Mortgage woes for thousands as Start and County Councils hike interest rates

Thousands of people whose mortgages are managed by Start are being hit by huge rate hikes, while local authorities are also raising interest rates on the home loans they make.

tart Mortgages manages an estimated 11,000 mortgages on behalf of Vulture Funds.

Some mortgage holders were told last month that variable rates would rise from 3.9 percent to 5.1 percent from next month.

It is understood that a further increase will be communicated to launch customers from January.

Seen in a letter from the start Irish IndependentShe justified the latest increase with “changes in the financing costs for your loan”.

Start didn’t answer when asked why customer interest rates rose when the vulture funds that bought the mortgages that provided Start services funded them with financing as low as 1 percent with terms of up to 35 years, according to the publicly available prospectuses for these transactions.

Mortgage holders are being denied the option to commit to fixed interest rates because Start doesn’t offer fixed interest rates.

Mortgage holders cannot switch providers as many of them have missed payments in the past.

And Start didn’t respond to a question about whether it’s fair to meet people with huge variable rate hikes when some of them have recently gotten out of alternative repayment arrangements because they’ve struggled to pay back the full amount due.

Start’s last owner, US-based Lone Star, did not respond to the same questions.

Mortgage holders whose loans are serviced by Pepper on behalf of vulture funds they bought after the financial crash have been told their interest rates are set to rise to as much as 6.5 percent.

Consumer advocate Brendan Burgess said people whose loans have been sold by the main banks are now “mortgage prisoners” because they cannot set lower interest rates.

He said the central bank encouraged banks to sell bad loans.

Mortgage holders have been reassured by the Central Bank and Treasury Secretary Paschal Donohoe that their rights will not be affected.

But Mr Burgess said those mortgage holders were now finding, at their expense, that they were being denied the right to a fixed rate, which tended to be cheaper than a floating rate.

Thousands of distressed and distressed mortgages have been sold to funds in recent years.

They are served by companies like Pepper, Start, Lapithus, Cabot, Link Group and Mars Capital.

These mortgages are often held by separate mutual funds. For example, Goldman Sachs is the ultimate owner of some mortgages serviced by Pepper.

Meanwhile, interest rates on county government mortgages are set to increase by 0.5 percentage points.

Municipalities do not rely on the European Central Bank (ECB), but finance themselves through loans from the state housing finance agency.

Interest rates on municipal loans will rise from 2.30 percent to 2.80 percent starting next month.

A statement from Dublin City Council read: “On 28 October 2022 all local authorities were informed by the Department for Housing, Local Government and Heritage that local authorities were introducing a variable rate increase from the 1st loan.

“The variable interest rate will increase from 2.30 percent to 2.80 percent,” it said.

https://www.independent.ie/business/personal-finance/property-mortgages/mortgage-misery-for-thousands-as-start-and-county-councils-hike-interest-rates-42175036.html Mortgage woes for thousands as Start and County Councils hike interest rates

Fry Electronics Team

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