Cutting the monthly mortgage bill is easy — and profitable

 

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 Cork Dublin

 

John Hearne looks at why the right mortgage switch can deliver you up to €3,600 in annual savings

Mortgage brokers MyMortgages.ie reveals that switching mortgage providers can save homeowners anywhere between €1,200 an €3,600 per year.

Joey Sheahan is head of credit with MyMortgages.ie. He says that despite the fact that the mortgage payment is the most people’s biggest expenditure, it’s something that people don’t pay enough attention to when it comes to getting the best value on the market.

He says, “Many people assume that once they’ve taken out a mortgage with a lender for 20, 25 or 30 years, then that’s the end of the decision process. But mortgages are just like any other financial product – they should be reviewed every three years to ensure you are not paying over the odds.”

Mr Sheahan says he has no sympathy for borrowers who complain that they are paying high rates.

“There are lots of homeowners needlessly paying more than 3.6% in interest, but a large portion of people can easily switch lenders once they have 10% equity in their property.”

“Lots of people are struggling financially under the weight of these rates. We deal with clients daily who are unaware that switching could even be an option for them – many believe that they are simply locked in to the contract with their current lender. And those who have heard of switching, most think it’s too much hassle.”

Research two years ago from the Central Bank found that half a million mortgage holders – that’s 21% of the market – could save money by switching. The reason it’s not more is explained by the presence of tracker mortgages in the Irish market. These are mortgages that track the rate offered by the European Central Bank rate, which, remains below zero.

Tracker mortgages are perhaps the only positive legacy of the boom-era banking. The ongoing tracker mortgage scandal, in which a number of banks illegally 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 you have a tracker, do not be tempted to give it up.

In a 2015 Central Bank study, 33% of the sample total could make savings by switching, but were ineligible because of small loan values, the existence of an arrears balance on the account in the previous 12 months, and /or loan-to-value ratios of over 90%.

Joey Sheahan says that the Central Bank recently drew attention to the value to mortgage holders of switching by proposing the introduction of statutory requirements to support consumers considering switching their mortgage.

“If we go by the Central Bank’s estimates, then many more people, maybe as many as two in five 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, it is nowhere near it should be.”

As competition continues to heat up, most lenders are now offering a range of cash incentives to new mortgage customers.

Bank of Ireland will hand back 2% of the value of the mortgage after draw down. In addition, if a customer has a current account with the bank when they apply for a new mortgage, they can qualify for a further 1% cash back after 5 years.

Permanent TSB and EBS are also offering 2% cash back to all new mortgage customers, while PTSB recently added a further incentive. They will hand back 2% of the monthly mortgage repayment, so long as the customer open a Permanent TSB Explore Account.

KBC is offering €3,600 towards legal and other fees if you draw down a mortgage with the bank before the end of next month. There are also preferential rates for the 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, Pepper Money 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 your mortgage provider, but when it comes to you assessing the financial benefits of switching, the impact of introductory offers is negligible.

Look instead at the rates and the payback timeline.

Figures from MyMortgages.ie illustrate this point neatly. Suppose you’ve got a 30-year mortgage on €250,000, which carried a rate of 4.20%. Your monthly payments will be €1,222, while over the life of the mortgage you will pay the bank 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.

Fixed and variable.

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

To begin the switching process, the first step is to contact your existing lender and confirm your rate of interest, balance outstanding and term remaining on the mortgage. Ask them if the variable rate you are on is the best available, and what fixed rate option are available to you as an existing customer.  You can then go comparison shopping, or you could get an independent broker to compare what’s out there.

“The more equity you have in your home,” says Sheahan, “the better the new terms likely to be available to you but you can switch even if your loan is 90 of your value.”

And when you are comparison shopping, make sure to investigate fixed as well as variable rates. While the latter have always been the default option in the Irish Market, fixed rate have become increasingly popular in recent years. They offer the key advantage of giving you certainly in monthly repayments.

Source: The Irish Examiner 08/12/2017

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

Tuesday, December 05, 2017

For those of us not lucky enough to be on a tracker mortgage, there has been some good news in the last couple of month, with many of the main providers reducing either fixed or variable rates, writes Grainne McGuinness.

Bonkers.ie head of communications Mark Whelan, said recently: “There is finally some healthy competition entering the Irish mortgage market, which is good news.”

However, although variable rate customers will benefit immediately from any price increase from their own banks, many could still get better rates elsewhere. So what is the advice from experts? You guessed it, it is to switch. This is despite the fact that consumers are notoriously slow to switch providers, particularly for a complex product like a mortgage.

Joey Sheahan, head of credit with MyMortgages.ie promoted the positive benefits: “With the still curtailed new house building, banks are struggling to hit their mortgage
targets and so are turning to the switching market. This is creating an opportunity for many homeowners to make considerably savings.”

His company recently released figures which suggested that on ‘average’ mortgages throughout the country, anywhere between €40,000 and €100,000 could be saved by moving to another lender.

Mr Sheahan said people are struggling unnecessarily with repayments. “There are homeowners needlessly paying more than 3.6% in interest. A large portion of these people can easily switch lender once they have 10% equity in their property. There are less and less people in negative equity due to the unprecedented recovery in property values over the past few years.”

And yet, all the research and figures suggest that very few of us will switch. No matter how many experts advise us too, there is still a perception that the whole process is too difficult. So is it a lot of hassle? I asked Niall Daly, conveyancing partner with BDM Boylan Solicitors in Cork, for an honest assessment of switching and its popularity.

“We don’t see an awful lot of it,” he said. “There is some, but is not an avalanche. It would really want to make sense for someone, before they will consider it.” There are a number of potential issues he flags, although these will not affect all customers.

He says depending on the type you have, you may have to take out a new life policy, particularly if extending the term. If you have had any health issues since you took out your
original policy, you may run into problems if your insurer requires a fresh medical.

“It might not necessarily be a cost but it is one of those things you would want to be aware of,” he says.

One issue he is keen to highlight is the need to certify any work that has been done to the property.

“If the clients have extended or altered the house since they took out their first loan the solicitor should insist on getting an engineer to sign off on the work, and if it needed planning, check that they got planning,” he said.

Some solicitors will require that the local property tax is up-to-date on the property. There will also be a few hundred euro in charges relating to the deeds themselves. However, Mr Daly believes mortgage-holders should definitely review the loan, particularly if they originally took it out over a long term, 30 or 35 years.

“What I always say to clients is, if you can afford it, go back to your bank after a number of years and say you want to to reduce the term,” he said. “It will increase your monthly payments, so it does come down to affordability. But it will reduce what you pay in the long term. What people with very long terms are doing is taking short-term gain for long-term pain. You pay way more in the long run.”

While switching is a little more complex, he agrees it is something customers should consider as an option.

“Sit down with your calculator and make sure it is worth it. If the bank is paying the legal fees or giving cash back that will cover costs, that eases the pain. You can do it in less than a month if the customer is organised.”

 

Source: The Examiner 5/12/2017  http://www.irishexaminer.com/lifestyle/features/making-cents-switch-your-mortgage-to-avail-of-great-savings-463943.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.


By Christian McCashin
Home owners can save almost a third of the value of their mortgage by simply switching to a cheaper deal. A bank mortgage price war means anyone on an average variable rate can save hundreds a month on even a relatively small home loan of €150,000.

Joey Sheahan, of MyMortgages.ie said: ‘Many people assume that once they’ve taken out a mortgage with a lender for 20, 25 or 30 years, then that’s the end of the decision-making process. But mortgages are just like any financial product, they should be reviewed every three years to ensure you are not paying over the odds.’
Figures show anyone on ‘average’ mortgage rates can save between €40,000 and €100,000 by moving to another lender.
Brokers are expecting a surge in mortgage switching over the next year as banks ramp up their interest rate price-war with more households back in positive equity – which means the house is worth more than the mortgage – because of the surge in the property prices.

Davis Hall, of the Irish Mortgage Holders’ Organisations, said: ‘As consumers we don’t switch, we just have an obsession about not switching. We don’t engage in anything that involved a bit of hard work… It doesn’t make any sense to look at the price of a litre of petrol on garage forecourts and not be looking at switching your mortgage.
‘You’re also helping to spice up the market and contributing to kicking the market and let the bank know they can ring you back if they want if they have a better deal.’
More than one in five mortgage holders – 21% – could make savings by switching their lender, the Central Bank found recently.

And a Competition and Consumer Protection Commission report on mortgage switching revealed that while over a fifth of the adult population in Ireland hold a mortgage, limited evidence was found of switching.
Fewer than 25,000 of 740,000 mortgage holders switched their home loan – just 3.3% – in Ireland in 2014, a study by the European Commission found. Almost half – 44% – of all mortgage – holders surveyed felt the switching process would be too complex, while 27% of those who switched found no obstacles to the process.
More than a third – 36%- of their mortgage reported that they had to chase their lender to be kept informed during the switching process.

And a quarter said they considered switching but did not because they felt it would take too much time and too much effort.

Mr Sheahan, of MyMortgages.ie , said ‘We deal with clients on a daily basis who are unaware that switching could even be an option for them – many believe that they are simply ‘locked in’ to the contact and their current lender. And of those who have heard of switching most think it is ‘just too much hassle.’
‘People have also voiced concerns over the cost of switching but they don’t realise that most banks give cashback which will more than cover this from €1,500 up to 2% of the loan amount.’

Source: The Daily Mail 24 Nov 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.


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