Danske Bank selling tracker book - good news for tracker holders?

JanusGold

Registered User
Messages
15
Seems likely now Cerberus is going to buy up the Danske loan book. As a Danske mortgage holder, still clinging to my tracker, I am wondering if this is good, bad or indifferent news?
(Cannot post links yet but this was reported The Sunday Times last Sunday and the article is is available online)
 

Brendan Burgess

Founder
Messages
38,671
It's definitely not bad news for anyone who is up to date on their payments. There is nothing that Cerberus can do to get you off the tracker.

However, it might be good news, although I think unlikely.
1) They might offer you a deal to switch to another lender and pay off your mortgage early.
2) They might allow you to move your mortgage to another property - I think that this is very unlikely.

Brendan
 

Adanskecustomer

Registered User
Messages
3
Have fixed rate with danske (4.65%) will be moving to variable in Feb '17 (4.95%). Have applied to switch to AIB, Still waiting on approval from AIB. Will danskes move to sell loan book to cerberus have any advantage or disadvantage for me. Should I wait? Or switch to AIB If I get approved
 

MrEarl

Frequent Poster
Messages
1,742
Have fixed rate with danske (4.65%) will be moving to variable in Feb '17 (4.95%). Have applied to switch to AIB, Still waiting on approval from AIB. .....
Are you intending to move from Danske before the end of your fixed rate ?

If the answer is yes, then you should first check with Pepper to see if there will be a cost involved (for breaking out of your fixed rate contract with Danske).
 

Rasher

Frequent Poster
Messages
12
Hi Brendan.

Just wondering if Cerberus did acquire the Danske loan book, what are the chances of them doing a deal for people who have a .5 above ecb rate tracker.

Rasher.
 

ronaldo

Frequent Poster
Messages
399
Hi Brendan.

Just wondering if Cerberus did acquire the Danske loan book, what are the chances of them doing a deal for people who have a .5 above ecb rate tracker.

Rasher.
I'd say it's something you can hope for, but the chance is that slim that it wouldn't be worth influencing your decision to move home (for example).

Also, were they to offer a deal, I don't imagine that it'll be a flat incentive as we've seen in the past (if memory serves me correctly, one of the lenders did offer 10% in the past). I reckon a deal, should there be one, would also take into account the term remaining. For example, they may offer something like 0.5% reduction in capital for ever year remaining in term.

I'd like to stress though - I imagine the actual chances of some sort of a deal being done are pretty low.
 

MrEarl

Frequent Poster
Messages
1,742
....I'd like to stress though - I imagine the actual chances of some sort of a deal being done are pretty low.
While I am inclined to agree, the one thing that does keep ringing in my head is that Cerberus are hardly the type of fund to stick around while everyone pays off their 25-30 year homeloans. That said, perhaps their plan is to flip it on to someone else in another couple of years...
 

aristotle

Frequent Poster
Messages
784
Or maybe Cerberus plan to try to invoke the clauses in most tracker mortgages where the property is revalued and a new Loan-To-Value percentage is determined. This then may impact the rate you pay.
 

ronaldo

Frequent Poster
Messages
399
Or maybe Cerberus plan to try to invoke the clauses in most tracker mortgages where the property is revalued and a new Loan-To-Value percentage is determined. This then may impact the rate you pay.
If I remember correctly, the Danske (NIB) paperwork only refers to possible action if the LTV rises above 80%.

Back in the day, National Irish Bank were the best buy for tracker mortgages of 80% LTV and under and the trackers were pulled in 2008.

I really don't see them revaluing the houses in their entire loan book in the hope that, eight years later, a customer is on a higher LTV than they originally signed up to.

Besides, the paperwork didn't give them a right to revalue your house anyway - an activity that would surely require them to gain entry to your house - which you're under no obligation to permit.
 

twofor1

Frequent Poster
Messages
1,290
If I remember correctly, the Danske (NIB) paperwork only refers to possible action if the LTV rises above 80%.
That's correct, the actual wording is;

''In the event that your LTV increases above 80% at any time during the term of your LTV mortgage, we reserve the right to convert your LTV rate to our then applicable Home Loan rate''

With property prices increasing again there must be many whose LTV is now substantially lower, with that in mind I think it is also worth pointing out that the same T&c's state that you can renegotiate your LTV rate (Subject to certain conditions), so if your LTV was 60% - 80% when you drew down your mortgage, you would be on ecb + 0.8%.

If your LTV is now 50%-60% you can apply for ECB + 0.6%.

If your LTV is now 0%-50% you can apply for ECB + 0.5%

I am sure Cerberus would not like it and would probably make it difficult, but if your T&c's allow for renegotiation I would guess they are obliged to comply.
 

newtothis

Frequent Poster
Messages
558
While I am inclined to agree, the one thing that does keep ringing in my head is that Cerberus are hardly the type of fund to stick around while everyone pays off their 25-30 year homeloans. That said, perhaps their plan is to flip it on to someone else in another couple of years...
That is exactly what I was told by them (using somewhat different words!) when I met with them earlier this year. I was told by Cerberus that their interest was in buying and selling loans, and they did not expect to have any remaining after two years. Mind you, I'm not sure I believe a word they said, as I was told other things too that I subsequenly found were directly contradictory to what others had been told.

In my own case, I have one of the Danske tracker mortgages which was sold to Cerberus last October. It had been in difficulties, but thankfully not any longer. I am in the middle of coming to an agreement with them to pay it off at a discount, refinacing elsewhere. I understand that others have done and are doing the same.

If you believe what they say, I'd be very surprised if they didn't entertain offers for any other ex-Danske loans they purchase.
 

JanusGold

Registered User
Messages
15
Looks like I'll have to go with a personal loan for renovations if this is the case....

I wonder also is this an indication that the likes of Pimco see interest rates rising sooner than is generally thought. The loans aren't all trackers and I assume (perhaps naively) that higher rates give a higher range over the base rate for banks on variable rate mortgages and hence the opportunity to make more profit.
 

RedOnion

Frequent Poster
Messages
3,288
If they fund this via a covered bond with the coupon linked to ECB, it won't matter if rates rise or fall, their margin over the cost would remain the same.

It's only if they were funding via deposits where they can't pay negative rates that rising rates would benefit them.
 

westernway

Registered User
Messages
13
have an LTV tracker that was with Danske, now with Promontoria (pluto). Some years ago, while with DANSKE, we warehoused part of the loan, and are repaying the other part. now we have an offer, verbal, to buy the whole lot at a reduced amount - any advice appreciated. we asked for a figure, they said yes straight away, now not sure we've done the right thing... all verbal so far
 

westernway

Registered User
Messages
13
Need to get some independent financial advice in this as reslise the tracker is valuable.
Read quite a few articles since posting - and generally advice is write down would need to be in region of 40% to make it worth giving up tracker.

How to find advisor now - someone not affiliated to a bank! Any tips?
 

westernway

Registered User
Messages
13
Write down offered currently is roughly 30% discount on overall value of the loan
We would be interested in selling up our house to relocate- but are we wiser to stick on our tracker?
 
Top