Hi Daffodils
We have had this discussion elsewhere but you seem to be assuming that performing trackers are loss making for our banks and need to be "subsidised".
If that was the case, ask yourself why our banks are not offering discounts for borrowers on trackers to repay their mortgages ahead of schedule? They're not because trackers are not loss making.
The primary reason why mortgage rates in Ireland are now high relative to other euro zone jurisdictions is the level of defaulting borrowers. Roughly one in ten mortgage borrowers here are in default - the rest of us have to carry that cost.
Fundamentally it's not more complicated then that.
While I think that variable (and fixed) rates still seem too high and should come down I still wonder if some sort of levy on cheap tracker customers should not also be part of the solution to the arrears/non sustainability problem? I could be totally wrong - but why not?
Couldn't agree more with daffodils comment about us carrying the can for defaulting mortgages. It might not say it in my contract that I have to carry the can for defaulting mortgages or for the fact that the bank's left themselves open to the large losses on trackers but the fact is theyre allowed to charge whatever they like and get away with it by abusing the clause that says rates may change from time to time. Yes after all it is a variable rate mortgage but the fact that theyre abusing this means it needs to be regulated until such time as they learn manners. This law should be one where the state can impose it on them from time to time when it's deemed they're abusing their position and only lifted when they can show they're not abusing their position anymore.Hi Sarenco,
I agree that we are paying the cost of mortgages in default, the problem is that the cost can't be passed on to tracker mortgage holders only SVR's which isn't fair...
Couldn't agree more with daffodils comment about us carrying the can for defaulting mortgages. It might not say it in my contract that I have to carry the can for defaulting mortgages or for the fact that the bank's left themselves open to the large losses on trackers but the fact is theyre allowed to charge whatever they like and get away with it by abusing the clause that says rates may change from time to time. .
I have a tracker mortgage that went as high as 5.35% in Aug to Oct 2008. Why didn't SVR mortgage holders subsidize me at that time? This suggestions is simply preposterous.
As said above by Bronte the whole picture has to be looked at. Cost paid, Stamp Duty paid, term of loan etc....
Of course there is sympathy for svr holders being hit for higher rates but two wrongs don't make a right. The issue is the underlying problems in the Banks and the Banks seeking to recover by charging higher rates where they can, lowering deposit rates, seeking to use possibly vague contracts to get people off trackers, fees, etc etc.
I repeat my earlier comments, and particularly the comments along that lines that any tinkering with tracker rate mortgages, levies, taxes, any of that, would have the potential to destroy the market and set the Banks back significantly. Arrears would increase, defaults, more conflict, etc. Not to mention inevitable avalanche of protests, legal cases and issues, etc.
I was prudent in taking out a pension early on and funding it generously.Totally agree with G123, you cannot punish someone retrospectively for making a good choice at a point in time.
..... I have to carry the can for defaulting mortgages or for the fact that the bank's left themselves open to the large losses on trackers ......
I was prudent in taking out a pension early on and funding it generously.
I am being punished for that decision on an ongoing basis for several years now.
I agree with a lot of what you say but the problem is were carrying the entire can for getting the banks back to profitability when we've all already bailed them out before. No problem with carrying my share of the can but a huge problem with the amount were carrying.What does sharing the cost of the mortgage market mean in practice? Surely you can see its a much more complex issue than simply interest rates?
A dysfunctional banking system has many features and causes, higher rates in certain cases, over lending, over prices houses, etc.
No one on this post is saying it's the problem of the svr holders only, where did you get that idea from? No one on this post has said anything like that.
However, the topic of this post is whether tracker mortgages should be levied? That is what many of the people think is unfair or ridiculous. You can't simply look at tracker mortgages in isolation. There are a whole variety of other relevant points, prices, duration, etc.
I gave the earlier practical example of my neighbour next door buying their house for half what I paid. They have svr, I have tracker. My monthly payments are still quite a lot higher.
Should I seriously be levied a charge to allow their rate and monthly payments to be reduced and me pay more, simply because I bought a house for my family when prices were high? This would be ridiculous. It would be equally ridiculous for me to ask for them to be charged an amount to reduce my mortgage, just because I bought when prices were inflated and they bought at a different time.
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