The proposed rules could help reduce the rates for low LTV mortgages

[Brendan Burgess]

I have argued here that the new rules will raise the rates for high LTV mortgages although 44brendan disagrees with me.
Mortgage rates will shoot up for high LTV mortgages

Banks will be allowed to lend 15% of their new mortgages in excess of 80%.

This could boost the switcher market. If KBC manages to attract €500m from other lenders , they will be able to offer another €75m of new lending in excess of 80%.

So they will welcome switchers and probably offer even better deals for large loans with low LTVs.

Brendan

 

[44brendan]

Absolutely! I am surprised that there is currently not more competition amongst mortgage providers for these lower risk products. these mortgages would be a target sector for any bank and the lack of target marketing and attractive rates for such clients does promote the suspicion of cartel type agreements amongst the providers where no bank is prepared to risk a price war where all could lose out!!
Competition is what its all about here and given the new CB regulations I am surprised that there is no Bank prepared to be a first mover on this!!!
However given that the current impasse benefits all banks it may well need a new entrant in order to promote some competitive activity!!