Second time in three months, the cnuts.
http://www.irishtimes.com/newspaper/breaking/2012/1003/breaking2.html
Tens of thousands of AIB customers will see their monthly mortgage repayments increase after the bank raises its standard variable mortgage rates by a half-point next month, the second increase in just over two months.
The bank has said it will raise the interest rates by 0.5 per cent from November 13th. This will affect about 70,000 or one in five mortgage customers of the lender, which is almost fully State-owned after a €21 billion Government bailout.
The announcement comes two days after the bank repaid a €1 billion unsecured, unguaranteed senior bond in full.
AIB said it was increasing the standard variable rate on home loans to 4 per cent as it needed to return the bank to sustainability and due to the fact that its mortgage books were loss-making.
A half-point increase means an additional €30 in monthly repayments on every €100,000 borrowed or an increase of €90 a month or €1,080 a year on a mortgage of €300,000.
The new standard variable rate will be the lowest in the market, where the average rate is about 4.4 per cent, the bank said.
Customers on tracker or fixed-rate mortgages at AIB, or holders of standard variable rate mortgages at the bank’s subsidiary, EBS, will see no increase in their monthly repayments.
AIB, which has the most mortgages of any lender in the country, said the cost of raising funding for the bank was “largely decoupled” from the European Central Bank rate which is used to price mortgages. “We are acutely aware of the financial impact that any increase will have on our customers. But this decision is essential in order to return AIB to a sustainable operating model and is part of a transformation of the bank’s operating base,” said chief executive David Duffy.
“AIB does not have an option to continue to provide mortgages on a loss-making basis at pricing materially below our market competitors, as is currently the case.
“To do so would only see further erosion of capital provided to the bank by the State.”
There is also bad news for landlords who bank with AIB; the standard variable rate on buy-to-let mortgages will also increase next month by a half-point, from 4.45 per cent to 4.95 per cent.
“While the Government is flying kites in relation to taking money from people, here is one of the State-owned assets increasing rates again,” said David Hall, who advises people who cannot repay mortgages.
“This is only going to add significant pressure onto people who are already under severe stress.”
The ECB is expected to maintain its base rate at a record low of 0.75 per cent when it meets tomorrow, which will mean tracker rate mortgage repayments will remain unchanged.
Go fuck yourself David Duffy
http://www.irishtimes.com/newspaper/breaking/2012/1003/breaking2.html
Tens of thousands of AIB customers will see their monthly mortgage repayments increase after the bank raises its standard variable mortgage rates by a half-point next month, the second increase in just over two months.
The bank has said it will raise the interest rates by 0.5 per cent from November 13th. This will affect about 70,000 or one in five mortgage customers of the lender, which is almost fully State-owned after a €21 billion Government bailout.
The announcement comes two days after the bank repaid a €1 billion unsecured, unguaranteed senior bond in full.
AIB said it was increasing the standard variable rate on home loans to 4 per cent as it needed to return the bank to sustainability and due to the fact that its mortgage books were loss-making.
A half-point increase means an additional €30 in monthly repayments on every €100,000 borrowed or an increase of €90 a month or €1,080 a year on a mortgage of €300,000.
The new standard variable rate will be the lowest in the market, where the average rate is about 4.4 per cent, the bank said.
Customers on tracker or fixed-rate mortgages at AIB, or holders of standard variable rate mortgages at the bank’s subsidiary, EBS, will see no increase in their monthly repayments.
AIB, which has the most mortgages of any lender in the country, said the cost of raising funding for the bank was “largely decoupled” from the European Central Bank rate which is used to price mortgages. “We are acutely aware of the financial impact that any increase will have on our customers. But this decision is essential in order to return AIB to a sustainable operating model and is part of a transformation of the bank’s operating base,” said chief executive David Duffy.
“AIB does not have an option to continue to provide mortgages on a loss-making basis at pricing materially below our market competitors, as is currently the case.
“To do so would only see further erosion of capital provided to the bank by the State.”
There is also bad news for landlords who bank with AIB; the standard variable rate on buy-to-let mortgages will also increase next month by a half-point, from 4.45 per cent to 4.95 per cent.
“While the Government is flying kites in relation to taking money from people, here is one of the State-owned assets increasing rates again,” said David Hall, who advises people who cannot repay mortgages.
“This is only going to add significant pressure onto people who are already under severe stress.”
The ECB is expected to maintain its base rate at a record low of 0.75 per cent when it meets tomorrow, which will mean tracker rate mortgage repayments will remain unchanged.
Go fuck yourself David Duffy
