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Thread: How big are the Banks' losses on Tracker Mortgages?

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    Default How big are the Banks' losses on Tracker Mortgages?

    How big are the Banks' losses on Tracker Mortgages?

    There are probably 300,000 tracker mortgages on the Irish Banks Balance sheets. Some of these are generating as little as 0.65% on top of the ECB rate.

    If the average tracker was 200,000+ the total sum for trackers is probably of the order of 60billion. the banks borrowed short term and bet long term that they could make money lending at as little as 0.65% above the ECB rate.



    If the banks were making a gross loss of 0.5% on these loans the ball park loss would be 300 million. Could the losses of the banks on these loans reach a billion a year or more?

    Under the current capital reserve rations 60 billion of lending requires 4.8 billion of the banks' capital. So a lot of bank capital is tied up making a loss.

    Even if the borrowers pay every cent back that they are required to these loans are set to be loss makers for much of the next decade.

    I don't know what the losses are for the banks on these loans but they may turn out to be even greater loss makers than they are at the moment.

    There is little prospect of more competition in the lending market until the property crash is completed.

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    Politics.ie Member HarshBuzz's Avatar
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    next decade?

    try 'next three decades'

    anyone who has a tracker mortgage should cherish it

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    Quote Originally Posted by HarshBuzz View Post
    next decade?

    try 'next three decades'

    anyone who has a tracker mortgage should cherish it
    +1.1% for me but many here seem to be on a better rate. It is fantastic, mortgage is "F" all - happy days!

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    Quote Originally Posted by toughbutfair View Post
    +1.1% for me but many here seem to be on a better rate. It is fantastic, mortgage is "F" all - happy days!
    Yeah i worked out that the drop in the value of my house will be offset if rates remain at 2% or under for the next ten years. Can't complain about that. We've already had almost two years.

    * Calculated against 4.25% ECB in 2008 (current value)

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    It's been interesting to see the small beginnings of a media campaign to force those on a tracker to pay more. You can see it in the relatively subtle language describing those on variable rates as "subsidising" those on trackers.

    Now that the chances of a taxpayer bailout are subsiding, the tigerettes who overpaid for property and took no notice of the mortgage conditions are casting around for someone else to pay their mortgage.

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    Default The Trackers are safe even if the Banks & State fail

    Quote Originally Posted by hmmm View Post
    It's been interesting to see the small beginnings of a media campaign to force those on a tracker to pay more. You can see it in the relatively subtle language describing those on variable rates as "subsidising" those on trackers.

    Now that the chances of a taxpayer bailout are subsiding, the tigerettes who overpaid for property and took no notice of the mortgage conditions are casting around for someone else to pay their mortgage.

    The Trackers are safe even if the Banks & State fail

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    Any alteration to the mortgage outside of an ECB increase in rates will surely be a breach of contract, I'm sure anyone on the tracker is able to spend the savings elsewhere, I think there is a greater benefit to the economy that way. Let the banks twist, they are signatories to the contracts same as the mortgagee (think I have my terms correct??).

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    every house will be valued by the state in advance of a property tax.

    Whats the betting that banks will latch on to you house valuation, tell you that you now breach the loan to value criteria for your tracker and make you switch to a variable

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    i have a +1 mortgage. i have it because i predicted what was happening and switched when i could......i took the time to study this area and acted when the time was right.........

    thats what i did, others bought celtic shares, backed horses and learned the complexities of the offside rule.........

    we all make choices, some right , some wrong....

    those of us who have our priorities right should never feel guilty.........

    and i'm waiting for the call from the bank wishing to 'buy back' my tracker!

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    Quote Originally Posted by drjimryan2 View Post
    and i'm waiting for the call from the bank wishing to 'buy back' my tracker!
    Then I presume you are saving up to pay the consequent capital gains tax liability so?

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