Oh.

Public Banking Alliance write:

We pay over €170k (>60%) on top of the principle to the commercial banks for a mortgage on an ‘average’ price house. Compare that to €49k in Germany.

Germany has 70% Community/Public Banking.  The Commercial Banks in Germany have only 12.5% of the market…

Kevin Byrne writes:

Irish banks charge customers the highest interest rates in Europe. ECB figures show that Irish banks are up to three times more profitable than Eurozone counterparts.

Average interest rate here is 3.2% compared to eurozone average of 1.9%. Businesses charged 5.1% compared to 2.3% Even after paying 42% of Europes banking crisis.

Good times.

Public Banking Alliance

25 thoughts on “Actual Cost

  1. Rob_G

    How proportion of the Irish banking system is publicly-owned – not 70%, sure, but a significant proportion of it.

    Our interest rates are higher than Germany’s due to the greater risk of lending, given how it can take 5-7 years to evict someone who isn’t paying their mortgage; I don’t think it is anything to do with public vs private ownership of banks

      1. Rob_G

        When people aren’t paying their mortgages, what do you think is going to happen – the banks will say “gee, shucks”, and take the hit themselves? Or they pass it on to the people who are paying their mortgages?

        The banks will get their money, one way or the other; its the rest of its customers who end up carrying the can.

        1. millie st murderlark

          Fair enough. That makes sense.

          I realise in hindsight that my comment came across as combative, which wasn’t my intention. So apologies for that, and thanks for the helpful reply Rob.

          1. Rob_G

            No problem; no harm in a bit of combativity now and again, so as people can be civil at the same time, that’s what I always say :)

      1. Rob_G

        Long report; could you tell me which table you are referring to, please?

        Depends on the number of households that in arrears relative to population also, and the length of time it takes to evict someone. If in Germany, they were evicted within a year/18 months, that would represent a lot less risk to a bank than Ireland, where sometimes it takes up to 7 years, with no payments being made on the mortgage during that time.

      2. Cian

        Germany have a lower home ownership rate – somewhere just above 50%, compared to 65% here.

        [1] I think these are about right.

  2. Tom

    Hold on. The same people moaning about interest rates are those moaning about evictions and vulture funds. This is the banking environment you asked for. Everyone safely in their forever homes except those without a mortgage or council house.

  3. Bruce_Wee

    It is a farce the commercial rate for Mortgages in Ireland. currently embroiled in the “Tracker Scandal” at the moment….Good Times

  4. Conski

    Welcome to economics.
    You cant quite blame a sitting taoiseach for banking. More than a little ingenuous. Though opening up Irish mortgage to European banks would be an interesting prospect. Possibly amazing, followed by shaking fists at sky. Repeat ad infinitum

    1. Ronan

      Most any bank is free to come from Germany, France, or anywhere else in the EU and lend. They don’t, because they realise that mortgage lending here is in effect non-recourse.

      We pay for loss making loans. There are a lot

  5. phil

    They are not comparing like with like , Germany is a functioning federal republic , Ireland is a feudal republic, with endemic corruption …

  6. Joe

    Leo is a right Banker all right! he did say its a “Republic of Opportunity” …….to keep the golden circle elite piggies up to their neck in mullah by fleecing vin-ordinaire tax payers.

    Leo the ? Hmm! ? The spoofing fibber said “Any bank coming to us looking for more money is going to have to show how they are going to impose losses on their junior bondholders, on their senior bondholders, and on other creditors before they come looking to us for any more money. Not another cent.”
    “https://www.irishexaminer.com/ireland/not-a-cent-more-for-the-banks-vows-fg-144826.html”

    Time to end the farce with an election now get out an protest on Saturday 1 of December https://www.facebook.com/NationalHomelessandHousingCoalition/photos/a.1660094537560924/2229350583968647/

  7. andy

    These clowns complain about not getting their “public bank funding”.
    These are the same guys who complain about farms & homes being repossessed for non-payment.
    They’re your typical conspiracy theorists.
    Just look at their twitter history – anti-fluoride propaganda, anti-abortion stuff, Russia Today retweets, the military industrial complex, Gemma O’D and her anti-migrant stuff.

    Who the hell is going to fund an “Irish Sparkassen” at sub 1.1%?
    And of all things, who would fund these guys?

  8. f_lawless

    I found this a really thought provoking article on how debt practices have shaped civilisation through the ages . Sooner or later, what we need is a debt jubilee for the greater good of society!
    https://www.nakedcapitalism.com/2018/11/145003.html

    Couple of quotes:
    “The true roots of Western Civilization lie not in the Greek poleis that lacked royal oversight to cancel debts, but in the Bronze Age Mesopotamian societies that understood how life, liberty and land would be cyclically restored to debtors again and again. But, in the eighth century B.C., along with the alphabet coming from the Near East to the Greeks, so came the concept of calculating interest on loans. This concept of exponentially-increasing interest was adopted by the Greeks — and subsequently by the Romans — without the balancing concept of Clean Slate amnesty.”

    It contends that the true reason that Jesus was crucified was because he called for universal debt forgiveness for the poor: “For centuries English-speakers have recited the Lord’s Prayer with the assumption that they were merely asking for the forgiveness of their trespasses, their theological sins: “… and forgive us our trespasses, as we forgive those who trespass against us….” is the translation presented in the Revised Standard Version of the Bible. What is lost in translation is the fact that Jesus came “to preach the gospel to the poor … to preach the acceptable Year of the Lord”: He came, that is, to proclaim a Jubilee Year, a restoration of deror for debtors: He came to institute a Clean Slate Amnesty (which is what Hebrew דְּרוֹר connotes in this context).

    So consider the passage from the Lord’s Prayer literally: … καὶ ἄφες ἡμῖν τὰ ὀφειλήματα ἡμῶν: “… and send away (ἄφες) for us our debts (ὀφειλήματα).” The Latin translation is not only grammatically identical to the Greek, but also shows the Greek word ὀφειλήματα revealingly translated as debita: … et dimitte nobis debita nostra: “… and discharge (dimitte) for us our debts (debita).” There was consequently, on the part of the creditor class, a most pressing and practical reason to have Jesus put to death: He was demanding that they restore the property they had rapaciously taken from their debtors. And after His death there was likewise a most pressing and practical reason to have His Jubilee proclamation of a Clean Slate Amnesty made toothless, that is to say, made merely theological: So the rich could continue to oppress the poor, forever and ever. Amen.”

    1. Rob_G

      Before the widespread availability of consumer credit, very few, other than the very wealthy, owned their own house. Banks are willing to lend large sums of money to facilitate people buying their own houses as they know that if the person does not pay them back, they have avenues of redress.

      Now, we know from recent history that this system isn’t always an unqualified success, but if authorities permitted debts to be arbitrarily cancelled from time to time, no banks would lend to anyone, and almost everyone would be stuck renting from a tiny wealthy landowning class for their entire lives.

  9. Cian

    A few comments on their numbers:
    1. they are using 2017 data – interest rates here have dropped in the last 12 months.
    2. they are using 90% LTV rates. But in Germany: “Another limiting factor that needs mentioning is the typical LTV ratio of 67% and a maximum LTV ratio of 80% for most borrowers.”
    3. They are comparing 5-year Vs 10-year
    4. (as mentioned by others) The Germans have high penalties for non-payment, and a swift eviction process.

    But it would be interesting to see if something similar could be introduced here.

    https://www.hypsotech.nl/wp-content/uploads/2013/08/study-hypsotech.pdf

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