Alternatives to the FF Bill

[gnf_ireland]

Does anyone believe the banks & central bank will try and take the sting out of the tail of the FF bill by voluntarily dropping interest rates over the summer months, while the Dail is on their summer break.

Would the progress slow down [or urgency be removed] on this bill if:
(a) the Central Bank approved Frank Mortgages and potentially other mortgage providers quickly
(b) Rates of around 2.75% were available for home loans < 50%
(c) Rates of around 3% were available for home loans between 50-75%
(d) Rates of around 3.5% were available for home loans between 75-85%
(e) Rates of around 3.75% were available for home loans >85%


I also wonder for those with high LTV's or in negative equity, would there ever be a situation where the mortgage holder could 'split' the mortgage and switch part of it to a different bank, so in effect refinance an element of the homeloan.

The big question is then what will happen to those in arrears? Where would fall into the discussions given their risk profile are clearly higher than others, and some could claim that if you go into arrears you effectively become 'sub-prime' - not that I believe this to be the case for all customers in that position.

 

[Brendan Burgess]

Hi GNF

I think that the Central Bank and government and the lenders now realise that we are serious about bringing down mortgage rates.

If the lenders respond, the pressure for the legislation would reduce. The problem would be what would happen the likes of Danske Bank and the sub-primes?

A mortgage can't be split between two lenders. If I owe €120k to AIB on a house worth €100k. I couldn't switch €80k to Bank of Ireland and leave €40k with AIB. AIB has the first charge so in effect, BoI would have a loan of €80k on a property worth €60k. AIB could reduce the rate but BoI would charge a huge rate.