Thanks for raising awareness about this Brendan and thanks for the suggestions - good piece on Prime Time tonight - have regularly emailed senior government ministers re this and other inequities over the past number of years - will send more emails tomorrow - we are in negative equity and have SVR mortgage with BOI - seeing as we cannot switch are we not at a disadvantage in terms of accessing any limited competition in the market place - surely this is a counter argument to the central bank and government's argument about not.
Raising awareness of the injustice at the heart of this issue is not a waste of time in my view. Alot of elected representatives and others have advocated for the need for banks to respect the rights of tracker mortgage holders and those in mortgage arrears or at risk of repossession. While this is all perfectly fine and understandable my difficulty is that very little is being said in relation to the relatively small cohort that are picking up the cost of same. And this is a little too convenient for the politicians in my view. If they are prepared to endorse, permit or simply tolerate the placing of this additional burden on SVR mortgage holders then I for one would prefer it if they were compelled to say so publicly. That way I and my partner and our family and friends will know who will represent our best interests come the general election. If this campaign can keep the spotlight on this issue in an election year then who knows what it could achieve.I think you are all wasting your time. Please read the two articles from the Independant that I've posted on the other bank thread. Europe is dictating here and PTSB have no choice in the matter
The deal approved by Europe also includes a commitment by the bank to maintain its income ratio at targeted levels. That will be a worry for PTSB customers campaigning for a cut to the cost of their standard variable rate mortgages, which carry interest rates of around 4.5pc which are a multiple of the cost of servicing tracker loans.
I wrote to Brian Hayes MEP and in fairness to him he came back straight away with a reply. What he is looking to do is to get the ECB to take over the trackers. Can't see this happening, though it makes some sense, but thought I would post it for info.
I'm actually doing quite a lot at the European level in highlighting this absurd position for those on variable mortgage products in Ireland . My proposal which I have made to the ECB is that they would take over the trackers, which is the reason why those are variable mortgages are being fleeced. This is a big ask but something that I'm pursuing. I'm also doing what I can to put pressure on the banks - AIB were first to move. But much more needs to happen. Brian
This is a great idea .My idea is basically the formation of a Home-Owners co-operative.
The function of this organisation would be to represent the interests of its members (mortgage holders) on a collective basis when dealing with lenders; particulary around interest rates and mortgage types.
Essentially, it would operate under the same principles underpinning a buying group that negotiates prices and terms with its suppliers. So instead of the suppliers (in this case the- lenders) setting the price (in this case -interest rates) without reference to its customers, they would be forced to do so given the collective strength of the buyer (in this case the members of the co-operative/mortgage holders). Or the co-operative could potentially seek the best deal possible for its members and deal with whatever bank.
You only need to think of the power that Dunnes Stores has over its suppliers where they set the price and state what they are prepared to pay.
The legal structure for such an organisation could be a Company limited by guarantee without share capital. Membership cost would be a tiny sum, thereby potentially attracting huge numbers of mortgage holders who would have nothing to loose by joining. The more members, the greater the negotiating power.
Is an idea such as this credible or possible? It seems unbelieveable that banks can keep raising variable interest rates at a time when the wholesale rate is so low, driving already struggling mortgage holders further into the ground. Their profit margins are excessive and their "solution" of increasing the term of the loan is only a solution for the bank. In fact an increase in the term represents a bonanza for the banks, thanks to the increased interest that they will reap over the extended term. At the very least the interest rate should be decreased if the term is longer given that the loan becomes more profitable. Perhaps a Home-owners co-op could have a role here also.
A Co-operative such as this could also demand non-recourse mortgages for its members! Imagine if all future mortgage business was conducted through this organisation. The banks would have no choice but to provide the customer with the type of mortgage that they want and are prepared to purchase.
Would love to hear this idea explored at a public meeting.
Thanks all!
Just watched the prime time video in rte player. One question. Are there many more trackers than SVR mortgages? I now think it would be very hard to pleasure both ends.....
Keep up the good work, I have a SVR mortgage with BOI @4.25% - this needs to change, otherwise Im for switching! - I will try my best to attend.
Switching involves legal / valuation costs. Also carries the risk that new bank will hike up svr rates at future date without jusification.......back to square one ! The key issue is that banks are being allowed to exploit a segment of borrowers who are now seeking protection from central bank or Government or EU.If you can secure a lower rate by switching to another provider then you should go ahead and do so.
What are you waiting for?
Switching involves legal / valuation costs. Also carries the risk that new bank will hike up svr rates at future date without jusification.......back to square one ! The key issue is that banks are being allowed to exploit a segment of borrowers who are now seeking protection from central bank or Government or EU.
Hi Sarenco,Many lenders will meet most, if not all, of the costs of switching. If it makes financial sense to switch mortgage providers, then that is precisely what a borrower should do.
If a new lender ceases to offer the cheapest rate, then the borrower should switch again.
Our market based system relies on competition. Banks rely on consumer inertia in setting uncompetitive prices accross their product ranges. Consumers should always take the initiative and switch providers whenever it makes financial sense for them to do so.
If consumers fail to switch providers, when it is in their financial interests to do so, then they have no grounds to complain. I would strongly disagree with your approach of encouraging consumer inertia simply to advance your agenda.
I also disagree with your analysis of the key issue as being some form of "discrimination". The key issue, it seems to me, is that the cost of credit in Ireland is simply too high.
Hi Sarenco,
you make some insightful points so please can you advise on the following;
a) which banks will cover all the costs for switching? i have not managed to find a bank in Ireland that is prepared to do this.
b) which banks banks are prepared to accept you if you are in negative equity?
My situation is not unique and is reflected by the very existence of these threads.
This is the reality at the coalface.
Danske are charging their customers 4.95% because they know they can, as are the other banks.
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