Brendan Burgess
Founder
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namawinelake said:And now is a perfect time for such an entrant to make their entrance. With the imminent creation of the central credit register, the new entrant will be able to judge a customer’s credit-worthiness better than ever before. With Bank of Ireland required to send out letters to customers advising them of the new entrant’s proposition – yes seriously, that was a condition under which the EU approved the state-aid bailout of Bank of Ireland, and others – the new entrant will even see their marketing taken care of.
namawinelake said:I reckon the new entrant should be able to pick up at least 100,000 mortgages of say an average of €100,000 each or €10bn in total and if the new entrant charges 3% on standard variable rate mortgages and its cost of funding is 1%, then it has €200m gross profit per year.
Biggest problem with normal, on-demand deposits is that they are on-demand.
At the start of the year, Irish pension funds held about 101b Euros in assets, imaging if say 35% of that was to be held in Irish property.....
We'd have even less pensions than before ...
So what about the Credit Union model? ...
Is the differential in deposit rates and mortgage rates with AIB/BOI of any relevance when a large part of that difference is related to the subsidising of tracker mortgages?
Judging by the differential in the UK, and the fact that they are still offering tracker mortgages at BOE+1.88%, is it worth comparing to their system? - possibly not due to their Funding For Lending scheme and lack of a property crash to the extent that we've had
What is holding UK banks off on becoming mortgage lenders on a large scale in Ireland - is it the crashing prices or is it the difficulty banks have experienced in the past with repossessing homes?
NIB have the best arrears record, because they targetted the switcher market with LTV loans. They probably have the worst cheap tracker problem though.If, as expected, repossessions are to become more of 'the norm' here, would a UK lender be tempted to enter the market at lower LTV's - even the switcher market?
I can't see how it wouldn't be economically viable for a UK lender to set-up here at LTV's of, for example, 50% and concentrate on the switcher market. The risk here is minimal - even taking into consideration the more restricted ability to repossess. There are a lot of people in more established homes purchased well before the peak that are stuck on our exorbitant SVR's
Would the Irish government have a hidden agenda in trying to avoid the changing of laws in a manner that would encourage more foreign banks to set up as mortgage providers here? (given the fact that the majority of the 'good' mortgages in the state owned banks are likely to be switched at first opportunity - leaving only the high-risk customers with AIB/BOI)
All the banks are competing for deposits so the rates being paid out are just too high to have cheap mortgages.
I doubt it. Overall it would be very good for the country if a foreign lender came in and offered lower mortgage rates.
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