Mortgage switching activity increases sharply year on year

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Mortgage switching activity increases sharply year on year

Posted on 21Apr

Mortgage switching activity increases sharply year on year

by MyMortgagesCategories UncategorisedTags , , , , , ,

Ireland’s mortgage switching market is exploding and not ahead of time – this is according to MyMortgages.ie, the online mortgage brokers who are reporting a 39 percent increase in their own levels of switching activity between March 2021 and March 2022.

The mortgage experts say there are a few main drivers to the avalanche of people looking to switch – namely KBC and Ulster Bank leaving the market, a sharp increase in competition, and some awareness around possible oncoming rate rises from the ECB. MyMortgages.ie are reporting that in the last 12 months alone

ICS and Avant Money introduced interest rates at 1.95 percent for up to five years fixed.

Finance Ireland and Avant introduced long term fixed rates up to 25 or 30-year fixed terms.

Haven Mortgages introduced a green rate of two percent fixed (all the way to 90 percent Loan to Value for four years with €2,000 cashback for switching.

The mortgage experts say they expect the volume of switching activity to ramp up to an unprecedented level as the year progresses. MyMortgages.ie have set out four examples of average cases in which the mortgage holder in question was able to make big, but not uncommon, savings:

Case 1

Currently on a standard variable rate of 4.25 percent with KBC or Ulster. Loan amount owing is €200,000 and value is €400,000 = 50 percent Loan to Value. Term remaining 30 years.

New interest rate 1.95 percent meaning repayments reduce by €249 monthly or €3,988 annually or €89,530 over 30 years.

Case 2

Currently on standard variable rate of 4.25 percent with KBC or Ulster. Loan amount is €300,000 and value is €400,000 = 75 percent Loan to Value. Term remaining 30 years.

New interest rate 2.15 percent meaning repayments reduce by €343 monthly or €4,116 annually or €123,480 over 30 years.

Case 3

A customer that owes €300,000 on a variable rate of 4.25 percent with KBC or Ulster Bank, with 30 years remaining, would have monthly repayments of €1,475.

A 0.5 percent interest rate rise would increase this to €1,564, which is an annual increase of €1,068 or €32,040 over 30 years.

A one percent rise in the ECB’s benchmark rate would increase the monthly repayments to €1,656 which is an annual increase of €2,172 or €65,160 over 30 years.

Tracker Mortgages MyMortgages.ie have observed that, in recent months, they have seen a steady increase in tracker rate mortgage holders enquiring about long term fixed rates, fearing that future interest rate rises could wipe out the benefit of their low margin trackers.

Case 4

A borrower that has €300,000 outstanding on a tracker rate of one percent, with 20 years remaining, would have a monthly repayment of €1,379.

A 0.5 percent interest rate rise would increase this to €1,447 – which is an annual increase of €816, or €16,320 over 20 years.

A one percent rise in the ECB’s benchmark rate would increase the monthly repayments to €1,517, which is an annual increase of €1,656 or €33,120 over 20 years.

Do I have to tell my insurer we have Ukrainians living in our home?

Posted on 16Apr

Do I have to tell my insurer we have Ukrainians living in our home?

by MyMortgagesCategories UncategorisedTags , , , , , , , ,

Q My family has welcomed a Ukrainian refugee and her two children into our home. I remember reading something in our home-insurance policy terms about having to declare if there is a change in the number of people resident at the property. Will this apply in this case? Even though it will hopefully, for their sake, only be for a short period.

A Generally speaking, a household should inform their insurer about any significant changes to their home, such as taking in new long-term residents, in order to understand any changes in their cover requirements. Their premium could change as a result of this, and some policy conditions may apply if the new residents are not immediate family or named policyholders, according to Elaine Kearney of Aviva Insurance Ireland. However, in the case of housing Ukrainian refugees many providers, such as Aviva, have waived this condition due to the unprecedented circumstances, and in line with Government efforts to find housing solutions for those arriving here to escape the war.

Insurers are treating refugees as guests meaning, in your case, that you don’t have to inform your provider that they are staying with you, Ms Kearney said. They will be covered by your policy in the same way as guests living in the home, she said. Over the longer term, if your policy is due for renewal within the first 12 months of the refugees living with you, you will need to inform your provider. If, after 12 months, any individuals or family are still living with you, then you should tell your insurer when your policy is next due for renewal, she said.

Q I have money to invest but want zero risk. I am considering gold but have no idea who to contact. Can you give any advice please?

A Interest rates are at historic lows. Some banks are imposing negative interest on some accounts – charging you to hold your money. So it is understandable that many people are seeking alternative investments in the hope of getting some level of a return or at least keeping up with inflation. There is a rule of thumb that must be considered when thinking about investing, Liam Ferguson, who is principal financial brokers FergA.com.

The lower the risk of any investment, the lower the potential return and vice versa. Any investment with zero risk will deliver a zero return or worse right now, he said. If someone tries to sell you an investment with low or no risk, but the potential for great returns, be deeply suspicious of both the person and the product.

In the current climate, low or no risk and good returns are an either/or choice, Mr Ferguson said.

Gold tends to swing into favour as an investment in times of uncertainty and indeed war, as it is perceived as a “safe haven”. This popularity tends to cause the price of gold to rise during uncertain times as investors seek safety. But gold is not zero risk or even low risk and can be very volatile at times.

For example, between October 2012 and December 2015 the price of gold dropped by over 40pc.

It recovered but it took until summer of 2020 before it reached the same price it had been in October 2012.

Mr Ferguson said gold is not a low-risk investment. Instead of looking for returns on zero risk investments, in 2022 the question needs, he said, to be how much risk are you willing to accept in return for potentially greater returns?

Q My husband and I both work in civil service. We are currently earning a combined €80,000 per annum. We have managed to save €17,000. We have never had any loans or debt. Could we get a mortgage? We work in Dublin but hope to buy at home in Cork. 

A You are very suitable mortgage candidates, according to Joey Sheahan, head of credit at online broker MyMortgages.ie.

You should be able to borrow three-and-a-half times your income which is €280,000. He said you may also qualify for an exemption, meaning you could potentially borrow up to maybe €320,000-€360,000. Based on your current monthly savings amount, in one year your savings will increase by €15,000, which means you will have €32,000. This would allow you to purchase a home for €320,000. The average house in Cork City is €313,000. As long your employer confirms in writing that its ok for you to work from Cork, there is no issue buying a house to live in Cork, Mr Sheahan said.

Source: https://www.independent.ie/business/personal-finance/do-i-have-to-tell-my-insurer-we-have-ukrainians-living-in-our-home-41557829.html

Five tips for switching your mortgage provider and getting the best deal

Posted on 29Mar

Five tips for switching your mortgage provider and getting the best deal

by MyMortgagesCategories UncategorisedTags , , , , , , , ,
The number of people switching their mortgage to avail of a better deal is soaring. The latest figures from Banking and Payments Federation Ireland found that there was a near 43% jump in people switching their mortgage over the last year. Given that making the switch could save you thousands of euro, Niamh Hennessy has compiled the top five tips to consider when switching your mortgage.
There are very strict criteria to be met when getting a mortgage and it is the same when it comes to switching.

Bite the bullet

You may still be traumatised about how hard it was to get your mortgage over the line in the first place that the idea of switching fills you with dread. However, it can be done and switching will not be as difficult as getting your first mortgage. Get into your mind that switching mortgage provider could save you thousands of euro and go for it. Generally it will take around eight weeks to complete a switch so try not to get frustrated and abandon the process if you feel it is taking too long. Joey Sheahan of MyMortgages.ie said every mortgage holder should reassess their situation every three years regardless of what rate they are on.

Costs

There will be some costs involved in switching mortgage provider, mainly the cost of a solicitor. However the bill should not be as big as it was when you were first getting a mortgage. This can deter many people from switching but your mortgage is a marathon rather than a sprint and short-term pain can lead to long-term gain. Your solicitor too will do a lot of the background work on this. According to Bonkers.ie legal fees for switching can be up to €1,500 plus VAT.

Deals

Increased competition in the market means that switching is now easier and more cost-effective than ever.

Keep an eye out for deals. Banks make a lot of money from mortgages and they will want you to switch to them. Often banks will offer switchers lump sum payments, which is often around €2,000 or even cover the cost of your solicitor’s fees. According to Trevor Grant of Irish Mortgage Advisors increased competition in the market means that switching is now easier and more cost-effective than ever.

Watch the rate

Although a deal is great make sure you focus on the rate. You could be paying this mortgage for another 20 years and while a lump sum would be nice, the lower the interest rate is the less you will pay over time. Mr Sheehan points out that a borrower could save €70,000 in interest over the life of their mortgage by reducing their rate from 3.2% to 1.95%. There’s a lot of talk in the market too that interest rates could rise which would mean higher mortgage repayments. Mr Grant said that mortgage holders should be asking themselves how they might deal with any such future increases and now is a good time to switch if you can.

Not everyone can switch

There are very strict criteria to be met when getting a mortgage and it is the same when it comes to switching. If your financial circumstances have changed since you first got your mortgage it may not be as plain sailing as you think. A mortgage switching application will take into account your current financial circumstances. So, if for example you reduced your hours at work to three days instead of five days and have two additional children since you first took out your mortgage then the playing field will be different. That is not to say it wouldn’t be possible but it is something to bear in mind. Generally too you will not be able to switch if you are in negative equity on your mortgage. If you are on a fixed rate too you may need to wait until the term of that deal is finished.

Source: https://www.irishexaminer.com/lifestyle/people/arid-40839290.html

House price inflation surges to 14.8% – highest in nearly seven years

Posted on 21Mar

House price inflation surges to 14.8% – highest in nearly seven years

by MyMortgagesCategories UncategorisedTags , , , , , , ,

Latest CSO numbers show average price paid for a home over last 12 months was €328,235

House prices grew at an annual rate of 14. 8 per cent in January, the sharpest level of growth seen in the market in almost seven years, as demand continues to outstrip supply.

Central Statistics Office (CSO) figures show the State’s property market continues to be stoked by pandemic-related factors, such as increased savings, remote working and lower-than-anticipated supply.

“We’re now seeing much larger deposits on the back of the pandemic, primarily down to the fact that some first-time buyers have been able to save up substantial deposits,” Joey Sheahan of consumer advocacy group MyMortgages.ie said.

“ While the cost of buying continues to increase, the cost of renting is almost always higher,” he said.

The CSO’s headline rate of inflation was up from a rate of 14.3 per cent recorded in December and has risen almost continuously since the start of the pandemic. In Dublin, where supply problems are most acute, prices rose at an annual rate of 13.3 per cent while prices outside the capital were 16 per cent higher.

Source: https://www.irishtimes.com/business/ey-entrepreneur-of-the-year/house-price-inflation-surges-to-14-8-highest-in-nearly-seven-years-1.4828431

Residential property prices climb almost 15% in 12 months

Posted on 16Mar

Residential property prices climb almost 15% in 12 months

by MyMortgagesCategories UncategorisedTags , , , , , , , , , , , ,

The average price of buying a residential property increased by 14.8 per cent nationally between January 2021 and January 2022 according to figures released by the Central Statistics Office (CSO).

The increase was slightly higher outside of Dublin (16 per cent), while the increase in the capital was noted as 13.3 per cent.

The median price of a home purchased in the 12 months to January was found to have been €280,000 nationally. On an area basis, Longford had the lowest median price (€130,000) while Dún Laoghaire-Rathdown in Dublin had the highest median (€595,000).

The latest figures show a 0.9 per cent monthly change compared to December 2021.

In terms of residential property type, prices of houses in the Border region saw the largest annual percentage change (+24.7 per cent), followed by houses in the southeast (+18.8 per cent) and houses in the midlands (+18 per cent).

The prices of apartments nationally (excluding Dublin) jumped by 17.5 per cent, and by 11.8 per cent in Dublin.

The CSO figures show the national index is now 3.3 per cent lower than its highest level in 2007, with Dublin residential property prices 11 per cent below their February 2007 peak, while prices across the rest of the country are 4.7 per cent below their May 2007 high.

Since their low point in early 2013, national prices have risen by 115.6 per cent. Dublin’s prices have soared by 120.4 per cent from their February 2012 low as the rest of Ireland has noted a 119.4 per cent increase from May 2013.

Commenting on the figures, head of credit with MyMortgages.ie Joey Sheahan says first time buyers continue to make up a strong cohort of the market.

“Demand for homes is unlikely to slow down, given the pace at which housing stock is entering the market. The extension of the Help-to-Buy Scheme remains a big support for first time buyers.

“We’re now seeing much larger deposits on the back of the pandemic, primarily down to the fact that some first time buyers have been able to save up substantial deposits.

“While the cost of buying continues to increase, the cost of renting is almost always higher. As such, we’d advise those in a position to buy, to go ahead once they find a suitable property,” he adds.

Mr Sheahan notes the number of ‘trader uppers’ is also on the rise since the pandemic, explaining: “People have had a chance to take stock, and many are deciding that greater space in the home is important to them.

“With the cost of building and building supplies on the rise, and the difficulty in getting tradespeople, people are opting for turn-key trade ups in greater numbers.”

Source: https://www.breakingnews.ie/ireland/residential-property-prices-climb-almost-15-in-12-months-1274836.html

There’s no ignoring what Putin’s war in Ukraine will mean for your finances

Posted on 12Mar

There’s no ignoring what Putin’s war in Ukraine will mean for your finances

by MyMortgagesCategories UncategorisedTags , , , , , , , ,

The Russian invasion of Ukraine has left thousands of ordinary people dead, including children, and millions of refugees have fled the country.

The human cost is enormous and the scenes from the country are heartbreaking.

Source: https://www.independent.ie/business/personal-finance/theres-no-ignoring-what-putins-war-in-ukraine-will-mean-for-your-finances-41437974.html

Your personal finance questions – Should we buy a home now or wait until I get a permanent position?

Posted on 05Mar

Your personal finance questions – Should we buy a home now or wait until I get a permanent position?

by MyMortgagesCategories UncategorisedTags , , , , , , ,
Q I am a doctor employed by the HSE and my husband is a journalist (employee). Our combined income is €150,000 a year. I expect to qualify as a consultant in two-and-a-half years. We have saved €45,000. Given the housing crisis, we are not sure if we should keep saving, and buy when we know our permanent location, as I don’t know where I will get an appointment yet. Or should we buy now in Dublin, to get on the property ladder?

A You could borrow at least three-and-a-half times your combined income, which would be a loan amount of €525,000, said head of credit at online broker MyMortgages.ie Joe Sheahan.

Source: https://www.independent.ie/business/personal-finance/your-personal-finance-questions-should-we-buy-a-home-now-or-wait-until-i-get-a-permanent-position-41413732.html

Homeowners can now save €56k by switching to the cheapest mortgage

Posted on 09Feb

Homeowners can now save €56k by switching to the cheapest mortgage

by MyMortgagesCategories Uncategorised

‘An increasing number of homeowners are now coming to the realisation that they can switch their mortgage and save thousands of euros’

Mortgage rates have hit a rock bottom and the European Central Bank (ECB) have threatened that the only way is up – with an interest rate rise of 0.25% expected between October and the end of the year.

The small rise in rates equates to about a €40 monthly increase on a €300,000 mortgage, and will only impact those on a variable rate or tracker mortgage.

The real savings to be made are those coming to the end of their fixed rate term on a rate from three to five years ago. Even if you’re in the middle of a fixed contract, it could be worth paying the penalty to exit early in order to secure the cheapest rate on the market of 1.95%.

Speaking to RSVP Live, Joey Sheahan, Head of Credit, MyMortgages.ie and Author of The Mortgage Coach says: “We are lagging behind our European neighbours in terms of mortgage rates. European interest rates are at an all-time low, but Irish mortgage rates, while competitive in this market, are still significantly ahead.

“In terms of value, Ireland’s mortgage providers are competing more on more on fixed rates – with longer terms and lower pricing.

“Mortgage switching is really driving activity in the Irish mortgage market at the moment, which is encouraging to see, given that every mortgage holder should reassess their mortgage contract at least every three years – regardless of what rate you are on.

“An increasing number of homeowners are now coming to the realisation that they can switch their mortgage and save thousands of euros.

“A borrower could save €56,000 in interest over the life of their mortgage by reducing their rate from 2.95% to 1.95%. Based on €300,000 loan at 60% loan to value over 30 years”.

Source: https://www.rsvplive.ie/life/homeowners-can-now-save-56k-26188951

MyMortgages.ie is a Proud Partner of Avant Money

Posted on 09Feb

MyMortgages.ie is a Proud Partner of Avant Money

by MyMortgagesCategories Promoted, UncategorisedTags , , , , , , , , , , , , ,

Avant Money (formerly known as Avantcard) launched today and confirmed its new mortgage products are now available to Irish customers, with fixed rate mortgages starting from 1.95%, by far the lowest rate in the market today.

The company has been providing credit cards and personal loans to Irish consumers for over twenty years. Avant Money is owned by Spanish banking group Bankinter, which also has operations in Portugal and Luxembourg.

We, at MyMortgages.ie, are proud to announce that we are one of Avant Money’s partners and we are here to guide and advise switchers, movers and first-time buyers on the range of these new products.

Joey Sheahan, Head of Credit, MyMortgages.ie and author of The Mortgage Coach says:

“Avant Money’s entry into the Irish market is the best news for Irish mortgage holders. We have long seen European rates well below 2% compared to closer to 3% for Irish mortgage holders, and now, for the first time since before 2008, rates below 2% are available to homeowners in Ireland. It’s a once in a decade or maybe even 2 decade opportunity where a new lender enters the Irish market and reduces interest rates to this extent. We are delighted to be one of Avant Money’s partners and our advice to mortgage holders is now is the time to review their current mortgage, even if they have done so recently. A mortgage holder with €300,000 outstanding with 32 years remaining and Loan to Value of below 60% can save €158 monthly or €60,000 over the term of mortgage based on reducing interest rate from 2.95% to 1.95%”.

If you would like to talk to Joey about your particular situation complete the form below:

 

Q&A with Joey Sheahan – Head of Credit, at online brokers MyMortgages.ie and author of The Mortgage Coach

Posted on 09Feb

Q&A with Joey Sheahan – Head of Credit, at online brokers MyMortgages.ie and author of The Mortgage Coach

by MyMortgagesCategories UncategorisedTags , , , , , , ,

Head of Credit, at online brokers MyMortgages.ie and author of The Mortgage Coach

  1. My husband and I both work in civil service. We are currently earning a combined €80,000 per annum. We have managed to save €17,000, saving €1250 per month. We have never had any loans or debt. Could we get a mortgage? We’re currently based in Dublin, but realise our salaries won’t allow us to buy here. We’re hoping to buy at home in Cork. Is this possible?

 

Yes, you are very suitable mortgage candidates. You should be able to borrow 3.5 times your income which is €280,000, and possibly qualify for an exemption, meaning you could potentially borrow up to maybe €320,000 – €360,000. Based on your current monthly savings amount, in 1 year your savings will increase by €15,000, which means you will have €32,000. This would allow you to purchase a home for €320,000. According to the most recent report, the average house price in Cork City is €313,000. As long as your employer confirms in writing that it’s ok for you to work from Cork, then there is no issue buying a house to live in Cork if your employer is based in Dublin.

Q&A with Joey Sheahan – Head of Credit, at online brokers MyMortgages.ie and author of The Mortgage Coach

Posted on 09Feb

Q&A with Joey Sheahan – Head of Credit, at online brokers MyMortgages.ie and author of The Mortgage Coach

by MyMortgagesCategories UncategorisedTags , , , , , , ,

Head of Credit, at online brokers MyMortgages.ie and author of The Mortgage Coach

  1. My wife has inherited a home with her 2 siblings. They have made the decision to sell it. We expect to have €200,000 cash in 6-9 months’ time. We have not been saving. She is self-employed and her salary fluctuates, but she has made a minimum of €50,000 the last 3 years. I work as an engineer in a global software company and my salary is €90,000. I also take home €30,000 pa in bonus and shares. Can we use the €200k as our deposit, and still get a mortgage, even though we haven’t been saving?

 

Yes, absolutely. If you guys have been paying rent,  then the monthly rental payments will serve as proof to the ban of your ability to meet monthly mortgage repayments. If you are not paying rent, then you have ample time, between now and when you receive the inheritance funds, to start saving now to be able to show the necessary savings record of  6 months.

Q&A with Joey Sheahan – Head of Credit, at online brokers MyMortgages.ie and author of The Mortgage Coach

Posted on 09Feb

Q&A with Joey Sheahan – Head of Credit, at online brokers MyMortgages.ie and author of The Mortgage Coach

by MyMortgagesCategories UncategorisedTags , , , , , , ,

Head of Credit, at online brokers MyMortgages.ie and author of The Mortgage Coach

  1. I’m a doctor (HSE) and my husband is a journalist (employee). Our combined income is €150,000 pa. I expect to qualify as a consultant in 2.5 years. We have saved €45,000. Given the housing crisis, we’re not sure if we should keep saving, and buy when we know our permanent location in 2.5 years (as I don’t know where I’ll get an appointment yet) or should we buy now in Dublin, to get on the ‘property ladder’. What would you recommend? How much could we borrow now, and how much could we be expected to borrow in 2.5 years?

You could borrow at least 3.5 times your combined income, which would be a loan amount of €525,000. You could potentially secure an exemption, given you are both high earners, meaning we could qualify for a loan amount of maybe 4.5 times your income, which would be €675,000. However, you would need to increase your deposit, as you would need 10% of the purchase price. If you are currently renting, I would give serious consideration to buying now as the rent you will pay in Dublin over the next 2.5 years will really add up. The average monthly rent in Dublin is approximately €2,000 so if you multiply this by 30 months, it means you could pay at least €60,000. The monthly repayment on €525,000 mortgage over 35 years at an interest rate of 2.2% would be much less at €1,793. If work dictates that you have to move county down the line, then you could rent out your Dublin property and the rent should cover the mortgage repayments, subject to any tax obligations.

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