Blog – David McCarthy – Galway Talks, 15/08/2013

galway-bayfmQuestion:   I’m frustrated at the moment as I see an enormous drop in the Deposit rates that I’m getting with the bank.  Can you please advise me what I should do?

Answer:  The outlook unfortunately with Deposit rates is for them to fall even further.  So if you are waiting for a turnaround in rates then you are likely to be very disappointed for the next number of years. Depending on what appetite you have for risk, there are a variety of investment bonds to suit your circumstances ranging from periods of 3-5 years.  This is a far more prudent and efficient way of utilizing deposit monies.

Issue:  Recent press reports suggest home lenders are sending threatening repossession letters, to borrowers who are in arrears, but in positive equity.

Comment:  This issue relates to people who have positive equity in their homes but are in arrears with their mortgage.  It would appear that the attitude of some lenders, who are sending these letters, is that if you do not bring matters up to date that they will take legal action against you.  Obviously, they are targeting what I would describe as ‘the lowest fruit on the tree’ as in these cases the lender will not have to take any write off in relation to the mortgage.  I would strongly advise people who have received this type of correspondence to appeal, through the bank’s internal process, and see how that progresses before looking at matters further.

Issue:  Possible further drop in ECB rate from 0.5% could occur in the autumn.

Comment:  Whilst we do not know at this point in time if a further drop will occur, there has been considerable speculation that the autumn could see a fall of 0.25% in the ECB rate.  This would obviously be good news for borrowers but unfortunately, once again, bad news for depositors.