Brendan Burgess
Founder
- Messages
- 53,218
Press release I have issued this afternoon
Customers should boycott lenders who do not pass on cuts to existing customers
Brendan Burgess, consumer campaigner, and founder of askaboutmoney.com today called on borrowers to boycott ptsb and Bank of Ireland and for existing customers of these banks to switch their mortgages to another lender.
Today, ptsb and Bank of Ireland announced cuts for new customers only. There is absolutely no justification for this policy other than to exploit those customers who cannot move because of negative equity or mortgage arrears.
It is likely that this discriminatory treatment of existing customers is in breach of the Central Bank’s Consumer Protection Code, whose first General Principle is
“A Regulated entity must act honestly, fairly and professionally in the best interests of its customers and the integrity of the market;”
How can it be fair to offer new customers a lower rate than existing customers?
New customers should not be tempted by these rates. Given the contempt with which Bank of Ireland and ptsb treats their existing customers, you have no guarantee that these rates will not be hiked up in the future.
Both ptsb and Bank of Ireland are charging existing Standard Variable Rate customers 4.5%, but would charge new customers with loans of lower than 50% LTV 3.7% and 3.9% respectively. Those existing customers who are refused the new lower rate can switch to one of the other lenders where they can get rates as low as 3.6%.
These existing customers should show their annoyance, by moving to either AIB or KBC. For example, a borrower whose loan is less than 60% of the value of their home, can switch from ptsb’s 4.5% to KBC at 3.6% , a cut of €1,800 a year, every year on a mortgage of €2000,000. Between legal fees, land registry, valuer’s fees and VAT, it costs around €1,700 to switch. KBC will pay €1,000 towards your legal fees, so the net cost should not be more than €700. With a mortgage of €200,000 a borrower would recover this in less than 6 months.
Borrowers are advised not to be tempted by fixed rate deals which look low
Borrowers avoid the illusory low fixed rates from ptsb and Bank of Ireland. Irish borrowers are still paying around 1.5% more than borrowers in other Eurozone countries. There is no basis for such profiteering and I would expect variable rates and fixed rates to fall further. For example, Bank of Ireland charges up to 4.7% for a ten year fixed rate, whereas the average 10 year fixed rate in other Eurozone countries is 3.09%
Brendan Burgess
Customers should boycott lenders who do not pass on cuts to existing customers
Brendan Burgess, consumer campaigner, and founder of askaboutmoney.com today called on borrowers to boycott ptsb and Bank of Ireland and for existing customers of these banks to switch their mortgages to another lender.
Today, ptsb and Bank of Ireland announced cuts for new customers only. There is absolutely no justification for this policy other than to exploit those customers who cannot move because of negative equity or mortgage arrears.
It is likely that this discriminatory treatment of existing customers is in breach of the Central Bank’s Consumer Protection Code, whose first General Principle is
“A Regulated entity must act honestly, fairly and professionally in the best interests of its customers and the integrity of the market;”
How can it be fair to offer new customers a lower rate than existing customers?
New customers should not be tempted by these rates. Given the contempt with which Bank of Ireland and ptsb treats their existing customers, you have no guarantee that these rates will not be hiked up in the future.
Both ptsb and Bank of Ireland are charging existing Standard Variable Rate customers 4.5%, but would charge new customers with loans of lower than 50% LTV 3.7% and 3.9% respectively. Those existing customers who are refused the new lower rate can switch to one of the other lenders where they can get rates as low as 3.6%.
These existing customers should show their annoyance, by moving to either AIB or KBC. For example, a borrower whose loan is less than 60% of the value of their home, can switch from ptsb’s 4.5% to KBC at 3.6% , a cut of €1,800 a year, every year on a mortgage of €2000,000. Between legal fees, land registry, valuer’s fees and VAT, it costs around €1,700 to switch. KBC will pay €1,000 towards your legal fees, so the net cost should not be more than €700. With a mortgage of €200,000 a borrower would recover this in less than 6 months.
Borrowers are advised not to be tempted by fixed rate deals which look low
Borrowers avoid the illusory low fixed rates from ptsb and Bank of Ireland. Irish borrowers are still paying around 1.5% more than borrowers in other Eurozone countries. There is no basis for such profiteering and I would expect variable rates and fixed rates to fall further. For example, Bank of Ireland charges up to 4.7% for a ten year fixed rate, whereas the average 10 year fixed rate in other Eurozone countries is 3.09%
Brendan Burgess
Last edited: