Bank Staff Given 100pc Mortgages at Discount Rates

Article excerpt

Byline: Ferghal Blaney Consumer Affairs Correspondent

BANK staff are enjoying perks including the option of 100 per cent mortgages at low rates, the Irish Daily Mail has discovered.

Consumer groups and opposition politicians told of their outrage last night after learning that the culture of entitlement still prevails among lenders.

They called on the financial regulator to investigate.

Staff at Ulster Bank are given 100 per cent mortgages while prospective home buyers struggle to obtain a home loan, interest rates rise and 30,000 borrowers are behind with monthly repayments.

A bank spokesman confirmed that the preferential deals are available to staff only, as part of their contracts, and are not available to the general public.

Industry sources said staff can also expect a discount of up to half a per cent less than the best rate available to customers.

The spokesman said: '100 per cent mortgages are offered to all staff as part of its benefit package but they are not available to the general public.'

The Ulster Bank group was the first to introduce the 100 per cent mortgage, which has been blamed for the boom and collapse of the housing market. Instead of saving a deposit for a home, buyers were able to borrow the whole amount, thereby encouraging recklessness in the housing market. House prices rose because home buyers were able to borrow the whole asking price but when the economy collapsed they were unable to continue with such high repayments and were left with houses worth less than the value of the loan.

Fine Gael housing spokesman Terence Flanagan said the staff deal was typical of the banking culture.

'It really is disappointing to discover that Ulster Bank is still offering 100 per cent mortgages and it's all the more galling to learn that it's only staff that can avail of them.

' It just goes to show the level of arrogance that still exists in the Irish banking sector and that they've obviously learned no lessons from the recent crash,' he said.

'I would call on the regulator to be called into Ulster Bank to investigate this arrangement. It's obviously preferential and discriminatory towards their regular customers.

'There can't be one rule for one set of people and another rule for everyone else, it's definitely wrong. I think 100 per cent mortgages should be banned for everyone,' he said.

Mr Flanagan also called for a review of pay packages paid to bank workers.

'One way or another we the taxpayers are all paying for the mistakes of the banks. And in light of this remuneration packages must be looked at across all the banks, especially in these straitened times. …