Tensions are High in the Mortgage Market

This post is in reference to It’s time to shout ‘stop’ on excessive charges by Brendan Burgess and Banks warned over cashback mortgage deals by Donal O’Donovan. Both published on June 16 2017 in the Independent.

Interest rates are high for non-tracker mortgages and banks are offering cashback deals to manipulate customers.

Everyone is accusing everyone today in the mortgage market in Ireland with interest rates the highest in the European Union. The Competition and Consumer Protections Commission (CCPC) have sat idly by for the past years as the interest rates are rising when the CCPC is designed and paid by the taxpayer to protect the consumers. CCPC came out with a report yesterday stating Ireland needs more competition, long-term strategy, vision and more committees. No suggestions in the report have a solution for the short-term.

The Government, Central Bank, and the CCPC wants everyone to be patient and the competition with drive down mortgage rate… but how long from now? Government and the Central Bank have been saying this for the past three years and nothing has changed.

Now …

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Karl Deeter Mentioned in the Press

You can find an article at this link which mentions Karl Deeter, apart of Irish Mortgage Brokers – Bank accused of ‘gouging’ loyal customers cuts its fixed rates on June 15 2017. Article by Charlie Weston in the Independent.

Permanent TSB, a state-rescued bank, has been increasingly cutting fixed rates in response to being accused of manipulating their clients. The bank has lowered it’s two-year fixed mortgages from 7.25% to 4.20% and three-year fixed mortgages from 8.75% to 4.20%. They have almost halved both of their fixed rate mortgages but the variable rate at the bank has remained the same.

The Central Bank has noticed an increase of fixed variable rates compared to variable for both new borrowers and existing ones. Therefore, banks have been reducing fixed rates to increase competition amongst other banks. This will prevent clients to switching to other banks for better deals.

The bank also extended a 2% cashback on all new mortgage drawdowns, supposed to end this month but got extended to the end of the year.

Karl Deeter was mentioned accusing the bank …

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Mortgage Market Update

The Financial Broker gives readers an overview on currently property prices and mortgage market conditions.

The Central Statistics Office published a report showing price inflation on property had increased 10.7% in the past year up to February. A similar report reveal how the number of newly build housing last year was 14,932 units when estimates denote a demand of up to 50,000 units. These numbers illustrate a problem in the current mortgage market, which this article pinpoints the causes of. The author laments about rising property prices, arguing that many potential home buyers have missed out on the prime time to purchase property, and are currently no long capable of affording the housing of their choice at an acceptable price.

The author attributes the current housing price and rent inflation in Ireland as consequences of a lack of supply in urban areas instead of lax macro-prudential regulations. In fact, she argues that current Central Bank regulations are too restrictive, and thus have prevented demanders from being able to locate and buy affordable housing. While the prudential regulations have lowered the …

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Pat Kenny Show on Newstalk 106, featuring Irish Mortgage Brokers

Pat Kenny had Lorcan Sirr from DIT and Karl Deeter from our company on to talk about the property market in particular in light of the changes announced by the Central Bank.

The conversation covered many topics in the market and outlined where so many issues in housing are arising.

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2016 Mortgage lending rules submission by Irish Mortgage Brokers

We sent our research and thoughts on the lending rules to the Central Bank as part of their industry consultation process regarding the existing mortgage lending rules.

While we are critical of them in particular for first time buyers, we haven’t had an issue on other aspects of it (such as controls for investors). The submission argues with supporting evidence for 90% loans for first time buyers to be available generally but to keep other controls generally in place, or to do nothing at all and give the adjustments more time to bed in.

Submission is here: 2016 Central Bank macroprudential rules submission Irish Mortgage Brokers

The findings of a survey carried out by Behavior and Attitudes of clients of Irish Mortgage Brokers, DNG and Hooke & MacDonald which was mentioned in the press is also available here: 2016 MacroPrudential review – survey findings

 

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Newstalk: Breakfast show speaks to Irish Mortgage Brokers

We were pleased to feature on Newstalk’s ‘Breakfast Show’ this week, to our surprise we became an association! To clarify, that was just a title oversight by the presenter, we are still our plain old regular selves working as brokers.

The piece was questioning the validity or need for first time buyer type grants and what it could mean for both buyers and the industry.

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How to knock €138,000 off your mortgage?!

This was an interesting piece by Louise McBride in the Sunday Independent. The assumptions were based on a fairly hefty mortgage figure, but the general idea remains strong, that if you get a lower mortgage rate you can save money.

Our contribution was to say that in an ere of low interest rates and with rates falling that “The banks all know that interest rates are coming down – and that one way to kill the switcher market is to get more people onto fixed rate mortgages,” said Karl Deeter of Irish Mortgage Brokers. “Banks are playing a defensive game. They’re not competing on variable rates – they’re competing on fixed rates instead.”

To us this is simplistic but also true, if banks fear attrition of their performing loan book the best thing you can do is take high variable margin from those willing to pay it, or who aren’t bothered by it (as is common with older loans) or to defend your position by locking in potential switchers seeking value by offering them value in return for commitment …

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Paying off a mortgage early, how to do it according to the experts.

This is a video about paying off a mortgage early. This is generally a good idea, being debt free is a great landmark in a persons financial journey. The other thing that we often forget to focus on is that overpayments are a brand of ‘savings’, if we thought about this more than consumption there would be more personal wealth staying with people rather than their creditors!

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Irish Times mentions Irish Mortgage Brokers on ECB rate move

The Irish Times mentioned Irish Mortgage Brokers in their story by Arthur Beesley and Eoin Burke-Kennedy on the rate cut by the ECB from 0.05% to 0%. The implications for borrowers are minimal, it’s more about ‘signalling’ to the market, the good news for debtors is that rates look set to stay low, which is awful news for savers.

“Mortgage broker Karl Deeter said monthly repayments on a 25-year €200,000 loan would drop by €5. The refusal of Irish banks to pass a succession of ECB rate cuts to variable rate mortgages has long been contentious.”

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Newstalk: Pat Kenny talks to Karl Deeter & Tom Parlon, 7th March 2016

Pat Kenny had Karl Deeter from Irish Mortgage Brokers on his show in studio and Tom Parlon on to discuss the current state of play in the Irish property market and to analyse why there wasn’t more construction and what the issues were given that there is a shortage of homes in the capital.

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