Home economics: Sinead Ryan answers your property questions

Sheahan Financial Dublin Galway Cork

We have €163,000 outstanding on a fixed- rate mortgage on our home which we estimate to be worth €380,000. There are two years left on the loan at an interest rate of 4.1pc and the bank is charging us an early redemption fee of €6,000 to get out of the mortgage. The entire term has 18 years left. Would we be better off paying the fee and switching to a much lower fixed rate or sticking it out by which time interest rates will have risen?

A. Your loan to value (LTV) ratio is 43pc, which makes your mortgage an attractive candidate for switching since banks reserve their best rates for LTVs under 60pc. You can definitely do better than your current rate, either with a standard variable or on a new fixed-rate contract.

For example, AIB’s variable is 2.75pc, resulting in repayments of €957.59pm, which is over €100 less than you are paying now. On the fixed side, KBC’s two-year fixed rate of 2.8pc would cost you €961.56 while Bank of Ireland is at 3pc on €977.55.

Obviously you have to take the €6,000 charge into account. Switching now would only save around €1,300 in the first year, and €2,600 over two years and you’d have legal/switching costs also. While you are correct in saying interest rates will be increased by the time your contract comes up for renewal, it’s unlikely to be at a rate which would mitigate against you staying put.

It’s annoying, but my advice would be to stay put until the end of the fixed term and review the entire mortgage at that stage based on prevailing fixed and variable rates.

You could, in the meantime, approach your own bank with the above quotes (you can find them on ccpc.ie) and threaten to switch at the end of the term, unless it agrees to move you to a better rate. It might concentrate the mind.

Q. My husband and I are applying for our first mortgage. We both work hard and have been saving so much over the years, so we are now in a position to approach banks. My husband had been putting this off for some reason but I suspected he was just too busy with work, so I gathered all the paperwork and set everything in motion. To my utter shock the bank has refused the application on the basis that they discovered a loan my husband took out which I wasn’t aware of – it turns out was to pay off a gambling debt which I also wasn’t aware of. What can we do to regroup? He has completely given up gambling, removed his account and this loan is being paid off soon.

A. Joey Sheahan, of Sheahan Financial Planning says ‘financial infidelity’ is unfortunately quite common.

“It’s contentious, and the perils of gambling have been well documented, however, the impact on people’s finances to do with online shopping, hidden bank accounts and apps cannot be over-estimated.

“Being honest and open about your finances when you’re in a relationship is very important, particularly if you are married are entering into a huge financial commitment like taking out a mortgage.

Source: https://www.independent.ie/life/home-garden/home-economics-sinead-ryan-answers-your-property-questions-36894432.html

If you are interested in getting a Mortgage Protection and would like to speak to us at Sheahan Financial  please don’t hesitate to contact us at welcome@mywealthmanagement.ie in Cork +353 21 4277037 or 353 86 8060601

MyWealthManagement Limited trading as Sheahan Financial is
regulated by the Central Bank of Ireland.


 

MyMortgages.ie Dublin Cork

 

Households are finally cottoning on – switching your mortgage can save you €100,000. Brokers MyMortgages.ie report a three-fold increase in switching and forecast double digits growth in the first half of 2018. One reason behind the rush is borrowers want to avail of cash incentives for switching in case they are banned, as Fianna Fail proposes. The brokerage firm cities one couple who had a €390,00  (LTV <80%) mortgage over 28 years at a variable rate of 4%. They switched to a four-year fixed rate of 2.6% and  lowered their repayments by €300 – saving themselves €99,000. You can save €311 per month and €112K over an average €350K mortgage, said Joey Sheahan, of MyMortgages.ie

 

Source: Mail On Sunday  21/01/2018

If you are interested in getting a mortgage and would like to speak to us at MyMortgages.ie please don’t hesitate to contact us at info@mymortgages.ie in Cork +353 21 4277037 or 353 86 8060601

MyMortgages Ltd t/a MyMortgages.ie is regulated by the Central Bank of Ireland


Mortgages gold rush on the cards as ‘cash-back’ deals could be banned

 

Christian McCashin

 

Fears that ‘cash-back’ mortgage offers will be banned this summer is expected to cause a surge of homeowners switching their mortgage.

Fianna Fáil is looking to ban the offers, which give borrowers a return of around 2% of the mortgage back in cash.

This would force the banks to compete on interest rates alone, which is seen as better value in the long term.

 

Fianna Fail’s spokesman for finance Micheal McGrath has proposed an amendment. Pic: Collins

The Variable Rate Mortgages Bill would give the Central Bank the power to limit interest rates on mortgages, although a warning by the Attorney General that it might not be constitutional will be looked at. However, Fianna Fáil finance spokesman Micheal McGrath has proposed an amendment to it banning mortgage cashback deals. The offers, where a bank hands over a percentage of the loan in cash on drawdown, have become increasingly popular and are used by banks to drive up their market share, without having to cut mortgage rates.

Bank of Ireland offers homebuyers and mortgage-switchers 2% back on their mortgage as cash, with another 1% available for the bank’s current-account holders.

The EBS, which is part of the AIB group, offers €2,000 back in cash, and Permanent TSB offers not just 2% cash back on the value of the mortgage, but also 2% of the monthly mortgage repayment back in cash every month.

Ulster Bank offers a flat payment of €1,500 towards legal fees. ‘This amount is fixed and will not change if your legal fees are higher or lower,’ it says.

Struggling homeowners’ campaigner David Hall, of the Irish Mortgage Holders’ Organisation, welcomed the proposal to scrap the cash-back offers. ‘Ultimately you’re paying for it. All of these things cost money, there’s no such thing as a free lunch in banking,’ he said. ‘You might get a couple of quid now but ultimately it’s being added on to the bottom line of variable rates, that’s paying for it.

‘So you’ll never get variable rates lower if you keep having these scams. By scrapping them they’ll compete on the straight-forward rate, there’s no misinterpretation, no sneaky language, very straight forward, you’re just going on straight, raw rates,’ he said.

 

Joey Sheahan, of MyMortgages. ie, believes a number of factors have led to a surge in enquiries in the past few weeks. ‘Currently the mainstream lenders are offering sizeable cash incentives to certain cohorts of the mortgage market to encourage them to move lenders,’ he said. ‘The merits of this are up for debate but Fianna Fáil is putting forward a proposal to ban these cash-back offers.

‘If accepted, the Bill could come into force by the summer, so we are going to see large swathes of people – who might have, up until now, been on the “switching fence” – make moves to avail of these offers before they are taken off the table.’ Brokers forecast the switcher market alone will experience double-digit growth in the first half of the year, as an increasing number of mortgage-holders learn of the option which could potentially save them anywhere in the region of €300 a month or €112,000 interest over the lifetime of a €350,000 mortgage, about a third of the loan’s value.

In the first half of last year 1,319 people switched or re-mortgaged but that is expected to grow to at least 1,500. That figure could go as high as 2,000 during the first six months of this year.

Switching and remortgaging saw the largest increase in transactions, up 44% on 12 months earlier, the most recent figures show, up from 309 in November 2016 to 445 in November last year, an extra 136 mortgages.

Mr Hall said mortgage-holders should take up the cash-back offers while still available but warned: ‘People should ensure that they benefit from it, that there’s nothing hidden, that there’s no disadvantage with the mortgage rate.

‘Also, all brokers should declare what commission they’re getting so the public understand that if you’re switching from Bank of Ireland to AIB and AIB are paying the broker €500 that you’re told that in advance.’

 

Source: https://extra.ie/2018/01/24/news/irish-news/mortgages-gold-rush-cash-back-deals-banned

 

If you are interested in getting a mortgage and would like to speak to us at MyMortgages.ie please don’t hesitate to contact us at info@mymortgages.ie in Cork +353 21 4277037 or 353 86 8060601

MyMortgages Ltd t/a MyMortgages.ie is regulated by the Central Bank of Ireland

 

 

 


 

Experts at MyMortgages.ie have reported a flurry of activity in the mortgage switcher market since the beginning of the year.  The brokers forecast the switcher market alone will experience double digit growth in the first 6 months of the year, as an increasing number of mortgage holders learn of the option which could potentially save them anywhere in he region of €311 per month and €112k over the lifetime(1) of an average €350k mortgage.

Joey Sheahan, head of Credit at MyMortgages.ie,  believes a number of factors have led to the influx in enquires they have experience in the last two weeks.

“We have experienced a three-fold increase in the volume of enquiries received since January 2nd from mortgage holders all over the country wondering if they might be eligible to switch lender and avail of cheaper rates. We put this down to a number of factors.

“As a results of recent media reports, anecdotal evidence suggests that an increasing number of mortgage holders seem to now be aware of the fact that switching lenders to avail of a better rate might be viable option for them.”

“Towards the end of year myself and others in the industry endeavoured to highlight the fact that more mortgage holders can and should switch lender to reduce their monthly payments. It was also revealed that changes in the way lenders operate have meant that many only charge a very small, if any, break out fee from fixed rate mortgage, so what was once a significant monetary hurdle to switching is now obsolete in many cases.

“1,319 people switched or re-mortgaged in the first half of 2017 and we expect this number to grow to at least 1,500 but could go as high as 2,000 during the first six months of 2018.”

Experts at MyMortgages.ie predict that recent proposals put forward by Fianna Fail to ban bank incentives to switch will lead to even greater level of activity as people try to “get in” before such legislation is introduced.

Sheahan went on to say: “Currently the mainstream lenders are offering sizable cash incentives to certain cohorts of the mortgage market top encourage them to move lender.

“The merits of his are up for debate but Fianna fail are putting forward a proposal to ban these cashback offers. If accepted, he Bill could come into force by he Summer, so we are going to see large swathes of people who might have, up until now, been on the “switching fence” make moves to avail of these offers before they are taken off the table.”

MyMortgages.ie have set out a sample case which saw mortgage holders save considerable sums by moving lender and reducing their rate.

Sample one: A couple with €390,000 (LTV <80%) outstanding over 28 years at a variable rate of 4% switched to a four year fixed rate of 2.6% which lowered their monthly repayments by €300  and saved interest of €99,000 over the remaining term.

“If this couple were to keep their monthly repayments at the same level as the higher interest rate, they could reduce the term of their mortgage by almost six years. We are seeing a lot of borrowers look at this option or a hydrid of reducing the monthly repayments together with the term reduction,” concluded Joey.

 

Source: Evening Echo  19/01/2018

If you are interested in getting a mortgage and would like to speak to us at MyMortgages.ie please don’t hesitate to contact us at info@mymortgages.ie in Cork +353 21 4277037 or 353 86 8060601

MyMortgages Ltd t/a MyMortgages.ie is regulated by the Central Bank of Ireland

 

 

 


 

MyMortgages.ie Dublin Galway

 

Grainne McGuinness.  Evening Echo

 

A Cork broker has reported a spike in calls from mortgage holders interested in switching their homes loan in the first weeks of January.

 

Joey Sheahan, Head of Credit at MyMorgages.ie on South Mall, believes a number of factors have led to the influx in enquiries. “We have experienced a three- fold increase in the volume of enquiries since January 2,” he said. “An increasing number of mortgage holder seem to know switching lenders to avail of a better rate might be a viable option. Towards the end of last year, myself and others endeavoured to highlight the fact that more mortgage holders can and should switch lender to reduce their monthly payments. It was also revealed that changes in the way lenders operate have meant that many only charge a very small, if any, break out fee from fixed-rate mortgages, so what was once a significant monetary hurdle to switching is now obsolete in many cases.”

The brokers expect that recent proposals put forward by Fianna Fail to ban incentives to switch will lead to an even greater level of activity as people try to ‘get in’ before any such legalisation is introduced.

“Currently the mainstream  lenders are offered sizable cash incentives to certain cohorts of the mortgage market to encourage them to move lenders,” Mr Sheahan said.

“The merits of this are up for debate but Fianna Fail is putting forward a proposal to ban these cashback offers. If accepted, the Bill could come into force by the summer, so we are going to see large swathes of people who might have, up until now,  been on the ‘switching fence’, make moves to avail of these offers before they are taken off the table.”

MyMortagges.ie put forward a sample case to highlight the amount mortgage-holders can save by moving lender and reducing their rate. They gave the example of a couple with €390,000 (LTV <80%) outstanding over 28 years at a variable rate of 4% switching to a four-year fixed rate of 2.6% which lowered their monthly repayments by €300 and saved interest of €99,000 over the remaining term.

“If this couple were to keep their monthly repayments at the same level as the  higher interest rate, they could reduce the term of their mortgage by almost six years.” Mr Sheahan said. We are seeing a lot of borrowers look at a hybrid of reducing of reducing the monthly repayment to gather with the term reduction.”

While the potential savings are impressive, consumers should be aware that switching a mortgage does not involve more work than switching other financial products. In 2017 the Competition & Consumer Protection Commission (CCPC) published a Mortgages Opinion Paper, which included research into switching.

“Mortgage switching is not something you are going to do repeatedly,” then CCPC Director of Communications Aine Carroll said. Consumers should think of it as getting a new mortgage, which it basically is. That way you will be more accepting of the level of paperwork involved. And at least it is getting a new mortgage without the stress of buying a new house. So yes, it is a lot of work, but it comes with a big reward, potentially saving thousands.

 

Source: Evening Echo 18/01/2018

If you are interested in getting a mortgage and would like to speak to us at MyMortgages.ie please don’t hesitate to contact us at info@mymortgages.ie in Cork +353 21 4277037 or 353 86 8060601

MyMortgages Ltd t/a MyMortgages.ie is regulated by the Central Bank of Ireland


MyMortgages.ie Cork Dublin
Fiona Reddan

Last year the Competition and Consumer Protection Commission warned that cashback offers might not make financial sense in the long term because of the higher rates often also charged.

New mortgage rates bill could see popular cash back offers banned – but home owners may benefit from pressure on rates

An amendment to a bill aimed at limiting interest rates on mortgages could see banks also banned from offering customers cash back on their mortgages. If enacted, it is hoped that banks will have to compete on the basis of their interest rates, rather than the selection of incentives they can offer potential customers.

According to Michael McGrath, finance spokesman with Fianna Fail, the Variable Rate Mortgages Bill, which he proposed in 2016 to give the Central Bank the power to limit interest rates on mortgages, is to be subject to an expert impact assessment. This comes on the back of the Attorney General warning that the bil may be unconstitutional.

The expert review is expected to take a couple of months, although Mr McGrath said he is “confident that the bill is constitutional” and that it will go ahead as planned.

In the meantime, Mr McGrath has proposed an amendment looking to see the practice of cashback on mortgages being banned. In recent years this has become an increasingly popular tool used by banks to drive up their market share, without having to cut mortgage rates. Bank of Ireland for example offers home buyers and switchers alike 2 per cent back on their mortgage as cash,with another 1 per cent possibly available for current account holders with the bank, while AIB subsidiary EBS offers €2,000 back in cash, and Permanent TSB offers not just a 2 per cent cash back on the value of your mortgage, but also 2 per cent of your monthly mortgage repayment back in cash every month.

“Customers like the attraction of cash back sums, but they can end up paying far more over the long term in terms of higher interest rates,” Mr McGrath said, adding that the amendment will initially focus on cashbacks, but may also consider other incentives such as money back on legal fees.

Last year the Competition and Consumer Protection Commission warned that cashback offers might not make financial sense in the long term becaue of the higher rates often also charged.

If the amendment is put forward and the bill is enacted, Mr McGrath said that banks will have to compete solely on interest rates, and not on incentives such as these.

“I am confident that if these cash back promotions are removed from the market, it will result in downward pressure on rates,” he said.

Of course Fianna Fail will need Dail support for the Bill, and as Mr McGrath said, “that will be tested in the coming weeks”.

Switch now to save

If this ban does materialise, many homeowners may rush to avail of the deals while they’re still available.

In recent years, Irish homeowners have appeared loathe to switch; figures from the Banking and Payments Federation of Ireland for the third quarter of 2017 show that just 777 borrowers switched or re-mortgaged, during the period, although the numbers switching are up 15 per cent on the year.

Already this year however, Joey Sheahan, head of credit at Cork-based MyMortgages.ie, has seen a jump in inquiries, and he expects the proposals to ban bank incentives will lead to an even greater level of activity as people try to “get in” before any such legislation is introduced. This means that the number switching could go as high as 2,000 during in the first six months of 2018.

While Mr Sheehan concedes that the merits of the cashback offers available “are up for debate”, he expects homeowners to make moves to avail of these offers “before they are taken off the table”.

Indeed while the offers can seem attractive, for many homeowners the financial gains of securing a lower interest rate can far outweigh any cash back offers.

This means that irrespective of the cashback offers, switching in itself often makes an awful lot of sense, particularly given that rates have fallen over the last 24 months. Mr Sheahan for example, says that someone on a €350,000 mortgage could save anywhere in the region of € 311 per month and € 112,000 over the lifetime of this 30-year mortgage.

Mr Sheahan gives the example of a couple with a € 390,000 mortgage (LTV>80%) outstanding over 28 years at a variable rate of 4 per cent, who switch to a four year fixed rate of 2.6 per cent. This lowers their monthly repayments by € 300 and saved interest of € 99,000 over the remaining term, while also cutting almost six years off their mortgage term.

 

Source: https://www.irishtimes.com/business/personal-finance/are-we-going-to-say-goodbye-to-cash-back-mortgages-1.3357467

If you are interested in getting a mortgage and would like to speak to us at MyMortgages.ie please don’t hesitate to contact us at info@mymortgages.ie in Cork +353 21 4277037 or 353 86 8060601

MyMortgages Ltd t/a MyMortgages.ie is regulated by the Central Bank of Ireland


MyMortgages.ie Dublin Cork

MORTGAGE cashback offers look set to be banned in a move that would hit first-time buyers and switchers hard.

Banks have been accused of using cashback incentives to camouflage their exorbitant mortgage rates.

Now a Fianna Fáil bill that will ban the practice of banks offering cash incentives to first- time buyers and movers could be law by the summer.

The Central Bank and the Competition and Consumer Protection Commission are also both opposed to cashback offers, as they see them as a device by banks to avoid cutting interest rates.

Mortgage rates in this country are a multiple of those paid by borrowers in the rest of the eurozone.

Banks, including Bank of Ireland, Permanent TSB and EBS, offer cashback of 2pc of the value of the mortgage drawn down to switchers and first-time buyers.

This works out at €2,000 for every €100,000 borrowed.

Separately, it emerged that fast-track planning applications for the development of more than 4,000 new homes will be decided within weeks.

Charlie Weston and Ronald Quinlan

Source: https://www.pressreader.com/ireland/irish-independent/20180113/284614602943074

If you are interested in getting a mortgage and would like to speak to us at MyMortgages.ie please don’t hesitate to contact us at info@mymortgages.ie in Cork +353 21 4277037 or 353 86 8060601
MyMortgages Ltd t/a MyMortgages.ie is regulated by the Central Bank of Ireland

 

MyMortgages.ie Dublin Cork

 

Time spent reducing your debts, bills and tax will be the most profitable time you spend this year, writes John Hearne.

A credit union survey suggests it takes an average of eight-and-a-half weeks to get back to normal after the annual overspend.

If you’re carrying a large credit card balance into the new year, take a look at the range of providers that offer low-interest rates on balance transfers.

Permanent TSB’s ICE credit card will give you 0% on balance transfers for the first six months, as will Avantcard’s Mastercard and KBC’s Cash Reward card.

Bank of Ireland goes one better with its Classic card, which offers seven months of zero interest.

If you think it’s going to take a little longer to clear the overhang, Ulster Bank and AIB offer 3.9% and 3.83%, respectively, on balance transfers for the full 12. Be warned, however. Credit card rates go as high as 22.9% the second the promotional period is over, and if you miss a payment date, the penalties can be very ugly.

For credit card switchers, the key thing is to make sure to close your old account. When you do, you will be hit straight away with stamp duty of €30. In order to avoid being charged again on your new account, get a letter of closure from your old issuer which you then send to your new credit card company.

Credit card switching won’t work for everyone. If the sum owed is too large, it will make more sense to get a short-term loan from the bank or credit union. Check out the financial comparison section of the Competition and Consumer Protection Commissioner site, cpcc.ie.

Whatever you do, do not try to bridge the gap with a loan from a moneylender. Just before Christmas, Provident, one of the biggest licensed moneylending companies, did a festive mailshot offering loans of between €100 and €600, to be repaid over either six or twelve months, at an APR of 187.2%.

For those struggling with debt, the first call should be to Mabs, the money advice and budgeting service. Once there’s a plan in place for dealing with general debt, the next thing to consider is the mortgage. If you’ve got a tracker, great. Do nothing.

Tracker mortgages are perhaps the only positive legacy of boom-era banking. The ongoing tracker mortgage scandal, in which a number of banks unethically forced customers off trackers, is ample evidence of the fact that offering them in the first place has been a source of deep regret for bankers.

If, however, you are on a variable rate mortgage — and even if you are on a fixed rate contract — chances are there are thousands to be saved by switching provider.

Recent figures illustrate this point neatly. Suppose you’ve got a 30-year mortgage worth €250,000, which carries a rate of 4.2%. Your monthly payments will be €1,222, while over the life of the mortgage you will pay back a total interest bill of €190,115. That’s nearly €200,000 in interest to the bank. To look at it another way, on these terms, you will pay back the principal you borrowed, along with 76% of that figure over the life of the loan.

Switching mortgage provider and securing a new rate of 2.75% will reduce your monthly repayments to €1,020, while the total interest bill over the life of the mortgage will fall to €117,417, a saving of €72,698.

“If you are a fixed or variable rate mortgage customer you are definitely of interest to other mortgage lenders,” says Joey Sheahan of MyMortgages.ie. “This means you could potentially save thousands of euro over the remaining term of your mortgage by switching mortgage provider. Due to the current low cost of funds available for banks, in many cases, there is no early breakage fee for exiting a fixed rate. You just have to call your bank to check this.”

In the last three months, there have been 10 rate adjustments to the mortgage market as competition returns in earnest. Meanwhile, lenders are offering a range of cash incentives to new mortgage customers.

Bank of Ireland will hand back 2% of the value of the mortgage after drawdown. In addition, if customers have a current account with the bank when they apply for a new mortgage, they can qualify for a further 1% cashback after five years.

Permanent TSB and EBS are also offering 2% cashback to all new mortgage customers, while Permanent TSB recently added a further incentive: It will pay 2% of the monthly mortgage repayment into “a permitted PTSB account” at the start of each month.

KBC is offering €3,000 towards legal and other fees. There are also preferential rates for current account holders, together with a 50% reduction in the cost of home insurance for the first year.

AIB will give you €2,000 within two months, while Mortgage Store and Ulster Bank will give you €1,500 towards your expenses. Don’t get carried away by these offers. They will allow you to take care of the legal fees that are inevitable when you change mortgage provider, but when it comes to assessing the financial benefits of switching, the impact of introductory offers is negligible. Look instead at the rates and the payback timeline.

The other point to make here is that switching is easier than you think. A Central Bank survey released earlier this year found that 44% of people hadn’t switched because they thought it would be too complex. However, of those that did take the plunge, a huge percentage said that it was a positive experience.

If you switch mortgage, switching energy and telecoms providers will be a walk in the park. Mark Whelan at independent switching site bonkers.ie says that energy switchers save €337 per year on average, while broadband, TV, and phone switchers can save up to €300. Go to one of the switching sites, like bonkers.ie or switcher.ie, where the whole process can be effected in minutes.

No one likes thinking about tax, but reviewing your tax affairs is almost always worthwhile. If you’re a PAYE worker, there are a range of credits available that don’t get factored into your salary automatically.

In fact, Taxback, the tax repayment company, says that the average tax refund it secures for PAYE workers is €995. You don’t, however, need to hire anyone to get what you’re legally entitled to. A few receipts and a little form filling is usually all that’s required.

Taxback has estimated that taxpayers are forgoing as much as €150m in unclaimed medical reliefs, while estimates would also suggest that tax breaks on tuition fees are being left unclaimed by thousands of taxpayers. PAYE workers can claim both through Revenue’s online portal, while self-employed taxpayers file the claim in end-of-year returns.

You don’t have to submit any receipts, but you do have to hold on to them in case you have to prove your claim. That’s four categories. General debt, mortgage debt, household bills, and tax. Time spent reducing these will be the most profitable time you spend this year.

Source: Irish Examiner https://www.irishexaminer.com/breakingnews/business/cutting-the-monthly-mortgage-bill-is-easy-and-profitable-821301.html

If you are interested in getting a mortgage and would like to speak to us at MyMortgages.ie please don’t hesitate to contact us at info@mymortgages.ie in Cork +353 21 4277037 or 353 86 8060601
MyMortgages Ltd t/a MyMortgages.ie is regulated by the Central Bank of Ireland

 

MyMortgages.ie Dublin Cork

Figures show first-time buyers now account for 50% of approvals as rising prices drive up average mortgage loan
Fiona Reddan

 

Every day in October, some 62 first time buyers got approval for a mortgage worth an average of €218,000, new figures show, which also reveal that while the rate of growth in mortgage approvals has slowed, the market remains on an upward trajectory.

According to figures from the Banking and Payments Federation of Ireland (BPFI), some 3,751 mortgages were approved in October 2017, at a value of €834 million, up by 20 per cent in volume terms, and by 35 per cent in value. According to Philip O’Sullivan, economist with Investec, rising house prices account for just over a third (37%) of the increase in the overall approval value.

The figures show that the average value of an approved loan was € 215,000 (€264,134 for trader uppers), up by 10 per cent on the same period in 2016. First-time buyers are very much driving growth, with approvals up by 30.7 per cent in the year to 1,911, accounting for about 51 per cent of all approvals

Dermot O’Leary, economist with Goodbody Stockbrokers, now expects mortgage lending to hit € 7.3 billion this year, up by 28 per cent on last year, and € 8.6 billion in 2018, “with net lending to also turn positive over the period”. O’Sullivan, economist with Investec, is a little more bullish, forecasting total drawdowns of €7.4 billion this year, and €9.1 billion next year.

The figures show that the fastest growing segment on an annualised basis was switching, as property owners look to move lender to save money in an increasingly competitive market. However, while volumes more than doubled between January 2016 and October 2017, the overall numbers remain low, with just 321 people switching in October of this year. Moreover, the numbers are actually down on an annual basis; down by 8.7 per cent in value and by 7.8 per cent in volume terms.

Investors are also slowly gearing up, with buy to let mortgages up by 22 per cent on the year; however they remain very low, with just 181 such mortgages approved in October.

As negative equity continues to ease, those looking to trade up or down are also on the rise, with mover purchase approval volumes up by11.3 per cent on the year to 1,132, accounting for 30 per cent of all mortgages.

Lending rules

The Central Bank is set to publish a review of its mortgage lending rules today. First introduced in February 2015, the rules restrict borrowers to borrowing 3.5 times their income, and 80 per cent of the purchase price for second time buyers, although exemptions are allowed.

While the regulator did soften the rules last year, further changes are not expected. Mr O’Leary said he would be “ very surprised” if further changes were made.

Source:
https://www.irishtimes.com/business/financial-services/more-than-60-first-time-buyers-get-approved-every-day-for-218k-mortgage-1.3308122     28/11/2017
If you are interested in getting a mortgage and would like to speak to us at MyMortgages.ie please don’t hesitate to contact us at info@mymortgages.ie in Cork +353 21 4277037 or 353 86 8060601
MyMortgages Ltd t/a MyMortgages.ie is regulated by the Central Bank of Ireland

 

MyMortgages.ie Dublin Cork

 

Written by Robert McHugh, on 24th Nov, 2017. Posted in Property

Despite the Central Banks recent efforts to highlight the benefits of mortgage switching to consumers, the majority of mortgage holders remain unaware of the potential savings that exist and of their eligibility to switch lenders.

This is according to figures from MyMortgages.ie who have revealed that on “average” mortgages throughout the country anywhere between €40,000 and €100,000 could be saved by moving to another lender.

The broker, reflecting the views of the sector, expects a surge in mortgage switching over the next 12 months as banks ramp up their interest rate price war with more and more households back in positive equity with every passing month.

In 2015, research from the Central Bank in 2015 showed that approximately 1 in 5 mortgage holders could make savings by switching their mortgage. And again, in August of this year the Central Bank tried to highlight the issue and by proposing the introduction of statutory requirements to support consumers considering switching their mortgage.

MyMortgages.ie say that judging by the Central Bank’s estimates, then many more people, maybe as many of 2 in 5 mortgage holders throughout the country should be switching to another lender” yet switching made up just 3.3% of the mortgage market in 2014 and while this figure has certainly increased since then, MyMortgages.ie believe it is nowhere near where it should be.

Speaking this week, Head of Credit with MyMortgages.ie, Joey Sheahan said, “A mortgage is most people’s biggest monthly expenditure and yet it’s something that people don’t pay enough attention to when it comes to getting the best value on the market. Many people assume that once they’ve taken out a mortgage with a lender for 20/25/30 years, then that’s the end of the decision making process. But mortgages are just like any other financial product – they should be reviewed every 3 years to ensure you are not paying over the odds.”

He added, “If you are a fixed or variable rate mortgage customer you are definitely of interest to other mortgage lenders which means you could potentially save thousands of Euro over the remaining term of your mortgage by switching mortgage provider. Due to the current low cost of funds available for banks, in many cases there is no early breakage fee for exiting a fixed rate. You just have to call your bank to check this.”

Source: www.businessworld.ie   

 

If you are interested in getting a mortgage and would like to speak to us at MyMortgages.ie please don’t hesitate to contact us at info@mymortgages.ie in Cork +353 21 4277037 or 353 86 8060601

MyMortgages Ltd t/a MyMortgages.ie is regulated by the Central Bank of Ireland


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