Foreign banks under fire for squeezing Irish borrowers
Non-Irish owned lenders have been accused of squeezing Irish borrowers Photo: Getty Images
FOREIGN-owned banks have been accused of dumping on customers here after they were found to be charging the highest mortgage rates.
Non-Irish owned lenders have also been accused of being effectively closed for lending business after a survey showed they were the dearest lenders.
The research has emerged as Halifax/Bank of Scotland again increased its variable mortgage rate from 4.55pc to 5.90pc.
The new rate applies to new customers and its own customers coming off fixed rates.
The Scottish bank's new three-year fixed rate has jumped 5.89pc to 7.15pc. This compares with AIB's three-year rate of 3.19pc.
This means that Bank of Scotland's three-year rate is an incredible 4 percentage points higher than that offered by AIB, and more than 7 percentage points higher than the European Central Bank rate.
Other banks that are bottom of the 'best buys' mortgage league include Halifax, Leeds Building Society, Ulster Bank and National Irish Bank, the survey carried out for the Irish Independent by mortgage brokers Karl Deeter has revealed.
Mr Deeter found that the highest variable rate was being charged by Bank of Scotland (Ireland), followed by sister bank Halifax, and then National Irish Bank. Bank of Scotland (Ireland) also has the worst one-year fixed rate.
Bottom
Commenting on the survey results, Mr Deeter said: "Every single lender in the bottom of the league is, without exception, one that has been bailed out by a foreign government (BOS, Ulster, Halifax), or has a foreign-based ownership (NIB, Leeds)."
At the other end of the scale, AIB and Bank of Ireland subsidiary ICS emerged with the most keenly priced mortgages.
"Foreign-owned banks are essentially not lending here. They were saved by the taxpayers where their parent company is based and the last thing they want is to be seen to be lending in other countries," Mr Deeter said.
He accused foreign banks of engaging in "the worst form of opportunism" at a time when the mortgage switcher market was at a standstill.
Non-Irish banks have also altered their loan-to-value criteria. This means borrowers have to come up with a larger deposits.
Yesterday Belgian-owned KBC Homeloans said it would only accept applications from switchers who were borrowing 60pc or less of the value of their home. The only business the non-Irish banks were open for was savings as they bid to strengthen their capital bases.
A spokeswoman for Halifax/Bank of Scotland said: "Pricing for all current customers remains the same -- no increases. The new pricing is applicable to new business only and it reflects current market conditions."
She added that the bank was constantly reviewing new business pricing and would continue to do this going forward.
- Charlie Weston Personal Finance Editor
