PTSB ptsb letter to brokers explaining changes in tracker price promise

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davidclayton

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Just starting to dig about for info on loans now with a view to talk to banks and brokers very soon to get approval in principal. I have 2 questions:

1.
If you go with a 3yr fixed term rate initially, and are then transferred to a tracker rate, do you set the tracker margin at the start of the loan, or only after the 3yr fixed term is up? In other words, the rate might be 1% margin at the moment, but it could have changed to 2% by the time the 3yr term is up.

2.
If going with a tracker loan, I always thought that when the tracker margin was set at the start of a loan, it did not deviate. It would stay the same margin above the ECB for the whole term of the loan. When I talked to a mortgage advisor in Irish Permanent, she said that both the ECB and margin can change throughout the term. Is she incorrect? (I hope so)
 

LDFerguson

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Re: A couple of quick tracker questions

Some lenders, e.g. ICS will allow you to fix and will write the follow-on tracker margin into your loan offer now. It's an important point and one worth checking with any lender you approach.

Permanent TSB don't offer tracker mortgages any more. Although they claim to offer trackers, the margin over ECB is only fixed for a year or two. Personally I consider it misleading for them to refer to these as trackers.
 
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davidclayton

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Re: A couple of quick tracker questions

thanks for the feedback. i think i may be able to scrape under 80% LTV, so it's looking like AIB might be the best option at the moment @ ECB +0.75%
 

ClubMan

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Re: A couple of quick tracker questions

2.
If going with a tracker loan, I always thought that when the tracker margin was set at the start of a loan, it did not deviate. It would stay the same margin above the ECB for the whole term of the loan. When I talked to a mortgage advisor in Irish Permanent, she said that both the ECB and margin can change throughout the term. Is she incorrect? (I hope so)
If it's really a tracker then the margin should not be subject to change ever. I'm not sure if there are some tracker mortgages whose term & conditions allow the lender to vary the margin in certain (specific or otherwise) circumstances - but this seems to defeat the purpose of a tracker which is to have a fixed margin over and above some base rate (usually the ECB main refinancing rate).
 

Sunny

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Re: A couple of quick tracker questions

Permanent TSB don't offer tracker mortgages any more. Although they claim to offer trackers, the margin over ECB is only fixed for a year or two. Personally I consider it misleading for them to refer to these as trackers.
Really?? That is misleading.
 

ClubMan

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Re: A couple of quick tracker questions

Their mortgage brochure says:
TRACKER MORTGAGE

A Tracker Mortgage is a variable rate mortgage available to new
mortgage customers borrowing in excess of €150,000, which tracks the
European Central Bank (ECB) rate. We guarantee that your mortgage
rate will never be more than a specified amount above the ECB rate,
giving you peace of mind on your mortgage interest rate.
If what Liam says is true then a complaint should be made to IFSRA about this. If anybody can point me to authoritative info on their website (in particular the T&Cs governing their "tracker" mortgages - which I can't find on their website) then I will do it.
 

Brendan Burgess

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From: Intermediary Support Area [mailto:Intermediarynews@permanenttsb.ie]
Sent: 06 December 2007 14:23
To: undisclosed-recipients:
Subject: New Mortgage Pricing




permanent tsb

Intermediary Mortgage Centre

56/59 St Stephen's Green

Dublin 2

www.intermediarynews.ie





As you are undoubtedly aware there has been a significant increase in the cost of funds and as a result,permanenttsbwill be changing the structure of our variable rate mortgage products and introducing new mortgage pricing over the coming weeks. Tracker rates will still track the ECB, however we are making changes to our price promises.


This re-pricing is being undertaken on a phased basis.


- We will be increasing tracker pricing for all new applicants and some existing customers by between 0.10% and 0.15%. Rip tracker products will be increased by a further 0.10%.

- While our tracker products will still track the ECB, we will no longer include a specific price promise regarding the rate that they mature to after Year 1.

upload_2015-8-22_19-5-22.png


2. Introduction of new <60% LTV band for residential business.


From February 08we are introducing a new competitively priced tracker product, for new business, for loans >€200k and LTV<60%. The rate will be ECB + 0.75%.


This product will alsobe available to all existing residential customers who have an LTV of <60% and a balance outstanding of >€200K from 10th December 07.


Please note any customer rolling off discounted rates or reaching the end of their fixed rate with no specific price promise will automatically avail of this rate (ECB + 0.75%) if they meet the criteria outlined above with effect from 10th December 07.



3. Maturity of all fixed rates and discounted variable rate mortgages


From 10th December any existing customer’s loan that matures from a fixed rate or discounted variable rate mortgage will roll into a new set of tracker rates – see roll on tracker rates in table above.


The roll on rate will be determined as it is today, using the original loan amount to determine price band and current LTV.


The two exceptions to this are customers who applied for:-


(A) A fixed rate for 1, 2 or 3 years mortgage from 17th April 07 to 12th Nov 07.

These customers were given a specific price promise and will therefore mature to today’s lower tracker rates.


(B) A LTV tracker mortgage from 17th April to 17th Dec 07

These customers were given a specific price promise and will therefore mature to today’s lower tracker rates.



*Please notematuring customers without a specific price promise, and with an LTV >95%, will roll to ECB +1.25% and then in February they will roll to ECB+1.3%.



4. REMOVAL OF PRICE PROMISE FOR YEAR 2 TRACKER RATES


From 17th December, all new business tracker applications will no longer have a specific Year 2 price promise. Instead they will roll into the “appropriate Tracker rate at maturity”.



5. Oneyear fixed RATE NOW AVAILABLE ON 100% mortgage


From 10th December, the 1 year fixed rate will be available to all First Time Buyer customers including 100% applicants (subject to the new lending criteria).



Treatment of Pipeline

Customers will need to be issued with their permanent tsb loan offer prior to the launch of the new pricing in February in order to avail of the old rates. Customers who have had their loan offer issued, can avail of a grace period to draw down at the lower rates and details will be communicated in January 08.


Should you have any queries regarding the contents of this email, please contact your Intermediary Development Manager who will be happy to assist.

Best regards


Therese Meegan

Intermediary Support Manager



IMAF Award Winner 2007 – Best Commercial Lender
 

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Brendan Burgess

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Re: A couple of quick tracker questions

I don't understand this. Can anyone else explain it?

1) Are they saying that if you get a tracker today, it will only keep the margin for one year?

2) Or are they saying, that if you take out a fixed rate mortgage today, at the end of the fixed period, you will get the relevant tracker rates pertaining then.?

1) is completely unacceptable. It is not a tracker and the Financial Regulator should stop this advertising immediately.

2) is acceptable.

Brendan
 

ClubMan

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Re: A couple of quick tracker questions

It's seems pretty confusing to me too!
Rip tracker products will be increased by a further 0.10%.
They didn't omit the word "off" near the start of that sentence by any chance? ;)
 

Sunny

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Re: A couple of quick tracker questions

-We will be increasing tracker pricing for all new applicants and some existing customers by between 0.10% and 0.15%. Rip tracker products will be increased by a further 0.10%.
-While our tracker products will still track the ECB, we will no longer include a specific price promise regarding the rate that they mature to after Year 1.
I don't understand.......:confused:

I think there is definately a case for IFSRA to have a look at the advertising unless someone can explain what the hell they are talking about.

Reading what they are saying, I have to say 'I don't know what a tracker mortgage is' anymore
 
I

irishlinks

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The document that is being referred to was issued to brokers. It is not very well worded -and I can see why there may be confusion. My understanding is that PTSB are just referring to their 1 year discounted tracker mortgages when they say "we will no longer include a specific price promise regarding the rate that they mature to after Year 1"
Previously they must have stated a specific rate for year 2 onwards after the discounted period ended. Now - all they are saying is that customers will roll into the "relevant tracker for their loan" after the discount. This is probably just to cover themselves if thay have to increase (or decrease) the tracker margins during that year. I am sure it does not mean that they will be changing tracker rates when they feel like it. If you want to be sure of getting the same tracker margin from PTSB for the life of the loan - don't opt for the 1 yr discount (if they let you).
Anyway - as per the Best Buys thread - you can avoid any confusion and just go to NIB for a lower rate anyway.
 

Brendan Burgess

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If PTSB give me a tracker mortgage at 1% over ECB, then it should remain at 1% over ECB for the life of the loan.

If they decide to give me a .4% discount for the first year, then I should pay .6% for the first year and 1% thereafter.

It is not a tracker, if it does not work like this.

Brendan
 

petrucci

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I have applied for a loan with PTSB in late December. I opted for a tracker rate 4.7% rolling to 4.9% after year one. Indeed only 4.7% is guaranteed in the loan offer letter I received and "we will no longer include a specific price promise regarding the rate that they mature to after Year 1" and "will roll into the "relevant tracker for their loan" after the discount" are there, no mention of 4.9%.

Now I can understand that banks from time to time need to adjust their margins to accomodate market's conditions but the way that PTSB does it is unacceptable. THEY SHOUD'VE DONE IT WITH IMMEDIATE EFFECT OR NOT AT ALL.

What they are offering me now is:
" ok, we'll give you 4.7% for the first year but we don't know how much it's gonna be after that.. it might be more, we don't know.. maybe 0.10%, maybe 0.15%, we don't know, ya know...so, errhhh, we don't know... "



Basically, their current discount tracker rate is actually a 1y fixed rate (well, except the ECB bit ;)
But hey, this is Ireland, I'm not surprised by that!!
 
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Suz2015

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I have just come across this old post and I am wondering if the letter above has any relevance to our current situations?
 

Brendan Burgess

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Hi Suz

Well spotted. I was actually looking for that letter which was issued to brokers, and it's great to see that I reproduced most of it at the time.

I will still try to get the original.

Brendan
 

Brendan Burgess

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Hi Brendan, I would be very interested to see the original of this, it seems to be an email, it would certainly help my appeal, thanks Suz2015.
Hi Suz

I have now found the original email, and I have edited my original post from 2008, to include the tables.

Brendan
 

Suz2015

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Thanks Brendan. Do u think this is any way relevant to us? LTV less than 60%, loan greater than 200k, drawdown April 2007, fixed for 2 years, broke Jan 2009, no rate in contract.
 

Brendan Burgess

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Hi Suz

Not sure. You fixed for two years without a price promise. So what was the tracker rate when your loan was due to expire in April 2009? ECB + 2.25%, so I presume that is what you were offered.

This was not really a tracker mortgage. And maybe they could be had for false advertising. However, the terms and conditions were clear. As Irish Links said at the time, National Irish Bank was a much better deal.

Brendan
 
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