MSE News: Bank of Ireland to raise mortgage SVR

Thrugelmir

MiserlyMartin wrote: »

Funny how Osbourne described QE as a 'desperate act of a desperate government' while Labour were in power, but then he has been doing it via Mervyn King ever since!

Has he? GO doesn't work at the BOE. The BOE is independent.

Without QE interest rates would 1.5% to 2.5% higher.

QE is merely shielding the impact of what's to come.

madoona

Thrugelmir wrote: »

Two months after obtaining my first mortgage, it rose 1% a month for four consecutive months from 10% to 14%.

Unprecedented?

Obviously a newbie in the world of finance.

Nope not a Newbie my first mortgage was at 15% but that was on a semi -detached that cost £18950 and with a larger deposit and smaller mortgage , less wages of course but the salary to loan ratio was right - BOI flogged products to get the mortgage business they should stand by what they sold and stop changing the rules. PPI comes to mind . Banks do make mistakes and the consumer should not be made to pay for their mistakes. 'Banks required to hold more capital reserves' that their reason for the hike says who - do you know what is in their Reserves cos I sure as hell don't - do you believe everything banks tell you?

GMS

madoona wrote: »

Nope not a Newbie my first mortgage was at 15% but that was on a semi -detached that cost £18950 and with a larger deposit and smaller mortgage , less wages of course but the salary to loan ratio was right - BOI flogged products to get the mortgage business they should stand by what they sold and stop changing the rules. PPI comes to mind . Banks do make mistakes and the consumer should not be made to pay for their mistakes. 'Banks required to hold more capital reserves' that their reason for the hike says who - do you know what is in their Reserves cos I sure as hell don't - do you believe everything banks tell you?

What was the SVR quoted as on your BofI mortgage which you agreed to?

Thrugelmir

madoona wrote: »

BOI flogged products to get the mortgage business they should stand by what they sold and stop changing the rules.

Why should the Irish taxpayer subsidise your mortgages?

You can moan and groan but the golden years are over for property for the foreseeable future.

Of course as interest rates rise then property values will fall. So those that have treated property as an investment not just a home. Will be the losers.

Thrugelmir

madoona wrote: »

Nope not a Newbie my first mortgage was at 15%

I was referring to your mortgage broker. Not directed at you. :beer:

opinions4u

madoona wrote: »

BOI flogged products to get the mortgage business they should stand by what they sold and stop changing the rules.

They haven't changed any rule. The link to BofE was dated. That time has now come. So the SVR will reflect funding costs. Funding costs to a crock like BOI will be more expensive than to a more stable bank like HSBC.

Banks do make mistakes and the consumer should not be made to pay for their mistakes.

Consumers also make mistakes. Failing to budget for inevitable interest rate rises. Failing to allocated the benefits of low mortgage rates to debt reduction. In all industries, consumer fortune is linked to the buiness they purchase from.

'Banks required to hold more capital reserves' that their reason for the hike says who - do you know what is in their Reserves cos I sure as hell don't - do you believe everything banks tell you?

I'm sure you'll find the information in their audited reports and accounts.

The reality is that Irish banks need more tier one capital than a typical British bank because their fortunes are more exposed / linked to an economy that has hit the rocks much harder than the UK.

Of course, if BOI went bump and your mortgage was sold on to a new lender it's likely that the SVR would go up much, much more.

Thrugelmir

madoona wrote: »

'Banks required to hold more capital reserves' that their reason for the hike says who - do you know what is in their Reserves cos I sure as hell don't - do you believe everything banks tell you?

You asked. :eek:

BASEL III is a global regulatory standard on bank capital adequacy, stress testing and market liquidity risk agreed upon by the members of the Basel Committee on Banking Supervision in 2010-11.
This, the third of the Basel Accords (see Basel I, Basel II) was developed in response to the deficiencies in financial regulation revealed by the late-2000s financial crisis. Basel III strengthens bank capital requirements and introduces new regulatory requirements on bank liquidity and bank leverage. For instance, the change in the calculation of loan risk in Basel II which some consider a causal factor in the credit bubble prior to the 2007-8 collapse: in Basel II one of the principal factors of financial risk management was out-sourced to companies that were not subject to supervision: credit rating agencies. Ratings of creditworthiness and of bonds, financial bundles and various other financial instruments were conducted without supervision by official agencies, leading to AAA ratings on mortgage-backed securities, credit default swaps and other instruments that proved in practice to be extremely bad credit risks. In Basel III a more formal scenario analysis is applied (three official scenarios from regulators, with ratings agencies and firms urged to apply more extreme ones).

Answer your question?

PS doesn't come into full effect until 2018. So plenty of credit tightening to follow yet

madoona

Thrugelmir wrote: »

You appear to be complaining as its affecting the profit on your BTL empire. Nothing what so ever to do with the wider economy.

Wrong my BTL empire doesn't exist ( negative equity) the BTL was with Bristol and West , I resisted the move to BOI to no avail , BOI rates for BTL is 6.99% they are Mickey Mouse playing around in the BTL market , which is what i thought when they proposed the take over worst thing that could have happened and not my choice . Oh there I go again a consumer with no choices , it is the wider picture accept the facts BTL were also widely mis sold -anyone checking the yield values when product was sold - no they were tripping over themselves to do the BTL business . So BW and BOI should stand by the product they sold fixed rate then base rate plus 1.75% . They didn't mention if things got tough they would hike SVR up by 50% . Don't feel too sorry for my tenants 3 families with small children when they are out on the streets because the land lady has been spiked with an unprecedented , unreasonable and unwelcome interest rate increase of 50% and can no longer afford the mortgages . Oh and when more BTL go to repossession don't expect the rental prices to come down to much. Not sure what you got against BTL if I had a choice I would sell up - you buying ? or are the rates to high for you to invest . So I rest my case that there will be a knock on effect on the wider economy. Can't put everything right in one go but stopping Gung ho banks putting up SVRs will be a start.

kingstreet

Hallelujah!

the change in the calculation of loan risk in Basel II which some consider a causal factor in the credit bubble prior to the 2007-8 collapse: in Basel II one of the principal factors of financial risk management was out-sourced to companies that were not subject to supervision: credit rating agencies. Ratings of creditworthiness and of bonds, financial bundles and various other financial instruments were conducted without supervision by official agencies, leading to AAA ratings on mortgage-backed securities, credit default swaps and other instruments that proved in practice to be extremely bad credit risks

First time I've actually seen that written down. I've been saying it for four years.

Thanks, Thrug.

ILW

madoona wrote: »

Its a 50% hike - so you go to purchase any other product for example - you need some petrol - oh but it gone up by 50% so you pay up- then get to work park the car but the car park has gone up by 50% oh so you pay up- then you go for Lunch but the price has gone up by 50% so you pay up - I don't think so a 1.5 % increase on most things , let alone your mortgage is unprecedented , unreasonable and unwelcome , clearly BOI has acted out of the ordinary and yet you find it quite normal. IF they are allowed to get away with this it paves the way for others to do like wise so its not "just about the money "is about what drove them to do this and is it legal ? Consumers have the right to defend their positions in the banking fiasco and against rogue lenders wishing to pull out of the market . Plus the BOI- HELPLINE is SMUG very very SMUG . BOI is not likely to help anyone but themselves . How Many People ARE on the Edge and may lose their houses becuse of this HIKE, how many can't move to other products , did you know they have removed self certification a dirty word now - Interest only mortgage another dirty word but this type of mortgage was widely sold in 2003 and pushed to the maximum. Existing customers should stay on current SVR and the new SVR rate as you think it is so reasonable, could be for new customers then we can see how they fair with the new uptake. But of course they will change that as they have done at the banks with two SVRS - SVRS should not be mucked about with to suit BANKS ., because that is what is beginning to happen.

It's only 50% because the starting rate is so low. If rates were 12% a 1.5% increase would not seem much. Just be grateful for the last few years.