EBS BUILDING Society is withdrawing all offers of fixed-rate mortgage packages for new and existing customers in a move that will significantly reduce the options for mortgage holders anxious to lessen the impact of the latest round of variable interest rate hikes.
Last week the society announced plans to increase its standard variable rate (SVR) mortgage by 0.6 per cent from 3.83 per cent to 4.43 per cent from April 1st, an increase which will add more than €100 a month to repayments on a mortgage of €300,000. EBS said the increase was unavoidable and blamed the cost of its borrowing from retail, corporate and wholesale markets.
In an internal memo issued yesterday, the society said it was “temporarily” withdrawing from the fixed-rate market, saying it had carried out a review of the potential rate positions and found “fixed rates will not offer value to our members at this point in time”. It said the position would be reviewed on an ongoing basis.
All loan offers to new customers will be honoured until the close of business on February 28th next, at which point they will be withdrawn. All mortgages approved after that date will need a signed, amended offer accepting the applicable tiered variable rate.
In relation to existing business, EBS fixed-rate offers will be honoured until close of business tomorrow if date-stamped before then and received in head office before close of business tomorrow.
Haven, a subsidiary of EBS, also announced it was leaving the fixed-rate market yesterday, to the same timetable. “Significant movements on financial markets have resulted in fixed rates which would not deliver value to customers at this time,” the company said, adding its position would remain under “constant review”.
Last week Permanent TSB introduced immediate increases of between 2 and 3 per cent on its fixed interest rates for existing mortgage holders rolling off fixed or discounted rates, a move which brokers described as “shocking”.
PTSB increased its two-year fixed term rate from 5.25 per cent to 7.25 per cent, while the five-year fixed rate will go from 5.75 per cent to 8.75 per cent. A 10-year fixed rate will increase from 6.1 per cent to 9.1 per cent.
The bank said the increases would be available for “a limited time” only and stressed they were not the long-term rates it plans to roll out in the coming weeks to replace its suite of fixed-rate offerings, suspended two weeks ago. Industry sources say its new fixed rates will, however, be in line with them, so will effectively price the State’s largest mortgage lender out of the fixed-rate market.
While the window of opportunity for people wishing to switch to a fixed rate is closing, financial advisor Frank Conway said last night there was still fixed-rate value on the market with AIB, Bank of Ireland and KBC Home-loans in particular offering comparatively low fixed rates, although restrictions on switching and problems with negative equity would make it impossible for many people to take advantage of what few deals remained.