PTSB & their hidden new rule for switchers!

Discussion in 'The Switchers' Forum' started by Mixer2017, 17 Jan 2018.

  1. Mixer2017

    Mixer2017 Registered User

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    Having met PTSB in October regarding a mortgage switch from EBS we got approval in principle. Its only a new mortgage since late 2016 but we'd had been with EBS for over 12 months & PTSB were fully aware of that & no issues.
    Flash forward to this week having done the full application in early December & spent the last month jumping through the usual hoops to get full approval the file was finally sent to the credit team.
    We have now been informed that PTSB will not take on a mortgage switch unless you've been with current lender for 24 months! Seemingly this came into effect at the end of November yet their own mortgage team didn't seem to know about it. It must be a result of people taking advantage of the cash-back deals but surely they should be upfront about it, still no mention on the website. Has anyone else experienced similar?
     
  2. TC2015

    TC2015 Registered User

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    Has anyone got this confirmed? If banks do this surely it is another PR disaster for them. The governments emphasis has been on promoting switching so any move like this, apart from being unethical and perhaps illegal, is surely going to be dealt with by the authorities.
     
  3. RedOnion

    RedOnion Frequent Poster

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    Why would anyone in their right mind switch TO PTSB?
    Their rates are dismal. Their treatment of existing customers appalling.

    Did they say current lender for 24 months, or you must have the Mortgage for 24 months? If the latter, it's understandable from a credit risk point of view.

    I don't understand this. Firstly, there is political pressure to abolish cashback offers, which would remove any incentive to move to PTSB. Other than that, nobody is going to tell a bank that they must take on certain business, or what their underwriting criteria should be.
     
  4. TC2015

    TC2015 Registered User

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    Any impediment to switching irregardless of it is to benefit from cash back or better rates undermines competition. If it becomes the norm to have a 24 month requirement to be with a particular lender in order to get approval with another then is is anti consumer and prohibits a competitive switching environment.

    I am pretty sure that the ability to switch freely is a good thing. The publication of break fee policies meant that switching out of fixed mortgage when funding rates are favourable has little or no cost. This was pro switchers. Again 24 month requirement is anti switchers. What is there to understand?

    As for PTSB I do believe a short term switch to them at current rates is a good deal. For example I did two years with BOI when 1% cashback. Switched to PTSB at 3.1% rate with 2% cashback. I fully intend to return to BOI for 5 year fixed at 3% rate plus 2% + 1% cash back. This I feel is and has been a good strategy. If BOI adopt the 24mth requirement it scuppers my plan. As I am well within 'my right mind' I believe this has been the best strategy to play it out for the first three years of my mortgage and until year 8. Explain to me a better option?

    If cash back offers were banned then I would still like to switch freely to avail of best rates. A 24 month stint is not in my or any consumers interests.
     
    Coldwarrior likes this.
  5. RedOnion

    RedOnion Frequent Poster

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    There's is nothing unethical, immoral, illegal or anti-competitive about requiring a customer to demonstrate ability to repay over a period, before underwriting their mortgage. It would however be a very unusual move if they now insist on 24 months with current lender.

    We're agreed that PTSB is an option so long as you've a mind to switch away again as early as possible. So basically you are switching to get their cash back, and then leg it.

    You need to be certain though that you can switch again - being stuck with PTSB wouldn't be a pleasant outcome. There are cash back offers with other lenders to follow the same strategy as you have, without gong near PTSB.

    The only unethical, anti-competitive practice in the Irish mortgage market at the moment, in my view, is the very existence of cash back deals.
     
    tonymac and Sarenco like this.
  6. Mixer2017

    Mixer2017 Registered User

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    They said I had to be with current lender for 24 months and this rule came into effect at the end of November, no mention of how old the mortgage was. As TC2015 said above it is anti switchers but I really cannot understand their strategy if they are trying to compete in the mortgage market?

    I still wouldn't agree if I was refused for not having the mortgage 24 months, surely I should still be accessed on my loan to income ratio just like any new mortgage application. Ours is not even 2:1 and regardless I would expect to be told up front which is the frustrating part of all this.
     
    Coldwarrior likes this.
  7. Rob F

    Rob F Registered User

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    This only makes sense if the other 2% cashback mortgage providers are also enforcing this 2 year limit. EBS do not their 2% cashback offer to anyone who has previously availed of a 2% cashback offer. I'm not sure about BOI.
     
  8. Humpty Dumpty

    Humpty Dumpty Registered User

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    Please explain why you think having a cash back offer is unethical or anti-competitive?
     
  9. RedOnion

    RedOnion Frequent Poster

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    Rather than me writing an essay on the subject, have a look at CCPC commentary, or why Fianna Fail want to abolish them. In summary, in my opinion, they mask the true cost of credit, and prevent banks competing purely on interest rate.
     
  10. lledlledlled

    lledlledlled Frequent Poster

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    I think people should be able to factor in the value of cashback vs a slightly lower interest rate, and then calculate what is the best for their situation.
    I know i was delighted to get the 2% cashback from EBS so i could pay for some furnishings to the house, after blowing every penny we had on the 20% deposit requirement. When the Central Bank brought that rule in, it effectively doubled the amount we needed to save for a deposit so the cashback was very welcome indeed.

    Now that there are better rates available elsewhere, we are moving on to another lender. But i'd be sad to see the cashback deals abolished. It should be up to the bank what deals they offer, and up to the customer if they view cashback as a gimmick and want to avoid.
     
    Coldwarrior likes this.
  11. RedOnion

    RedOnion Frequent Poster

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    Its probably worth starting a separate thread on whether cash back is a good or bad thing.

    I agree completely. For those who understand it, there's nothing wrong with cash backs. However, the majority of people don't take the time to understand it, and banks use that to their advantage. You're switching mortgage provider, and well done, but despite the amount of posts around switching on this forum you are in the minority. The majority of customers are glad to be able to get the amount they want, take the cash back, and then stick with the same provider for the entire term.

    The cash backs themselves are also a way to get around CBI LTV rules a little. I'd much prefer to see cash back removed, LTV of 92% allowed, and mortgage rates of 2.33% available (it currently is, but it's all a bit blurred).
     
  12. Butter_Spreader

    Butter_Spreader Registered User

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    I recently, early 2018, completed my second switch from EBS (3.3% Variable) to Perm TSB (2.95% 3yr Fxd + 2% Cashback regular) on a 250k mortgage. My original switch was from Perm TSB (3.3% Variable i think?) to EBS (3.3% Variable) in late 2016. Got the lumpsum cashback in both cases. The only stipulation I heard from Perm TSB was we must have been with the previous mortgage provider for more than 12 months. I do have a current account with Perm TSB, not sure if that played any role in being accepted back to perm tsb?

    On these cashback deals generally I think they are great, almost too good to be true really, but it seems the inertia of the many is great for the motivated few switchers. I suspect there is a level of switching (which in the Irish market seems a long way off) at which these deals would not be profitable for the banks and competition would revert to predominantly interest rate based competition.
     
  13. pauric

    pauric Frequent Poster

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    I've been refused a switcher mortgage because of the 24 month rule, I've been with EBS for 13 months.
     
    Coldwarrior likes this.
  14. Sean Og

    Sean Og Registered User

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    Who did you try to switch to?
     
  15. pauric

    pauric Frequent Poster

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    PTSB
     
  16. cliqueentour

    cliqueentour Registered User

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    They require you to be with existing lender for 24 months. That's why you were refused. BOI require you with your current lender 12 months.

    EBS have no such requirement neither do KBC. Ulster bank is 6 months requirement.
     
  17. Mixer2017

    Mixer2017 Registered User

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    Were PTSB upfront about this 24 month rule as I still don't see any mention of it on their website? I've found more incompetence since I posted on this but thankfully in my favour this time with Ulster Banks 2yr fixed 2.3% rate + 1 additional year to 2021 and €250 compensation! Get it before its gone is my advice!
     
    Sean Og likes this.