Bank of Scotland Ireland (BOSI) effectively closed their doors to new mortgage business yesterday. They have hiked their new business rates to a totally uncompetitive level and as such are effectively saying to customers that they do not want your mortgage business.
Their variable rate for new business now stands at 6.06 APR and the 5 Year Fixed is now an incredible 7.12 APR. These rates seem crazy when you compare them to the likes of Bank of Ireland and AIB with variable rates as low as 2.28 APR and 5 Year Fixed as low as 3.92 APR.
A new trend has emerged in the Irish Mortgage Market since the government bailout of banks here and abroad. The banks coming under the Irish Guarantee are open for new mortgage business. There is no question that the Irish Banks have tightened their lending criteria but they still have attractive interest rates for those who qualify. The foreign owned banks have been bailed out in their mother countries and the last thing they want to be seen to be doing is aggressively competing for new mortgage business in another country.
Foreign owned banks like BOSI, First Active and Ulster Bank are not only knocking back new business with high interest rates they are also putting off new customers with restrictive criteria. BOSI for example will now only offer First Time Buyers 80% of their new property purchase price.
The only good news from BOSI is that they have confirmed the rate increases will not affect existing customers, only new business. So they are effectively saying that their doors are closed for new mortgage business.
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