Greed knows no bounds: Rise in mortgage rates

Greed knows no bounds: Rise in mortgage rates

Although the European Central Bank (ECB) left its rates unchanged yesterday for the 11th month in a row Bank of Ireland followed AIB today by announcing an increase in their standard-variable rates. The increase from 2.6% to 3.1% for both existing and new customers will add an extra €80 a month to the repayments of a €300,000 mortgage.

Thousands of homeowners who are vulnerable (and already hard-pressed,) to these rising mortgage rates are now being warned that they have seven days to act. Commenting on the rate rises Karl Deeter of Irish Mortgage Brokers said, “There is a very short window of opportunity now for those seeking security around the level of their future mortgage repayments to act fast before the rates increase further.” He continued, “These rises come in a year of cuts, levies, higher tax costs and deflation. It seems their greed knows no bounds.” …

Permanent TSB has hiked up its standard-variable rates twice since last summer by 1%, the EBS Building Society is also set to follow Bank of Ireland’s hike with rises within days.

Have Your Say: Rise in mortgage rates

  • Are they fair?
  • Are they justified?
There are 27 comments for this article
  1. Gemma at 3:36 pm

    I would think Ayrelle, it may be because poor Greece is now being charged an exobitant rate for their borrowings, and there is money to be made on lending to them? Maybe a financial person might clarify this. Poor Greece, poor us, nothing like a kick when you are down.

  2. Aryelle Anderson at 10:39 pm

    How on earth can the Irish Government give away €128 million euro of our tax payers money to Greece to bail them out of their financial mess and they refuse point blank to even consider helping out the severely stretched Irish homeowner and those Irish people who are losing their homes every week in repossessions by not giving any direction to the banks that the Irish people need so badly now. How can the Irish government give freely this exorbitant amount of our money to Greece and not one cent to help their own people.
    Why have the Irish people lost their sense of outrage?
    Are we all under hypnosis or what?
    Why are we allowing our basic human rights to be subjugated again and again?
    In any other country, the people would stand up for their basic right to have a roof over their heads. When are we going to stand up for ourselves?

  3. Rosemary at 10:26 pm

    I simply cannot believe it. I am redundant professional after 30 years service to my company and this country. If anyone wants to join me in a protest march please email me immediately. We will name a date and time. We cannot be treated like this any longer by a completely incompedent government. This country should be about all it citizans not the very wealthy few and their friends in government.But I fear the people of this country will never learn and vote the same people in again and again. I fear for my children and grandchildren. Get up and be counted THE REAL PEOPLE OF IRELAND………NOW BEFORE ITS TOO LATE. WHERE ARE THE REAL MEN AND WOMEN OF THIS COUNTRY?

    • Gemma at 3:07 pm

      I am with Rosemary and all of those above. Would be very interested in taking part in a protest, enough is enough, they need to go before they do any more damage. By the way, is anyone au fait with Shell to Sea and what is happening with all that cash, we should be one of the wealthiest countries in Europe for God’s sake!! What is going on, I keep thinking I am in the Alice in Wonderland movie!

  4. christian higgins at 1:45 pm

    Hopefully people will learn their lesson now having seen another side to the way banks operate and how they will twist the screw at the worst possible time on people. not everyone is clued in when getting their 1st mortgage. They are tempted in by discounts as 1st time buyers by the banks and once in the door a year or two later are hit with rate hikes. The financial regulator has the cheek to still put ad’s out in the media and is expected to be taken seriously. what a joke.

  5. kate12 at 1:40 pm

    we are the mugs again who are having to pay for the mess that a selected few got us into, we were brought up to believe that owning your own home and having a mortgage, etc was the way to go. A lot of decent ordinary people have been left in negative equity and/or with no job, unable to make ends meet, this just adds to their stress and is totally unfair and unjustified.

  6. jaime galan at 9:23 am

    This is rather unfair and not justifiable

  7. Tom at 4:35 am

    This is one of the chief reasons I emigrated recently. The whole system in Ireland is wrong from top to toe. No cohesion between Govt, Banks and Trade Unions. The me fein culture is alive and well. All the leaders need to grow up and eradicate this culture of position minding. If you are in a position of leadership you have to be prepared to give it up if its for the good of the whole.

    Tough decisions have to be taken. Is there anyone in a position of clout that can say, “come lads its our job to get us out of this lets cop on and work together” or are the people in power caught up in red tape meaning they really dont have adequate power?

    Its just bicker after bicker to grab headlines instead of thorough graft which is needed. Why doesn’t somebody in cabinet or in the banks or in the Trade Unions step up to the plate and try and create an air of working together instead of constant me fein mentality that is been banded about. Who has offered solutions on how the country will progress? Who has offered solutions further than subsistence existence for the next 10 years. What has Ireland economically really got? Abundance of mining resources? No, Abundance of manufacturing? No. What basic fundamentals will our economy be built on for us to excel in the future? To the people in power, sit down and make a decision and implement it. Dont just talk about it or suggest it. Formulate it, put the heads down and go for it. Be prepared to risk your own position on it. Thats leadership.

    The Green Economy and attraction of investment through the diaspora are good ideas. ACT ON THEM NOW. What the hell has the country got to loose by trying it? We have nothing substantial economically but we do geographically both in location on Western Europe and our diaspora in every corner of the globe.

    Personally I want to do my bit and put some money back into the Irish economy. Its small but Barack Obama proved that if you can get enough small donations you can achieve your financial goal. But to see the level of inefficiency in how affairs tackled in the powers that be I dont have much confidence at all in how that money would be managed.

    It breaks my heart to see how things have got and that another generation have to leave again.

    • Anne at 7:43 am

      Tom,
      I hear your frustration with the Irish banking and political climate. However, as an American I can assure you that Barack Obama has done little to nothing to create jobs or stabilize the American economy. We are so in debt and Obama adds to it daily that I cannot see us ever getting out of it.
      The American media loves to paint the picture that the recession is over. But as an average American trying to earn a living and barely scraping by I just don’t see it. Hopefully change will come about via the next election, but what choice do we Americans have either? War mongering Republicans and spend happy, regulations crazed Demcrats? What a choice!
      I feel for Ireland but I don’t understand how your emigrating is helping your country. You call for someone to stand up and speak out yet you have left the country. How is emigrating en mass going to help the country and those left behind. Sounds as greedy as the bankers and another save myself ploy.
      If you really love and believe in your country you should have stayed and raised your voice through protest, the election process, etc to bring about change. Bailing out is not an answer. Why are you not in the front of the line yelling at the top of your lungs at the government at how Greece can be given huge sums of money yet the average Irish citizen is left to fend for themselves? Why are you not present in Ireland picketing the government? If you have so many questions that need answering why are you not in Ireland asking them and demanding answers and change? You are right, someone needs to speak up, why did you leave and not include your voice in the throng?

  8. Gerald Farrelly at 1:17 am

    We are been shafted by a very bad goverment and even worse bankers who’d be jailed if they were in america by now.

  9. virginia keane at 7:19 pm

    In this time of great financal difficulty the average person feels like the have been kicked while the are down.there one step on the property ladder has been snatched away by the very people who gave it to them.I THINK THAT very soon the people of this country are going to start fighting back.

  10. PETER JONES at 7:13 pm

    Arent you all really glad you voted fianna fail in the last election ? and what really is amazing is some people will be daft enough to vote for them again .why the bank of fianna fail was bailed out I will never know nor I suppose will anyone else outside the golden circle.

  11. anon at 7:00 pm

    If i was in a postion i too would bail out of this country. fed up the corrupt banks and finance houses.dont think a change of goverment will make a bit of difference,both main partys are right wing and have a history of banking scandles.our children will be paying for this mess for along time to come.

  12. Brenda Larkin at 6:06 pm

    I fail to understand the logic of increasing mortgage rates when so many people cant pay their mortgages now anyway and many have lost their homes. Surely it makes financial sense to lend money to people at sensible rates because the banks and Building societies then make intrest on that money and the more mortgages the more intrest. Money would then fund itself once these institutions did not get involved in speculation and did what they are supposed to do–provide a service for the nation. It seems to me that only the filthy rich brass necked gangsters who have raped this country’ finances are the ones who are having a great time.
    It is so embarrassing too, internationally , to know everyone is aware how we have been ripped off and how we are taking it like frightened little lambs and not speaking out or taking action.
    Rant over!!!!!!!!!!!!!!!

  13. joe mcuullough at 2:32 pm

    I have had it up to my eye balls with this greedy little place, the banks are a disgrace and operate like seedy loan sharks.
    please to say I have sold up everything and fly out of here on monday, let other saps bail out the banks
    enough is enough.good luck to you all.

  14. steve griffin at 1:36 pm

    We the people need to take a long hard look in the mirror to see if we played any part in contributing to our current gloomy state -perhaps overreaching ourselves economically – from the top on down. Back in the early 90’s interest rates were at 14% and we were protected from ourselves by being prevented from borrowing money we could not pay back. Anyway we will only get back on track when every last one of us lowers his or her financial expectations and instill in our children that every penny we borrow has to be paid back at some stage.

    • H at 1:32 am

      Yes some people did play a part in creating “our current gloomy state” as you call it. They are called “bankers” (collective noun is “wunch” as in a “wunch of bankers”) and Finna Fail, all we all heard from Ahern/NcCreveey/Cowen was how fantastic our econmony was due to their brilliant leadership.

      Have you never heard of prudent lending? Surly the banks should have properly stress tested their loans? 20 years ago when we got our mortgage it was 80% of the house price on the basis of 2 1/2 times our joint income, who’s bright idea was it of offer 100%+ mortgages on the basis of 3 or 4 times a couples joint income? The greedy wunch of bankers who were only considering their own bonuses.

  15. Emmanuel Alabi at 1:31 pm

    This is rather unfair and not justifiable

  16. Ronan at 1:12 pm

    So these businesses are actually trying to make more money? For shame.

    The citizen bails out the bank so has an interest in the banks success, yet the methods necessary to increase the likelihood of that success cost the taxpayer yet more money.

    We prop up our betters one way or the other.

    Should I feel smug as a renter? After all I only get screwed the one way. Except of course for MY sins I pay for high rents twice – once for my own lodging and again via the artificial market support my tax euros pay for to help house masses in shitty bedsits for over €500 a month.

  17. Rachel Senior at 12:36 pm

    I think it’s disgusting the way we are being treated by our banks. They got us into this mess in the first place so why should we be the ones bailing them out?

    I am seriously thinking about selling up and leaving this sinking ship of a country.

  18. Jarlo at 12:31 pm

    Well, as I said last year, retrospective legislation should have been brought in creating an offence of economic treason punishable by hanging. That would have sorted the greedy b**tards out.

  19. Darren Rayner at 12:25 pm

    The pay cuts across both the Public and Private sectors were introduced when interest rates were at an all time low. These increases will be the reality check that could get rid of our this corrupt Government once and for all. People entered into large long term mortgages based on their earnings with a belief repayments would gradually get easier as their income increased. We are now in a position were our earnings cant match the contract we entered into. God help us all!!

  20. Tony Cain at 12:22 pm

    Typical!

    Unemployment still rising, many homeowners are out if work, small businesses can’t get loans or credit to continue trading.

    Banks have just been bailed out to the tune of €30-odd billion by NAMA, the normal guy on the street will be paying for this for years to come in taxes and now banks have the audacity to raise interest rates independently of the ECB. Why? It’s disgusting!

    Who’s bailing out Joe Public? No-one! This government needs to sort this out or go! How much longer are we going to sit around complaining without doing anything?

  21. johnnyblogs at 12:19 pm

    Whether they’re fair or unjustified is irrelevant at this point. The fact of the matter is that they are now a reality and as long as we maintain our ‘accepting’ old Irish attitude towards the despicable carry on of those with power and clout in this country, the longer we will remain over a barrel. If it was any other country, there would be riots on the streets and the continuous greed and corruption that our country is infested with, would have been obliterated long ago, along with the shower of clowns pretending to run the show. The average Irish citizen has been trampled on once again! We must be the laughing stock of the world at this point – An embarrassing excuse for a country! When are people going to draw the line and decide enough really is enough?

  22. Colm at 12:12 pm

    I seem to recall Brian Lenihan saying that he had scope to increase taxes because interest rates were low. As he is now the controlling shareholder in all our major banks you would expect he would have the ability to control these rate increases and the fact that he seems willing to allow them increase the screw on mortgage holders shows how low down his priority list is the well being of ordinary citizens.

    Assuming the German and French Economies start to see inflation in the second half of the year then the squeeze will really come hard. For every .5% increase by ECB you can expect the banks to add .75%. Therefore if as expected ECB rates increase by 2% by the end of 2011 you will see 3% increase by the banks. It is quite likely that many mortgages will be touching double digit interest rates (10%+)by Christmas 2011. There is no hope of the ECB taking pity on us as they only care about Germany and France and as long as the rest of us don’t become a drain on the fatherland’s resources (as Greece has recently dared to do) then they don’t give a damn about what our economies really need.

    Personally I have a tracker rate. I am becoming increasingly concerned that once the banks are finished picking over the remains of the variable rate holders then in the “national interest” I can see banks starting to make a case for breaking tracker contracts and generally what the banks want the government gives.

    Between double digit interest rates, 60%+ income tax, pension taxes, carbon taxes, water taxes, property taxes etc etc etc then life in Ireland in the Tens/Teens (2010-2019) is going to be very very grim.

  23. P McConnell at 12:05 pm

    Surely your commentary needs some balance?

    Your quote: “These rises come in a year of cuts, levies, higher tax costs and deflation. It seems their greed knows no bounds”

    The comment implies that the cuts, levies higher tax costs and deflation have been imposed by the banks??

    Interest rates are still WAY below long term averages – if mortgage holders cant pay at these rates what chance do they have when rates revert to the mean? Home owners had a responsibility to be realistic when they took the loans out in the first place.

    The banks need to be profitable for us to be able to stop supporting them. This means they need to generate returns from their customers, not support them. Reasonable interest rate hikes when their cost of funding has increased (over the last couple of years) should have been expected by mortgage holders.

    • H at 1:19 am

      Surely *YOUR* commentary needs some balance?

      But then you sound like a senior bank employee spurting out “the Interest rates are still WAY below long term averages” crap

      That do you mean “long term averages”, Irish averages? European averages? Suddenly we no longer have an Irish economy; we’re part of the European economy and should be paying “realistic” European interest rates.

      You also say “Reasonable interest rate hikes when their cost of funding has increased (over the last couple of years) should have been expected by mortgage holders”. Well I’m sorry, but a simple check on Inter bank lending rates shows that inter-banks RATES HAVE BEEN DROPPING for the past couple of years.

      Spineless Lenihan should have stood up to the banks two years ago when that came eating humble pie to the department of finance, instead he chose to use taxpayers money to protect the bond holders of the banks. The correct approach should have been to tell them to f**k off and let the bondholders take the hit, THEN bail out the banks with taxpayers money. Instead the taxpayer is now carrying the bulk of the risk and very little of the profit.

      Now we see Anglo trying to spend another 700m of taxpayer’s money propping up Quinn, nice to see the old-cute-hoor network is still thriving in Ireland.

      On October 24, 2008, the Irish independent reported that eugene sheehy of AIB, ruled out going cap in hand to raise cash from shareholders or asking for State investment, “We’d rather die than raise equity,” he announced to about 450 well-heeled private clients of Goodbody Stockbrokers. Well you’ve got your equity from the taxpayer sheehy……………

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