Question
My mortgage is with PTSB and is coming to the end of a five-year fixed rate in the summer.
I am very concerned about the potential take over by another bank and worry that rates will increase, in the same way a family member was affected by Pepper after their mortgage was sold by Ulster Bank, and they hiked the rate.
Should I switch now, or do you think I need to see what happens?
Home Economics: ‘My insurer has refused to cover me because I was flooded last year. Can they do this?’
Answer
I think you’re confusing two different things.
Pepper is a servicing firm, which was engaged to manage a portfolio of non-performing mortgages from Ulster Bank in 2019, as it was leaving Ireland.
The buyer of the loans was an equity firm called CarVal. It was Pepper’s job to bundle these loans and manage the repayments, most of which had fallen into arrears.
By their very nature, such loans are riskier, and therefore it is not unreasonable for firms to charge more to lend on them.
That is entirely different from what is happening here with PTSB.
That bank, which has remained in majority state ownership since the property crash should, in all honestly, have been sold a long time ago.
Some commentators even suggest it should have been subsumed into the two ‘pillar’ banks from the start.
Anyhow, it has now been sold to an Austrian bank called Bawag.
Bawag already has a presence in Ireland, selling broker-led mortgages through its MoCo brand.
It is a solid, big bank, with €72 billion in assets, and operates in a number of countries. This will be a very good outcome for PTSB customers, in my view.
Indeed, in order to solidify its presence, it may offer very competitive rates when the paperwork is completed. It will be keen to see switchers from other banks and claim a footing in the new business market.
Home Economics: ‘We retired our B&B and now let it out for short-term lets, but face the same insurance and water charge bill. What can we do?’
I would definitely sit back if I were you. You’ll be offered a series of terms and rates when your fixed period is up (and the takeover is unlikely to be completed by then), so select the most attractive one and see what happens.
Sinéad presents ‘The Home Show’ on Newstalk FM at 5pm on Saturdays, and also on podcast.