Cheap loans for the Irish

StevieJ

Looks like the British/Banks govt don't have much faith in Sterling :eek: Then again I
don't have much faith in the Euro I hope they are not going to lose stacks of money again on a bad decision.


Ray Boulger, of John Charcol, the broker, said: “It seems strange that UK borrowers are being charged so much more than their Irish counterparts when the economic conditions in both countries are similar.”


Halifax, part of the Lloyds Banking Group, is charging 2.74 per cent for a two-year fixed-rate deal to first-time buyers in Dublin. A five-year fixed-rate deal would cost borrowers in its home town of Edinburgh 6.14 per cent.Royal Bank of Scotland (RBS) is charging 2.95 per cent for a new mortgage in Ireland; in the UK, it charges 5.99 per cent for a similar product.


http://www.timesonline.co.uk/tol/money/property_and_mortgages/article6182123.ece

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Just goes to show what short memories, or in some cases no memory at all, that people in the big wide world have, when we think home loans of 5-6% are deemed expensive. To put it in context, anyone who's mortgage is coming to an end this year after 25 years of payments, is likley to think todays rates are very reasonable indeed, compared to their 25 year borrowing stint between 1984 and 2009.

The thing that makes todays rates seem expensive is the gargantuan size of the loan that has to be taken out, and then serviced Things were bad in the early '90's with 15% interest rates, repossessions peaked at 75,000. Yet now, if rates went to 15%, repossessions would be measured in the millions I believe.

Progress ??, I don't think so.

StevieJ

The again if interest rates were at 15% house prices would be increasing at 30% p.a. and wage settlements probably 25% I remember my gyandad telling me he could take my gyan to the pictures buy a couple of beers and a packet of Woodies and still come back with change from a penny (old one at that)

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StevieJ wrote: »

The again if interest rates were at 15% house prices would be increasing at 30% p.a.

How so ?, when rates were 15% house prices were falling, and continued to do so for 4 years, even though taxes, the deficit and unemployment were going down, and just to add as a caveat, all these particular markers are going in the opposite direction now.

the_ash_and_the_oak

not really feeling 15% interest rates in late 89 were that much of a problem tbh given that in 84 rates hit 12%, in 85 14%, in 86 12%, in 87 10%, and in 88 13%. feel that the rise to 15% shouldn't really have been that much of a change for the majority of people who borrowed over the previous 5 years imo

admittedly there was a 6 month period between late 87 and june 88 where they went below 9% (and even below 8% for a couple of months) - it could have been somewhat tougher for these particular borrowers of took out loans during this time (kinda feeling a change from 7.8 to 13.8 would almost have been as bad as a change from 3% to 6% now imo)

bendix

ad9898 wrote: »

How so ?, when rates were 15% house prices were falling, and continued to do so for 4 years, even though taxes, the deficit and unemployment were going down, and just to add as a caveat, all these particular markers are going in the opposite direction now.

Completely agree. The idea that interest rates at 15% would necessarily mean house prices are rising at 20-30% is palpable nonsense.

The problem with this forum is that so many senior members make outlandish statements that look like statements of historical fact, when in fact they are out and out rubbish and have no basis in fact.

StevieJ

bendix wrote: »

Completely agree. The idea that interest rates at 15% would necessarily mean house prices are rising at 20-30% is palpable nonsense.

The problem with this forum is that so many senior members make outlandish statements that look like statements of historical fact, when in fact they are out and out rubbish and have no basis in fact.

If interest rates rose from 0.5% to 15% it would be in response to a extreme shock to the economy most probably caused by very high inflation, including wage and asset. Grateful if you could explain the scenario where this would not be the case.
If not stick to doing the laundry

kennyboy66_2

ad9898 wrote: »

How so ?, when rates were 15% house prices were falling, and continued to do so for 4 years, even though taxes, the deficit and unemployment were going down, and just to add as a caveat, all these particular markers are going in the opposite direction now.

As it happens, when base rates where highest in the last cycle (Nov 88 - Sep 91), house prices were effectively static in nominal terms (obviously masking hefty real losses).

It was when interest rates came down that nominal prices fell.

Which 4 years are you talking about - I would be amazed if taxes, fiscal deficit and unemployment fell in any 4 year period in the 1990's prior to 1997.

Really2

kennyboy66 wrote: »

As it happens, when base rates where highest in the last cycle (Nov 88 - Sep 91), house prices were effectively static in nominal terms (obviously masking hefty real losses).

It was when interest rates came down that nominal prices fell.

True kenny most use the HPC graph as law but that is in "real terms" not nominal, nominaly they virtualy stod still, many on here know this as the nominal price link as been posted many times. (here it is again)
http://www.mortgageguideuk.co.uk/housing/uk-house-price-index.html

So in real terms they may have fell but in real terms so did every mortgage as it was inflation causing the real terms falls.

So in 10% inflation and stagnent prices the folowing happens.

House prices fall 10% in real terms and Mortgage debt falls 10% in real terms.

I dont thnk many HPC'ers belive the Nationwide "real prices" dips were caused by inflation and not realy by nominal drops.

the_ash_and_the_oak

Really2 wrote: »

True kenny most use the HPC graph as law but that is in "real terms" not nominal, nominaly they virtualy stod still, many on here know this as the nominal price link as been posted many times. (here it is again)
http://www.mortgageguideuk.co.uk/housing/uk-house-price-index.html

So in real terms they may have fell but in real terms so did every mortgage as it was inflation causing the real terms falls.

So in 10% inflation and stagnent prices the folowing happens.

House prices fall 10% in real terms and Mortgage debt falls 10% in real terms.

I dont thnk many HPC'ers belive the Nationwide "real prices" dips were caused by inflation and not realy by nominal drops.

quite a few misconceptions about last time around imo (the other main one being crash was caused by high interest rates)

Really2

the_ash_and_the_oak wrote: »

quite a few misconceptions about last time around imo (the other main one being crash was caused by high interest rates)

True

High IR only casues defaults and defaults will only be a minor %age of the figures in any crash.