ECB cuts rates to 2.5% – tracker mortgage interest rates benefit.

Tracker mortgages are a mortgage that is tied to some form of base, be it the ECB base rate or the Euribor, in residential lending it tends to be the ECB in commercial it tends to be the Euribor. Today interest rates were reduced by a further 0.75% giving a new base rate of 2.5%, which is the lowest it has been since March of 2006,the Euribor is now at 3.743% and will see the base rate drop filter through in the coming days.

Commercial loans tend to follow the Euribor, specifically the 3 month money which banks actually tend to use to finance most of their operations. The way that banks operate is to sell long term but finance short term. This is where they create their margin and its based on the yield curve, part of the problem in the last 12 months was a yield curve inversion which made lending difficult and was a …

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Best mortgage interest rates for first time buyers

The current market is heavily weighted in favour of the buyer and for that reason we have seen more first time buyers interested in finding out how much they may qualify for, albeit that they may not plan to buy any time soon, many people still seem to be holding out for the ‘market bottom’, and naturally we don’t know when that time is, will be, or was (because it could have been last week, only time will tell), it is only with hindsight that the actual bottom can ever be accurately identified.

Another reason is that there are expected rate cuts coming, the next will be delivered at the 4th of December meeting of the ECB next Thursday. Many potential buyers are thus going to wait to see what kind of drop is delivered, if Trichet indicates that another may be in the pipeline it will have a strange effect of causing the inverse of what monetary policy is intended for.

The question we are getting recently is ‘what …

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Mark to Market valuations.

This is an exerpt of Steve Forbes talking about mark to market valuations and some of his feelings on the markets as well as where we are set to go from here. He makes the argument that mark to market is a bad idea and that we should use traditional methods of cost & depreciation because the market skews valuations to strongly at a time like this.

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The end of Commissions?

The FSA (Financial Services Authority) in the UK have said that they are not ruling out a future ban on commissions. In the UK financial advisers work on both fees and commissions, however, there is no mention of how they would hope to balance the competition between broker and direct channels.

Currently there are many consumers who cannot afford fees, in Ireland financial advisers work (in general) without fees, relying on commissions for their incomes.  In Ireland consumers have gotten used to a market where they don’t pay brokers, they enjoy independent advice at no difference in cost to that of going through a direct channel (i.e.: walking into a bank where they cannot give you independent advice).

However, if, in the morning the Financial Regulator followed the lead of the FSA and tried to end commissions it would cause a huge market distortion because peoples attitudes to fees would actually drive them out of …

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Bailout Abuse – distortions occur within 24 hours of Finance Bill

It is no secret that your author is anti-intervention, we speak at times about market distortions caused by government intervention. The recent finance bill was barely born when Irish Bankers chose to abuse some of the security and opportunities it brought about.

First of all we saw an email go out from Irish Nationwide in the UK going out touting deposit business because the bank was now fully backed by the government. One oversight we will see is that we are now going to do the job of HM Treasury. How? Simply put, the current bill backs Irish banks, not only here, but their branches abroad as well. What that translates into is the Irish state backing sterling deposits for sterling/UK based customers. Obviously there is no issue with clients themselves, they didn’t initiate the finance bill, but is it really the responsibility of the Irish state to extend this protection to other nations?

A further issue is that it will distort …

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You must be thinking of a different Karl Deeter mortgage guy.

I have been nominated for an Irish Internet Association net-visionary award as best business blogger [God: the irony in your humour is noted]. I guess the lonesome path of reading and then interpreting and writing endless financial stuff is not just a cure for insomnia, it is also a route to recognition, and frankly I’m really chuffed. I had a look at the competition and was even more impressed – have a look at who I’m gonna get whooped by.

The Blacknight Blog: Quality blog on all things technology, personally I like this company, in saying that we are a client of theirs too which is the best vote of confidence we can give! Remember: talk is cheap, top quality hosting isn’t, we gladly pay because they are the best at what they do.

Spicendipity: A blog about food – who can say they wouldn’t love this one? I’ll be checking back here regularly! The way to win a mans heart is through his …

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Where is my bailout?

The average investor has seen their portfolio decrease in value by about 20%, the average property owner is not far off that either. The economy is slowing down and everything seems to be more expensive, so today’s question is: Where’s my bailout?

I am not Bear Stearns, or IndyMac, I’m also not Northern Rock, Fortis or Bradford & Bingley, I am not any number of financial institutions that will soon be set to receive money from the Fed, and even by third world terms I am not ‘too big to fail’. The fact of the matter is that I’m all alone on this one, and I don’t have enough faith in our leaders that I would be comfortable ‘leaving it up to them’. Instead, I want a port in this storm.

Now we can sit back and face the inflation, the inflation that will one day ‘inflate away …

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A different idea for bailing out the property sector.

There is a bailout coming, we saw the makings of it for a long time, first there was the talk of the central bank about the underlying strength of Irish financial institutions, the constant lobbying for something to be done for the property & construction sector, then articles stating blatantly that a bailout would occur if there were problems. Now we have read that the government are going to make plans to help first time buyers because mortgage funding is not as readily available as it used to be.

Let us start on the right foot, first time buyers never had it easy to begin with (I actually did an article on this exact topic before – click here). They were either being hit with stamp duty, the need for deposits or other issues. Now the Government are looking to bail out people who haven’t even bought property yet and that is an error.

There are a few …

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New mortgage trends – Will Irish lending turn American?

Today we received an email from Haven Mortgages about their updated interest rates, we were pleasantly surprised because for the first time in a long time there were some very attractive long fixed rates. Recently banks have had no choice other than to lash on margin in order to pay for the funds they were securing. The new 10 year fixed rate from Haven is 5.66% it is also the cheapest rate they offer.

What does this mean for a borrower? Well, on one hand we have Trichet saying that he doesn’t see inflation coming under control until 2010 and as the ECB’s only job is to control inflation it would therefore stand to reason that we won’t see a rate cut any time soon. Economists and commentators (myself included) have made some bad forecasts and for that reason I would be prone to feel that the rate outlook is uncertain, at best the current climate is guesswork. This means that a borrower would do well to buy some stability, a way of doing this …

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