+2% Stress Test: A Barrier to Switching

Discussion in 'The Switchers' Forum' started by Joe90, 26 Jul 2017.

  1. Joe90

    Joe90 Frequent Poster

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    Thanks again, Red Onion.

    My UB advisor said that they would be talking with an underwriter to see if there was anything they could do. I will keep ye all posted if there is any update. Would be interested to hear if this is widespread - are many other mortgage holders denied the opportunity to fix for 3 years due to CB regulation....
     
  2. Brendan Burgess

    Brendan Burgess Founder

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    It's probably worth writing to Governor Lane.

    He has changed some of the long standing practices of the Central Bank e.g. he seems to have told them to publish the correct mortgage rates in their monthly reports and to stop highlighting meaningless rates.

    He might question why they stop people switching.

    But then again, the lenders own underwriting criteria might not allow a switch, even if the Central Bank did not object.

    Brendan
     
  3. Joe90

    Joe90 Frequent Poster

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    Well the UB representative rang back and informed me that the stress test only applies on 7 year mortgages. I pointed out to her that the appropriate regulation specifies that 5 year fixed rates are not covered by this, and asked her to ring the underwriters again.

    In fairness to her, she rang me back in 20 minutes. Surprise, surprise it's Ulster Banks policy to stress test fixed rates up to 7 years, so we are not being considered for any fixed rate mortgage, and have to remain at our robbing banksters 4.3%. Not a lot she can do, but it highlights what I have said previously: it is the policy in this country by certain banks to keep those who bought in good faith at the height of the boom to keep them held hostage at variable rates on 4%+rates with no chance of switching.

    I might write to Dr. Lane, but what can he really do about it? I was going to contact our TD Shane Cassells, as I can't deal with Peadar and I don't think Damien is up to it.....
     
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  4. RedOnion

    RedOnion Frequent Poster

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    Joe, I'm sorry to hear that, and sorry if I got your hopes up.
     
  5. Joe90

    Joe90 Frequent Poster

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    Red Onion you have nothing to be sorry about, the issue is at the bank. I have other opportunities to be declined yet! I will try AIB next week, and KBC maybe as well. Is it too much to ask for a three year fixed rate mortgage in this country?
     
  6. RedOnion

    RedOnion Frequent Poster

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    Unfortunately you are borderline on a number of criteria with the different banks, but hopefully you will get some options. For example if any strictly apply a 3.5 times loan to income, you're still outside this, but you'll get there soon. Your age also limits options, unless you've both got a fantastic guaranteed pension?

    I have to say I'm shocked at the difference between new business and existing customers fixed rates for PTSB. I can understand your frustration better now.

    I'd suggest go with KBC first - rates are better, and they might have a more clear cut criteria.
     
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  7. Brendan Burgess

    Brendan Burgess Founder

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    Another point to put in your letter to Governor Lane.
     
  8. Sarenco

    Sarenco Frequent Poster

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    Definitively give KBC a shot.

    It's always going to be a struggle to switch providers with a relatively high LTI but if you don't ask...

    If that goes nowhere you should at least look to switch to PTSB's <80% MVR - not a huge rate reduction but better in your pocket that PTSB's.
     
  9. Joe90

    Joe90 Frequent Poster

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  10. Brendan Burgess

    Brendan Burgess Founder

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    Send it to both.

    Brendan
     
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  11. Joe90

    Joe90 Frequent Poster

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    Update:

    AIB were interested enough and courteous enough to organise a meeting with a mortgage advisor, but we could not proceed as the 22-year term remaining is too long, as we are 47 and 48 years old.

    KBC sent on an attachment of a very long form to be completed, together with declaration of income forms to be completed by our employers. We are both public servants, and the forms will inevitably be lost when we submit them. I'm not that gone on KBC and fear that we might be in a stickier situation if they decide to abandon the Irish market and sell the loan book to an unscrupulous lender charging 5%+.

    BOI said no based on LTV.

    EBS, contacted them twice, but no response.

    Still with PTSB, still paying 4.3%. LTB now approximately 81-84%. Will have professional valuation completed before the Christmas.

    I submitted a letter to bot the governor and deputy governor of the central bank. I also sent a submission to the central bank for their analysis of the mortgage market. No reply from any of these as yet.

    I have abandoned our attempts to remortgage for now, and will concentrate on holding tight in keeping PTSB sweet until such time as they are sold/taken over/win the Euromillions and sort themselves out. If our valuation is less than 80% I will ask them to review our rate and see what BOI can do. Worst case scenario is that they hike up their rates to screw even more us and others like us who are trapped with them.

    The UB experience left a bad taste in the mouth, so near and yet so far to a good deal for me an my family. I might try them again in the new year as we are due a pay rise, and the loan balance will be a little bit smaller....
     
  12. RedOnion

    RedOnion Frequent Poster

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    @Joe90 I don't see KBC leaving the Irish market anymore. There was doubt until recently, but the Group gave committed to staying, and I've seen a ramp up in recruitment / investment in the past few months.
    Interestingly, they've just this morning announced a 10 year fixed rate at 3.19% (2.99 with current account) for less than 80% LTV.
    BoI is the only other 10 year fixed at 3.8% for the same LTV.
     
  13. Joe90

    Joe90 Frequent Poster

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    Thanks @RedOnion, that is an interesting development, seems to indicate a long-term strategy for that institution.

    Have to leave this on hold for now. We have some issue with our credit rating, as PTSB have not reported to the ICB that we came out of an interest-and-part-capital repayment arrangement and went on full repayments 15 months ago. This only came to light this week when we tried to get a car loan with the credit union....
     
  14. Joe90

    Joe90 Frequent Poster

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    We go again.

    New year, new increments have been applied to earnings, and LTV has reduced again. Will go via a broker in June when I have some time to pursue this again, as the broker options have improved since last year.

    I got an email from the Central Bank today following my submission to the public consultation on Enhanced Mortgage Measures: Transparency and Switching (CP112) in 2017. No publication date for this report was given but they do intend to make my submission available on their website, and state that they will remove any sensitive material. No word on what commentary or opinion on our case that they will have, but I am awaiting this report with interest. Is there anything I should be concerned about in my publication of my submission?
     
  15. renter45

    renter45 Frequent Poster

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    are you below the 80% LTV as that would be a big help with UB (4 yr fixed 2.6%) or try get BOI cashback with 1,2,3 or 5 yr fixed @ 3%.
    Your O/S mortgage will have dropped so you might be able to reduce the term to finish by 65 with the 2.6% or 3% rate. I'm just finishing switching from UB to BOI.
     
  16. Joe90

    Joe90 Frequent Poster

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    Update: I received a copy of the proposed redacted version of my submission to the Central Bank report CP112 late yesterday evening. They have blanked out over 50% of it, and much of the integrity and purpose of my original correspondence has been lost. What remains hints at the issue that I had with the barrier that I came up against in switching mortgage provider, but it not explicit enough for me. I had thought of denying permission to use my submission but I think I will leave it, as there may be other submissions that can address more clearly my concerns. If I had known that submissions can be published, I would have been more careful in my phrasing and details that could have been published. C'est la vie....
     
  17. Paul Reilly

    Paul Reilly Frequent Poster

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    Im in a very similar position to you Joe.

    Reading your post has put we off switching

    We are meeting UB on Monday but Id say that will be that

    PTSB have a new 3.7per cent Fixed Rate for existing customers

    Might hv to go that way for 5 years and just treat it as rent.
     
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  18. Joe90

    Joe90 Frequent Poster

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    Hi Paul, I only saw this today, would love to know how you get on.

    I took a break from all of this for 2 months and was not aware of the new fixed rate foe existing customers. I'll be checking this out, but knowing PTSB, they'll probably put some barrier in our way.....
     
  19. RedOnion

    RedOnion Frequent Poster

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    @Paul Reilly , @Joe90
    As far as I can see the only barrier PTSB have in place is that you have to pay a fee of 100 euro to fix.
    If you're on MVR of 4.3%, and can't switch lender, my view is you should really fix at 3.7%.
    I think there's still room for the rates to drop further, but right now I'd fix for 2 years to start saving, and keep an eye on changes. If they drop further it might be worthwhile breaking and refixing.
     
  20. Bronte

    Bronte Frequent Poster

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    You've lost me here. Why is your submission redacted in any way, surely if it's your submission you can write what you want?

    And if it's redacted so much as to lose the whole point than what is the point in engaging in this process.

    By the way I presume you know the CB etc read here.