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‘Disgraceful behaviour’ – Anger as huge rate rise by Finance Ireland means buying plans are scuppered for many

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Finance Ireland told brokers that if potential borrowers did not have a funds request in by last Friday they would not get the lower rates. Photo: PA

Finance Ireland told brokers that if potential borrowers did not have a funds request in by last Friday they would not get the lower rates. Photo: PA

Finance Ireland told brokers that if potential borrowers did not have a funds request in by last Friday they would not get the lower rates. Photo: PA

Plans by number of people to buy homes are set to collapse after Finance Ireland announced an enormous rate rise with immediate effect.

People hoping to close contracts to buy homes have told how they have been forced to pull out of the deals after the failure of Finance Ireland to give sufficient notice that its mortgages would become so expensive.

Buyers who might have been able to afford a five-year fixed rate of 3.75pc are unable to afford repayments now that this rate is 4.75pc, collapsing hundreds of house-buying deals.

Switchers and new buyers in the process of getting a new mortgage were given no notice of the rate rises announced on Monday, which are so high these people can’t afford to the mortgages.

Leaders often give those in the process of drawing down a mortgage four weeks to get documents submitted before higher interest rates kick in. Finance Ireland told brokers that if potential borrowers did not have a funds request in by last Friday they would not get the lower rates.

One person about to close a house-buying deal said: “I have a loan offer from Finance Ireland. I am buying a new house. We are hoping to close in the coming weeks. Our solicitor sent the funds request on Monday. They will not honour the loan offer. I now have two weeks to get approval from another lender. Disgraceful behaviour from an institution that is supposedly regulated.”

Mark Coan of mortgage switcher service MoneySherpa.ie said the rate hikes of between 1.5 percentage points and 2 percentage points by Finance Ireland was not unexpected.

“But the speed that they have pulled down the shutters on customers currently trying to switch or buy is very harsh.”

He said only those whose solicitors have the request for cheque by the end of last week will avoid the hikes. Mr Coan said Finance Ireland is currently taking at least 33 days for credit decisions and 20 days for a valuation. “So thousands of customers are likely to miss out, because of Finance Ireland's self-inflicted delays.”

“There is no excuse in my book for treating customers like this. They knew the rates would be going up due to the ECB decisions weeks ago and could have given a grace period, but chose not to,” he said.

Finance Ireland was asked why it had given so little notice to those on the point of mortgage drawdown.

It said that following discussions with brokers, it is now giving people a one-week extension to draw down funds at existing the lower rates.

But their solicitors still has to have submitted a request for funds by last Friday.

“While we regret the impact of this short notice period for customers, these rate increases are unfortunately necessary given the significant increase in funding costs in recent weeks,” Finance Ireland said.

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The Central Bank was asked for a comment on Monday but failed to respond.


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