Irish Mortgage Corporation

First time buyers being enticed to buy

Permanent TSB introduces discounted mortgage rate to attract first time buyers.

The new variable rate of 3.69% represents a change of direction for the bank which has been largely absent from new mortgage lending for the last number of years. The reduced rate is available where the amount of the mortgage is less than 80% of the value of the property (this is referred to as the loan-to-value).

Where the loan-to-value is greater than 80%, borrowers will still have to pay 5.19%. Traditionally, a majority of first time buyer mortgages are done where the loan-to-value is 80% or greater. 

Todays new mortgage rate is the first significant announcement by the lender in almost four years. However, it remains to be seen how many first time buyers can come up with 20% deposits to qualify for the rate.

Permanent TSB, a leader in residential mortgage lending during the property boom largely exited the mortgage market at the onset of the 2008 credit crunch.
 
In addition to Permanent TSB, Bank of Ireland also announced recently that it had put together a new €1.5bn mortgage fund to support customers who were buying for the first home.

First time buyers will also benefit from the announcement that mortgage interest relief was being extended to those who purchase during 2012. This means that a couple who buy before the end of this year will get up to €5,000 over the year in mortgage tax relief.

Mortgage rate gap significant as lenders look to profits

The margin of difference between what banks charge their standard variable rate customers continues to be significant.

Earlier this month, the European Central Bank cut it's base rate of lending by 25 basis points (quarter percent) to 1%. Despite the cut, a  number of banks did not pass along the rate reduction to standard variable rate customers.

"AIB was one of those banks that did not pass along the latest rate cut to customers. However, despite this, the bank comes out tops on the standard variable rate league." said Mr. Frank Conway of MoneyCoach.ie

Since 2009, several mortgage lenders had increased the rates they charge their standard variable rate customers well before the ECB began increasing rates earlier this year (only to reduce them in the November / December rate cuts).

"While it is important that banks get back to a stable financial footing, it is also important that they do not risk of the repayment capacity of individual mortgage customers who hold standard variable rate loans." said Mr. Conway.

 

 

Tracker mortgage holders urged to use caution assessing bank buy-down offers

Tracker mortgage holders are urged to assess any potential offers from their bank on possible mortgage buy-down schemes carefully.

“This is definitely a case of what is good for the bank may not be good for the mortgage holders” said Mr. Frank Conway, Director with MoneyCoach.ie.
Read more: Tracker mortgage holders urged to use caution assessing bank buy-down offers

Decision time for first time buyers as mortgage relief set to end sooner than expected

Decision time for first time buyers as Mortgage Interest Relief set to be abolished sooner than expected.

Mortgage Interest Relief for first time buyers is now set to be abolished sooner than expected under the Programme for Government.

Mortgage interest relief is a special scheme in which mortgage holders receive back a proportion of the interest they pay on their mortgages.

Currently, a qualifying first time buyer has up to the end of the year to complete the purchase of their new home and begin paying their mortgage in order to qualify for the generous relief, which is available for up to 7 years after buying.

Read more: Decision time for first time buyers as mortgage relief set to end sooner than expected

ECB works in cycles, rate rise cycle expected to begin in April

Hopes that the European Central Bank may delay increasing interest rates as soon as April were dashed as officials indicated the economic uncertainty caused by Japan’s earthquake may not deter them from raising interest rates next month.

Read more: ECB works in cycles, rate rise cycle expected to begin in April

To Fix Or Not To Fix? Irish Examiner Article July 09

While the issue of exorbitant ‘break out’ fees charged by banks grabbed the headlines recently, the burning question for most homeowners is whether to stay variable or opt for a fixed-rate mortgage, writes Frank Conway

Read more: To Fix Or Not To Fix? Irish Examiner Article July 09

Personal budgeting is more important than ever

In the heady days of borrowing, equity release, debt consolidation and top up loans, few homeowners really had the need to concern themselves with budgeting for the household finances. Incomes were rising, borrowing costs were reasonably low and banks seemed as if they could not give away enough money. So who could blame borrowers for putting things like budgeting at the bottom of their list of priorities.

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Debt forgiveness for consumers has a role to play in national recovery.

Debt seems to have replaced property prices as a topic of conversation for many. How to handle debt has immediate and significant consequences as more and more people continue to be made redundant or companies reduce incomes (as overtime, bonus, commission or even basic wage reductions). All this coupled with increasing Government levies on incomes and pension contributions; household budgets are being squeezed to levels never seen before.

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Mortgage holders use lower repayments for savings, paying off debt, charity and summer holidays!

This survey was undertaken during the months of April & May 2009 to existing mortgage holders. Its purpose was to examine how mortgage holders, who have benefited from reductions to their monthly mortgage repayments, have managed those savings.

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