumably lower interest rates for Northern Rock customers. Ireland on the other hand has a Junk rating status and no money to bail out banks or subsidise lower mortgage rates.