European Central Bank (ECB) Interest Rate increase – FAQs

What is a Tracker Mortgage?

A tracker mortgage is a type of mortgage where the interest rate charged on the loan tracks that of another publicly available rate, typically the interest rate set by the European Central Bank.

 

I have a tracker mortgage with Pepper, what does this rate change mean for my tracker mortgage?

A tracker mortgage “tracks” the ECB interest rate, which means the interest rate on your loan moves in line with the ECB base rate. The ECB Interest rate announcement on 21st July will result in an increase on your mortgage interest rate.

When is the rate change increase announced by the ECB on 21st July 2022 to take effect on my loan account?

Pepper will be writing to all customers impacted shortly to provide them with information on the ECB interest rate increase and what it will mean for them. For more information on the ECB interest rate increase amount please refer to https://www.ecb.europa.eu/

How much will my repayments increase by?

Pepper will be writing to all customers impacted shortly, this interest rate change notification letter will include the effect of the ECB interest rate increase on your monthly loan repayments.

For guidance, please see below table outlining the indicative increase on a per €50,000 borrowed.

Outstanding Balance Monthly NMI Increase*
€50,000.00 €20.55
€150,00.00 €61.64
€250,000.00 €102.74
€300,000.00 €123.29
€350,000.00 €143.84

*Note: These amounts are for indicative purposes only, interest rate change notification letters will issue shortly to all customers impacted with information on the actual new monthly loan repayment amounts.

Do I need to change my direct debit payment for the increased monthly payment? 

No, if you pay your loan by direct debit, the new loan repayment amount will be automatically taken when your loan repayment changes.

I currently make overpayments to my loan by a fixed Direct Debit amount, what do I need to do?

Your existing overpayment will remain unchanged, however, if you wish to make further additional payments or if the increase will be more than the existing overpayment amount, you should contact us on the contact details provided and we will arrange for the overpayment amount to be changed. 

I pay by standing order/ cheque, Bank Transfer, Debit Card what do I need to do?

You will need to make the necessary arrangements to amend your payment amount when you receive the interest rate change notification letter.

Will there be further increases on my loan?

For customers impacted, it is likely that there will be further increases in line with the European Central Bank interest rate review.  However, we will contact impacted customers to notify of any such further interest rate increases following an ECB announcement. 

My loan is repaid in full and I have received a letter notifying me of an interest rate increase.

If you have repaid your loan in full, you should disregard this letter as the ECB interest rate change will not Impact your loan.

Can I fix my interest rate? 

No, Pepper do not offer any new interest rate products - Pepper are presently not providing any residential lending in the Irish market, therefore we are not in a position to offer a change of product.

We encourage you to look at your mortgage options regularly because a different product from another lender may lead to savings for you. The Competition and Consumer Protection Commission’s website (www.ccpc.ie) provides information relating to switching lenders or changing mortgage type.


I have an agreed Alternative Repayment Arrangement with Pepper, how does this rate increase affect the arrangement? 

The terms of any agreed alternative repayment arrangement (ARA) will remain in effect however the interest rate on your loan will increase in line with the ECB rate change.   If you are making reduced payments as part of the ARA your loan repayments will remain the same until the end of the reduced payment period (at which time the new repayment amount will be notified to you at least 30 days before the ARA ends).  If you are not making reduced payments, your loan repayment will change following the interest rate increase.  

I have an agreed Personal Insolvency Arrangement with Pepper, how does this rate increase affect the arrangement? 

If you are currently in a Personal Insolvency Arrangement (PIA), your expected payment as per the agreed arrangement will remain unchanged.  However, this interest rate change will be applied to your loan account and in the event your PIA comes to an end or is terminated, your loan repayment amount will be adjusted accordingly.  We will contact you in advance of the arrangement coming to an end to inform you of any revised loan repayment amount that will come into effect after the PIA ends. 

I have a standard variable/ variable rate mortgage with Pepper, what does this rate change mean for my mortgage.

If any changes are to be made to your standard variable interest rate, Pepper will write to you in advance, providing 30 days’ notice of any interest rate change.  Notifications relating to interest rate changes will detail the reason for the change and the impact of the change on your loan repayments. 

I am currently on a fixed rate which will move to an interest rate tracking ECB at the end of the fixed rate period, what does this rate change mean for me

The rate increase will not impact your loan until the end of your fixed rate period, at which time you will move onto the prevailing ECB interest rate.  You will receive advance notification before your fixed rate is due to expire to advise you of what the new rate will be and the impact of the change on your loan.

I have a Price Promise product, will my rate/payments increase?

Price Promise is a variable rate mortgage, that will never be more than 1.50% over the published ECB interest rate.  

Your interest rate will increase in line with movements to the ECB interest rate.   Pepper will write to you in advance, providing 30 days’ notice of any interest rate change.  Notifications relating to interest rate changes will detail the reason for the change and the impact of the change on your loan repayments.


If you are experiencing financial difficulties

Your financial situation may have changed in recent times, if you are experiencing financial difficulties, please contact our Arrears Support Unit on 0818 818 181.

See further information on supports provided by Pepper for customers experiencing financial difficulties below

https://www.peppergroup.ie/loans/residential-mortgages/repayment-difficulties

 

Contact Pepper:

If you have any further queries in relation to ECB Interest Rate Change, please contact Pepper Customer Support on the contact details provided below (where possible, please quote your mortgage reference number): 

Interest rate queries helpline: 0818 828 828

Pepper Asset Servicing, PO BOX 4310, Shannon, Co. Clare