Thursday 22 March 2018

EBS accused over 'unfair' policy on interest rates

Charlie Weston Personal Finance Editor

BUILDING society EBS has been accused of treating members unfairly after it emerged that it is offering different interest rates to each customer who wants to fix their mortgage.

The society last night admitted that each application from existing customers who want to lock in to a fixed rate was assessed on a case-by-case basis.

EBS does not publish a list of fixed rates for existing customers.

It also admitted that it was charging on average 1pc more to existing customers who want to fix their mortgage than to a brand new customer.

EBS, which has a 10pc share of the mortgage market, is to put up its standard-variable rates by 0.6pc on May 1.

And the Irish Independent has learned that EBS is now to raise its fixed rates for new customers by 0.3pc on Wednesday. Rates for new customers at its broker-focused Haven operation are also set to rise in the coming days.

The head of member business at EBS, Dara Deering, yesterday admitted that an existing customer of the society who wanted to fix for three years would be offered a rate of between 4.5pc and 4.75pc, with someone who wanted to fix over five years being offered between 5pc and 5.3pc.

However, a customer who comes to the EBS for the first time can currently secure a rate for five years of just 3.49pc -- up to 1.25pc lower than the rate for existing customers.


Ms Deering said the fixed rate offered to an existing homeowner was reset every day and depended on the money-market rates for funds, the amount borrowed and the loan to value.

The society denied that the rate an existing customer could secure was down to their abilities to bargain.

It said: "Existing members who want to fix the rate on their mortgage account can contact EBS directly and we will discuss their options with them.

"EBS does not have a set of fixed rates for existing business as we take each member's total relationship with the society and their individual situation into consideration to determine a fixed-rate offer."

The statement added that fixed-rate offers for new and existing business were also reviewed regularly and adjusted to ensure that the society was operating in a sustainable manner while offering value to its members.

However, Frank Conway of Irish Mortgage Corporation accused EBS of treating its members unfairly by not having a published list of fixed rates.

But Ms Deering denied that the society was being unfair and said it was seeking to make sure members got the best value fixed rate EBS could offer.

Most lenders offer better rates to new customers in a bid to building up their loan books, she insisted.

See also Your Money pages 34, 35, 38, 39.

Irish Independent

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