S&P: 11% of mortgages in arrears

MORTGAGE arrears at Ulster Bank and First Active have soared to over 11%, according to rating agency Standard & Poor’s.

The agency said that since their last review of Celtic 14, a residential mortgage-backed securities transaction that closed in November 2008, securitising loans originated by First Active and Ulster Bank Ireland, the level of loans more than 90 days in arrears has risen to 11.33% in May 2011, from 7.7% in August 2010.

Meanwhile, AIB is not imposing the latest ECBinterest rate hike on standard variable loans at the moment but tracker mortgages will increase today.

The 0.25% increase in interest rates announced earlier this month will result in the monthly repayments on tracker loans increasing by €15 for every €100,000 borrowed.

The bank is also increasing its deposit rates. It said that the rates on standard variable rate and loan to value variable rate mortgages remain “under review”.

AIB’s Online Personal Savings Plan rate and the Five-Year Special Term Account rate are increasing by 0.5% AER. The Access Deposit 30 Account rate increases by 0.35% AER for amounts between €250,000 and €500,000 and by 0.5% AER for amounts between €500,000 and €2 million.

Loan and overdraft rates for personal customers and ‘AA’ overdraft rates for business customers increase by 0.25% but the ‘AA’ loan rate for businesses will remain unchanged.

AIB also announced that it is following Bank of Ireland’s lead by issuing over one million Visa Debit cards to customers which will allow them to swipe and pay for smaller purchases.

This card will replace the Laser/Maestro card.

The card will allow shoppers make purchases of €15 or less in under a second by holding their card over a terminal without entering a PIN number.

AIB said they charge 20 cent per debit card transaction, however, if a customer is on a free banking deal there will be no charges. It also said that customers will not have to pay the Government’s credit card stamp duty charge on the new card.

AIB said the decision to partner with Visa Europe will ensure AIB customers can access “future innovations in payment systems as they become available”.

It said no action is required by AIB debit card customers and existing debit cards will continue to operate as normal up until the time that their new Visa Debit Card is issued to them. The bank will begin issuing the cards around the middle of next year.


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