Brokers Note Rise in Calls Over Switching Mortgages.

 

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

 

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

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.


How Irish homeowners could save €3,600 a year by making mortgage switch – all your questions answered about making the move

According to MyMortgages.ie research, the ‘average’ borrower could save between €40,000 and €100,000 over the lifetime of their mortgage by moving to another lender

By Fiona Ellis   30 November 2017

MyMortgages.ie Dublin Cork

According to the company’s research, the “average” borrower could save between €40,000 and €100,000 over the lifetime of their mortgage by moving to another lender.

Joey Sheahan, Head of Credit with MyMortgages.ie 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.
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Some 14 months on from the introduction of the oft-discussed and much-maligned mortgage lending rules, they certainly seem to be having an impact.

Mortgage approvals have slumped 15 per cent in the three months to the end of February, compared with the same period a year earlier. However, industry players say this is not down to the rules alone. Approvals rocketed ahead of their introduction, so looking year-on-year may not be a fair comparison.

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