ICS Mortgages cuts interest rates

ICS Mortgages cuts interest rates

Posted on 18Aug

ICS Mortgages is reducing interest rates across its new residential variable and fixed-rate mortgages.

The lender said it will cut rates by up to 0.5% from next Monday 9 August.

Fixed interest rates will start from 1.95%, while variable interest rates will start from 2.45%.

Under these new rates, ICS said a typical first-time buyer taking out a 30-year mortgage of €250,000 could save more than €18,000 over the lifetime of their mortgage, when compared to the rates offered by one of the largest providers in the market.

That estimated saving is based on a €250,000 loan over 30 years, fixed for three years, with a Loan to Value of 90%, assessed against a similar mortgage offered by the one of the largest providers in the market, with a three year fixed rate of 2.55%.

“Buying a house is the single biggest financial decision most people will make in their lifetime. In recent years, however, Irish homebuyers have been offered a shrinking pool of options for how they fund such an essential purchase,” said Ray McMahon, Chief Commercial Officer at ICS Mortgages.

Mr McMahon said that favourable international financial market conditions allow them to now offer new residential customers reduced repayments.

Daragh Cassidy of price comparison website, bonkers.ie welcomed today’s news from ICS Mortgages.

“Strong competition is needed now more than ever as PTSB, AIB and BOI could end up with well over 80% of the mortgage market if the loan sales associated with Ulster Bank and KBC’s exits go through,” he said.

Mr Cassidy said ICS Mortgages is now only the second lender in Ireland, after Avant Money to offer a rate below 2%.

However, he said we shouldn’t lose sight of the fact that Ireland has among the highest mortgage rates in the Eurozone.

“The average rate on a new mortgage here is currently 2.80%, which is over double the currency bloc’s average of 1.27%,” he pointed out.

However Mr Cassidy said recent rate reductions from the non-bank lenders in particular, such as Finance Ireland, Avant Money and now ICS mean rates slightly closer to European levels are finally becoming more widely available.

“Avant Money, Finance Ireland and even ICS may not be familiar names to many mortgage seekers, who may be tempted to go to more well-known lenders such as AIB and BOI as their first port-of-call.

“However recent developments clearly show that it is the smaller, newer lenders who are offering some of the best value right now,” he said.

Meanwhile, Joey Sheahan, Head of Credit with MyMortgages.ie said the mortgage market has grown increasingly competitive both for first time buyers and those looking to switch mortgage or trade up.

“We predict a huge upswing in existing homeowners looking to switch to reduce their monthly payments on their variable rate mortgage, or to secure long-term cost certainty with one of the new fixed rate offers,” he said.

Mr Sheahan said a borrower could save €56,000 in interest by reducing rate from 2.95% to 1.95%.

He said that would be based on a €300,000 loan at 60% loan to value over 30 years.

 

Source: https://www.rte.ie/news/business/2021/0805/1239114-ics-mortgages-cuts-interest-rates/


House prices went up 7% in a year — and undersupply means they are going to keep rising

Posted on 12Aug

Housebuyers are paying an average of 7% more for a new home than they would have a year ago, with experts warning prices are only going to keep rising as long as the enormous gap between supply and demand remains.

The prices of homes have almost doubled since their recession-era low in 2013. While there was no increase in the year to June 2020, over the past year they have surged again — rising by between 6.9% and 6.4% in Dublin, and 7.4% across the rest of the country — according to the Central Statistics Office.

The figures are based on the sums people are actually paying, and not on asking price.

The biggest surges have occurred in the Mid-West (up 8.7%) and the South-East (8.6%), though in the South-West, they are only up 2.7%.

In Dublin, residential property prices have risen 103.7% from their February 2012 low, while residential property prices in the rest of the country are now 95.8% higher than their trough, which was in May 2013.

Experts have warned that the picture will remain bleak for would-be homebuyers without substantial government intervention and a huge increase in the completion of new homes.

The Institute of Professional Auctioneers & Valuers (IPAV) said the rising prices of recent months highlighted by the CSO figures are likely to continue for the foreseeable future.

According to Pat Davitt, IPAV chief executive, the divergence between supply and demand is enormous and is unlikely to change in any meaningful way in the near future.

“Supply is so tight that in some cases would-be sellers are not putting their homes on the market, lest they may not be able to find a suitable property to buy or that by the time they do prices may have moved beyond their budgets,” Mr Davitt said:

We’re back in an upward trajectory in all areas of the country. And anyone who is concerned with the wellbeing of society as a whole would not want to see this continue at this level for long.

Mr Davitt said that those on average incomes are unable to afford to buy a home in many areas. And for those who can afford it, a huge amount of the money they borrow and pay interest rates on for the lifetime of their mortgages goes back to the Government in taxes and levies.

“The new Government plan must tackle the supply issue in an unprecedented way,” he said, adding that the solutions must involve State investment as recently recommended by the ESRI as well as local authority utility investment and a review of the tax take on housing.

Joey Sheahan, head of credit at MyMortgages.ie, said: “It seems, from these CSO reports, that property prices are really only going one way for the foreseeable future and that’s up. This will continue as long as demand for properties outstrips supply.

“While construction has picked up, material supply issues and staffing shortages are hampering the delivery of much-needed homes,” he added.

Trevor Grant, chairperson of the Association of Irish Mortgage Advisors (AIMA), said the figures reflect months of construction delays caused by the pandemic.

“With most sites back up and running, we would hope to see an increased supply of new homes coming on stream later this year,” said Mr Grant:

That said, there are still too many developments caught in planning limbo and that is something that requires urgent action by Government. 

Despite the rising cost of buying a home, Mr Sheahan argued that the high cost of renting means it is not necessarily a bad time to consider entering the property market.

“Rents continue to financially cripple those in rental accommodation, so, in a vast number of cases, the cost of repayments on a mortgage is going to be smaller than what people are shelling out on rent,” Mr Sheahan said.

He said the situation is much different now than the one that led to the property crash over a decade ago, with prices rising more slowly and more stringent lending rules in place.

Source: https://www.irishexaminer.com/news/arid-40358162.html


How to help your money beat inflation

Posted on 18Jul

Whether you’re a careful saver or – thanks to the pandemic – an accidental one, the twin forces of zero interest rates and rising prices are creating a perfect storm that will slowly wear away the value of your cash pile if you leave it languishing in a deposit account.

According to the Central Bank, the startling rise in savings growth over the past year has actually tapered off over the last couple of months as the lockdown finally starts to lift, but ordinary households are still lodging cash in bank accounts at record levels – whether they want to or not.

But if you’re worried about the value of your fund being eaten away by inflation over the next year, what are your options?

1. Invest it

Assuming you are happy to lock away a sum of money for the medium to long term, an investment strategy – whether that’s putting your money into an investment fund or managing your own investments yourself – is well worth looking at. Needless to say, there’s always an element of risk, but there are ways to mitigate this and still deliver a return that beats inflation.

“I would generally direct those interested in beating inflation to look at the managed funds route and, in particular, the index funds, ETFs (exchange-traded funds) or even managed funds from the likes of passive leaders Vanguard or even Fidelity and Dimensional,” says Frank Conway of financial wellbeing provider MoneyWhizz and a qualified financial adviser.

“Other more actively-based managers can be more expensive and this will erode the long-term growth of money without necessarily achieving any more actual real growth compared to their passive options.”

For those happy to try the DIY route using online investment platforms or brokers, equities is “where the real inflation-proofing can take shape”, Conway says, but it still takes a lot of work and research.

“It goes without saying that a good supply of reason and less emotion is required to stand a chance of success. As equity prices rise and fall, the investor needs to take reasonable profits as they happen and also, limit losses.”

Property is riskier, he adds, unless you have significant funds to play with and you are familiar with the landscape of the sector.

2. Up your pension contributions

Paying more into your pension appears to be a popular move, according to a recent survey of pension advisors by the Independent Trustee Company, with more than four in 10 people increasing their contributions during the pandemic. It’s easy to see why, as paying into your pension has not one, but two tricks up its sleeve in any battle with inflation.

The first is that your pension will be invested in a broad base of assets, such as stocks and shares, property and bonds, that should help beat inflation in the long-term.

The second is the tax relief, at 20pc or 40pc whichever is your higher rate of income tax. So for every €100 you contribute, the real cost to you is only €80 or €60. There’s also the tax relief on the investment gains as well as the cash lump sum you can take when you retire.

You should be aiming for your pension to be worth at least twice the value of your home when you retire, according to Mark Reilly of Royal London. “€500,000 sounds like a big fund, but it might only provide you with an income of just over €1,100 a month for the rest of your life after you retire at age 60,” he says. So paying into your pension as a long-term inflation-buster is hard to beat.

You can also make additional voluntary contributions (AVC) to your pension fund that allow you to take full advantage of the tax relief.

3. Overpay your mortgage

Paying more into your mortgage may also have a lot to be said for it, as it could cut your mortgage term and save you thousands, but it’s worth taking advice on this if you’re not sure.

“We would advise any mortgage holder to give careful consideration as to whether they have access to a rainy-day emergency fund before using all savings to reduce their mortgage amount,” says Joey Sheahan of broker MyMortgages.ie and author of The Mortgage Coach. If you do have a sufficient rainy-day fund, then go for it but do run the figures past your lender or broker first, he says.

“If you had, say, a mortgage of €300,000 at 3pc interest over 30 years, you could save €5,200 by paying off a lump sum of €10,000, €10,400 by paying off a lump sum of €20,000, or €15,600 by paying off a lump sum of €30,000. Alternatively, by overpaying €100 a month, you could save nearly €20,000 over term of mortgage, and nearly €35,000 by overpaying €200 monthly.”

However, at least one advisor believes overpaying your mortgage shouldn’t be top of your list of inflation-beaters. “As an ‘investment’ option, it is overrated, oversubscribed to and under-delivers on value,” said Conway.

4. Pay down debt

At the same time as accumulating savings, more people have been using their extra cash to reduce debt, but the rate of household debt hasn’t been falling as sharply as the savings pile has been growing. Furthermore, the number of borrowers taking out personal insolvency arrangements (PIAs) hasn’t fallen much.

So if you have any ‘bad’ debt (i.e. consumer debt such as credit cards and personal loans that do little to improve your financial outcomes), using your savings to pay these higher-interest debts off is highly recommended.

Rank these debts starting with the most expensive (i.e. with the highest interest rates) and clear these first.

It is essential to check that there are no penalties for paying early. PCP car loans, because of the way they are structured, may not be a candidate for early repayment.

If your credit card bill is larger than your fund, an option is to transfer to a provider like An Post Money, who give you 12 months to repay at a zero interest rate.

5. Spend it on a big ticket item

If you already have a decent rainy-day fund, you’ve no bad debt, your mortgage interest is reasonable (if not, switch), and you’re happy with your current level of pension contributions, then of course treat yourself to a big-ticket item. If your hopes of splashing out on a summer 2021 holiday were dashed by the Delta variant, there’s always summer 2022. But if you’re happy to spend now, you can still be sensible about it.

For instance, buying a new car – particularly if it’s an EV (electric vehicle) – may be a better bet than a nearly new or a 3-5 year old model because used car prices here have stiffened considerably thanks mainly to Brexit putting a dampener on used car imports from the UK, where a lot of the best value used to be found. You will have to pay far more for a used car than you would have this time last year, and this is good news if you have a not-too-ancient car to trade in (unless it’s on a PCP deal).

Alternatively, if your home’s BER (Building Energy Efficiency) rating could be improved, spending money on a retrofit that improves your home’s energy efficiency is a great way to spend on a big-ticket item that will ultimately improve your financial outcomes – ie increase the market value of your home and save on energy bills. The Sustainable Energy Authority of Ireland provides grants that will subsidise up to 35pc of the cost of a retrofit, which could include measures like external wall insulation, new glazing, solar panels and air to water heat pumps. That said, the cost to the average household of bringing up their home to a B2 rating is €30,000-€40,000, leaving you with a final bill of around €26,000, so you may need to borrow a little.

If you do, there are a couple of schemes that can manage the whole process for you, including the finance and the project management. One of them is ProEnergy Homes, run by the Credit Union Development Association in partnership with SEAI and Retrofit Energy Ireland.

Source: https://www.msn.com/en-ie/money/other/how-to-help-your-money-beat-inflation/ar-AAMhaeR


‘I am facing an enormous tax bill on a house I inherited from my godmother – what are my options?’

Posted on 02Jul

I was left a house by my godmother who died last Christmas. She was my mother’s best friend, but we weren’t related by blood. My mother was very ill during my childhood and she took me in for a few years. She never married or had children herself and, in turn, I cared for her in her final years. I didn’t ask for the house, or put her under any duress for it. I say this only to stress the close relationship we had. I now discover to my horror that I am expected to pay an enormous tax bill on the house, far more than if I was her daughter or niece. Can this be fair?

Fair or not, you are caught by the rules surrounding inheritance taxes which place a far higher monetary value on blood relationships than friendships.

The maximum tax free amount that you can generally receive from a disponer (the person who died) who is not a linear relative is €16,250, under Group C thresholds relating to Capital Acquisitions Tax (CAT), with the remainder taxed at 33pc. This includes any other gifts received during their lifetime.

It’s a common issue, but not to be glib about it, you have a wonderful bequest left to you which I’m sure is welcome.

You don’t say how much the property is worth, but you will be required to have it valued at market rates and calculate the tax accordingly.

This may unfortunately involve selling it in order to meet the bill, although it may well be possible to get a mortgage on it, which would be less than you would have to borrow to buy it outright. I don’t know your age or circumstances, but a bank would certainly be open to that sort of arrangement.

I don’t know about your current living arrangements, but this bill may have a possible mitigation.

You say you were your godmother’s carer. If you lived with her as such, you may be able to claim Dwelling House Relief against the tax due. The conditions are strict, however, so I don’t want to get your hopes up:

The house must have been your only or main home for the three years before the date of the inheritance, and you must not own or have an interest in any other house.

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It must also have been the main home of your godmother. It must remain as your only or main home for six years after the date of inheritance (unless you are over 65 or are required by reason of employment or infirmity to live elsewhere). If you meet these criteria, then no CAT liability will be levied on your bequest.

The exemption will be withdrawn, even at a later date, if you sell the house and don’t replace it with another principal dwelling, or cease to occupy it, within six years.

If you believe you could be exempt from it would be worth getting in touch with a solicitor or tax advisor to make sure the requirements are all met and they can go about settling the paperwork involved.

Q I am married and my spouse and I are both healthcare workers, with three children aged 16, 13 and 10. My husband is 64, I’m 44.

We’ve been to few banks and inquired about applying for mortgage, but were only offered a very small amount and for a short term due to my husband’s age. We’ve been renting and paying nearly €2,000 a month for a three-bedroom house excluding bills. We are getting worried that the rent may increase again.

Do you know if there’s any other option for us or any recommendations that you can share?

Banks generally don’t like borrowers who are nearing retirement age and tend only to permit mortgages (or indeed loans of any kind) to 65, or 70 at a push with Bank of Ireland. The credit union may well offer you a loan and be a little more flexible. It’s certainly worth a meeting; many of the larger ones are now offering mortgages, but honestly, I think it’s probably a long shot.

I asked Joey Sheahan, Head of Credit at MyMortgages.ie and author of The Mortgage Coach to look at your query and she said: “Some banks will allow a married person to apply on their own despite being married. The benefit of this is that you can avail of the longer term mortgage, to the age of 70.

“So, in your case, this would be a 26-year term mortgage. The downside is that you can only use your own salary and borrow 3.5 times that amount. If you are a civil servant, then you potentially can move two points up on the pay scale and borrow 3.5 the increased salary amount.

“Sole applicants can also benefit where a spouse has an adverse credit rating or is not a first time buyer”.

The best of luck with mortgage hunting. A call to a mortgage broker may help ease your path.

Source: https://www.independent.ie/life/home-garden/homes/i-am-facing-an-enormous-tax-bill-on-a-house-i-inherited-from-my-godmother-what-are-my-options-40604412.html


Mortgage approvals surge, adding further pressure to the housing market

Posted on 29Jun
‘May has proven to be yet another very strong month for mortgage approvals activity, especially for first-time buyers.’

The severe pressure on Ireland’s housing market is showing no signs of easing, with mortgage approvals over the past 12 months surging to just under €12bn.

The latest figures from the banking industry show more mortgages were approved in the last year to homebuyers and builders than in any 12-month period since they first began recording figures in 2011.

According to the Banking & Payments Federation Ireland (BPFI), the number of new mortgages approved by banks in May jumped 7.4% compared to April. Of the €1.2bn in new mortgages approved last month, first-time buyers accounted for €643m, or 55.4%.

The new figures come as a range of reports were published this week confirming that the shortage of supply of appropriate homes is resulting in significant house price increases.

A report from property website MyHome.ie in association with Davy shows prices rising by 6.7% across the country over the past three months. Homes outside Dublin have seen the largest price increase, up more than 7% for the second quarter, and up 13.6% compared to 2020.

Speaking on the latest mortgage figures BPFI chief executive Brian Hayes said that May has proven to be yet another very strong month for mortgage approvals activity, especially for first-time buyers.

“Similar to the trend we saw emerge last month, we have seen a doubling of activity across many mortgage categories,” he said.

“It is important we view these figures in the context of how the country was operating in May 2021 compared to 12 months earlier.

While a number of Covid restrictions were lifted in May, lenders and customers had also adjusted much better to working within the restrictions and this is clearly borne out by the figures.”

In the 12 months ending May 2021, there were 48,935 mortgage approvals, valued at a total of €11.9bn. During this period, more loans were approved for home buyers/builders than in any 12-month period since the data series began in 2011 at 38,882. In value terms, approvals for home buyers or those building neared €10bn for the first time.

“These are significant figures, and very much signal a robust pipeline for drawdown activity later in the year,” Mr Hayes said.

MyHome.ie managing director Angela Keegan said it appears that the savings generated by homebuying professionals during various lockdowns have helped fuel property price inflation while also diluting the effect of the Central Bank’s mortgage lending rules.

Her comments are backed up by Joey Sheahan, head of credit at homes loan broker MyMortgages.ie.

We’re seeing much larger deposits as a result of pandemic savings, which are allowing people to look at larger properties than they might have otherwise had the financial capacity to do,” he said.

“Coupled with larger deposits, there is a desire to create home working spaces, and so we’re seeing people stretching for four and five-bed properties as a result.

“Tech workers, in particular, are favouring larger homes, which will allow for home working in the longer term.”

Source: https://www.irishexaminer.com/business/economy/arid-40324541.html


Spanish bank to shake up mortgage market here with 30-year fixed-rate loans

Posted on 23Jun

The latest move means mortgage offerings here are finally starting to resemble those in the likes of Spain and France

Spanish-owned mortgage provider Avant Money has upped the ante on its rivals by offering a range of new long-term fixed rates.

The provider is the first here to offer a 30-year fixed rate, in a move that has the potential to transform the mortgage market.

This means repayments will be the same every month for the life of the loan.

Its new continental-style offerings, for between 15 and 30 years, have rates as low as 2.25pc.

The suite of new long-term fixed rates from Avant Money comes weeks after non-bank lender Finance Ireland surprised the market when it launched an innovative 20-year mortgage.

Long-term fixes are a feature of mortgages on the continent, where rates from around 2pc are common.

The latest moves mean mortgage offerings here are finally starting to resemble those in the likes of Spain and France, despite the imminent departure of Ulster Bank and KBC.

Wholesale interest rates are at historic lows, with homeowners here mainly taking out fixed rates over increasingly longer period.

This means long-term fixed rates are starting to attract interest from borrowers here.

Now Avant Money has launched 15-, 20-, 25- and 30-year mortgages. The rates vary depending on the amount being borrowed relative to the value of the home, but are lower than those offered on most shorter-term home loans.

A rate of 2.85pc will apply for those borrowing over 30 years who are borrowing 60pc or less of the value of the home.

For those with a loan-to-value of 80pc the rate rises to 3.1pc. For those borrowing over 15 years, with a loan-to-value of 60pc, the new rate is 2.25pc.

Avant Money, owned by Spain’s Bankinter, shook up the market here last September when it launched offering the lowest rates. Its lowest rate is 1.95pc, considerably cheaper than its rivals.

The new products will have flexibilities built in. Avant Money will allow borrowers to overpay up to 10pc.

There will be a cap on the fees for redeeming the mortgage, and flexible options if moving home. Those moving will be able to port the existing mortgage to a new home.

Loans can be repayable up to the age of 70.

Switchers and movers are expected to be the most likely to take up the new products, but first-time buyers with big deposits may also find the certainty of a long-term fix attractive.

Head of mortgages for Avant Money Brian Lande said the new offers would allow Irish consumers the opportunity to lock into fixed rates for their full mortgage term at a time when interest rates are at a historical low.

“I’m also delighted to confirm that we will be extending these new flexible features to all of our existing and new customers across our product range,” he said.

In May, Avant Money cut a number of its rates, and launched four- and 10-year fixed rates, which are the lowest in the market.

This is in addition to having the lowest rate of 1.95pc for those whose mortgages are 60pc or less of the value of their homes.

Its aggressive pricing will be a relief to buyers and switchers as Ireland continues to have some of the most expensive mortgages in the Eurozone.

With the imminent departure of Ulster Bank and KBC, Avant Money is aiming to become the fourth largest provider of mortgages here after AIB, Bank of Ireland and Permanent TSB.

Source: https://www.independent.ie/business/personal-finance/property-mortgages/spanish-bank-to-shake-up-mortgage-market-here-with-30-year-fixed-rate-loans-40552755.html

Joey Sheahan, Head of Credit and Author of The Mortgage Coach, MyMortgages.ie

“ This is great news for mortgage holders in Ireland. Not only does a 30 year fixed term offer the promise of a guaranteed level of mortgage repayments over the long term for those mortgage holders who opt for it, it also represents a step in the right direction for the Irish mortgage market. We are catching up with our European counterparts when it comes to fixed rates – and overall better value on rates.

Other lenders will now find themselves under pressure to develop and offer better mortgage products so as to remain competitive.

Mortgage holders may well be confused or unsure as to whether a long term fixed rate is the best route for them, so we are urging anyone considering their options to contact a broker who can take an overall assessment of their individual situation and advise them as to the best course of action”. 


Blow for first-time buyers as two major banks cut off mortgage exemptions

Posted on 26May

Two major mortgage lenders have already reached the limit of how many exemptions to the Central Bank’s mortgage rules they are allowed to offer in a year.

Lenders are allowed to offer more than the strict rules of 3.5 times income and allow less than 20% in a proportion of their loans over a year. It means PTSB and KBC can no longer offer borrowers the mortgage exemptions that allow for loans over the threshold.  

Banks and other lenders have the freedom to lend a certain amount above these limits. In any one calendar year they can give an allowance of up to 5% of the value of mortgages to first-time buyers and up to 20% of the value of mortgages to second and subsequent buyers, and up to 10% of the value of mortgages to buy-to-let buyers.

Both lenders Permanent TSB and KBC, which recently announced it was leaving the Irish market, have used up the exemptions from the rule limiting the amount they can borrow relative to their incomes.

Many first-time buyers need an exemption to the loan-to-income rule, especially in cities where property prices are higher.

PTSB and KBC’s ending of exemptions comes as the Central Bank said it was holding ‘listening and engagement events’ next month as part of a review of the lending limits. The review will look at the effectiveness of rules and whether they have achieved their aims.

Association of Irish Mortgage Advisors chairman Trevor Grant said yesterday: ‘While this might seem like a blow to first-time buyers, we are advising people not to be disheartened; there are still a number of lenders offering exemptions, and this cycle will correct itself later in the year.

‘It does, however, highlight the importance of the mortgage application process itself and of ensuring that all the boxes are ticked when it comes to approaching a lender for approval.

‘When trying to secure a mortgage, it is imperative that applicants know exactly what lenders are looking for and how to present their particular case to them.’

Mortgage brokers have been flooded with calls from worried first-time mortgage applicants hoping to secure a home-loan.

Joey Sheahan, of MyMortgages.ie, said: ‘Our advice to all has been not to panic.

‘There are still four banks open to exemptions for first-time buyers – Haven, ICS, Finance Ireland, Ulster Bank – while PTSB has not closed off the option for second-plus-time-buyers. We are however, suggesting to those who are mortgage ready, not to delay.

The mortgage market is in a state of flux, as we have seen over the last few months with news of lenders leaving.

‘There has been good news too – most recently from Finance Ireland in relation to its longterm fixed rates.

‘All in all, there are still several banks very much open to new business, so those looking for a mortgage should continue as planned – a very many will be successful.

Source: evoke.ie/2021/05/26/evoke/blow-for-first-time-buyers-as-two-major-banks-cut-off-mortgage-exemptions


Making Cents: 20-year fixed rate ‘a big day for Irish mortgage market’

Posted on 18May

The maximum term of 20 years is twice as long as currently available to Irish mortgage customers.

While home-buying has been making headlines for all the wrong reasons of late, there has been some positive news for potential borrowers, with a number of new rates and long-term fixed rate options announced last week.

Finance Ireland – company which first entered the residential mortgage market in 2018 – launched a range of long dated fixed rate mortgages for owner occupiers.

The maximum term of 20 years is twice as long as currently available to Irish mortgage customers. It will mean that many home buyers may be able to have a fixed rate for the full term of their mortgage.

Finance Ireland CEO Billy Kane says the long dated fixed rates will allow customers to benefit from the ’historically low interest rates now available’.

“These fixed terms combined with flexible features provide exceptional certainty for customers and are a stated priority of the Government (ref: Programme for Government),” Mr Kane said.

Indeed the lender is partially backed by the Government, with the Ireland Strategic Investment Fund (ISIF) owning 30% of the business.

“We only distribute our mortgages through regulated intermediaries which ensures that all of our customers have advice about the suitability of any product to their specific needs,” Mr Kane added.

The fixed rate terms launched by Finance Ireland are for periods of 10, 15 and 20 years. The fixed rates range from 2.40% to 2.99% (annual percentage rate of charge (APRC): 2.58% – 3.06%) depending on Loan to Value (LTV) and the fixed term period. A 20 year fixed rate mortgage for up to 90% of the value of the home is priced at 2.99% (APRC: 3.06%).

Mortgage expert Martina Hennessy, Managing Director of doddl.ie, said the provider’s new offerings were structured to appease traditional concerns about long-term fixed rate products.

“In addressing four keys ways why long -term fixed rates may appear unattractive to Irish consumers, Finance Ireland is introducing a unique offering to the Irish market,” Ms Hennessy said.

The rate will reduce over time, you can overpay up to 10% of your outstanding balance without charges, the rate is portable and there is a capped break penalty.

“Their 15 and 20 year fixed rates are products that we see elsewhere in the eurozone, where rates are lower.

“Uniquely, with this fixed-rate product, if your loan to value drops then your rate will fall over time, assuming your value holds or increases.” The fixed rate will decrease as the loan is paid down versus the property value. Finance Ireland have also said LTV (loan-to-value) driven reductions to a customer’s fixed rate will be downward only – rates will never increase even were there to be a deterioration in house value versus loan outstanding.” Ms Hennesy also sees the extra repayment option and portability as key features.

“You can pay up to 10% of your outstanding mortgage balance in every year of your fixed-rate term, without early repayment charges,” she said. “Crucially, if you stay with Finance Ireland and you move house, you can transfer the rate on your current mortgage to your new home without incurring a penalty.

“They have also included a maximum early repayment charge which caps exposure to potential large break penalties.” Joey Sheahan, Head of Credit, MyMortgages.ie described the options as a ‘big day for the Irish mortgage market’.

“This news from Finance Ireland is really likely to shake things up – both in terms of how mortgage holders approach their choice of term and rates, and in the fact that if the demand for these products are strong, other lenders will make moves to bring similar offerings on stream – if they are not already in the process of doing so,” he said.

The Finance Ireland news was followed by an announcement from Avant Money, which launched Ireland’s lowest four and ten-year fixed rate mortgages and reduced rates on its existing seven-year fixed rate product. The new ten-year fixed rates will start from 2.1%, with four-year fixed rates starting from 1.95%. These rate reductions from Avant, which has caused a major stir since entering the Irish market last year, have been described by the Association of Irish Mortgage Advisors as ‘very good news for mortgage customers’.

These announcements won’t solve the massive issues of cost and supply in the Irish housing market but it does mean more choice available to those in a position to take out a mortgage.

Source: https://www.irishexaminer.com/lifestyle/healthandwellbeing/arid-40291547.html

 


Finance Ireland first to offer 20-year fixed rate mortgages

Posted on 13May

Rates range from 2.40% to 2.99% and will be available for up to 90% loan to value mortgages.

Non-bank lender Finance Ireland is launching a range of long-term fixed rate mortgages for home owners in Ireland, with options up to 20 years available.

The company, which entered the residential mortgage market in 2018, will also offer 10 and 15-year fixed rate mortgages, with rates ranging from 2.40 per cent to 2.99 per cent, depending on the loan to value and the period.

The maximum term of 20 years is twice as long as currently available to Irish mortgage customers. Even then, the 10 year fixed rates are typically offered on loans with a loan to value of typically around 60 per cent, although some will offer on as much as 80 per cent loan to value.

Finance Ireland’s new products are targeting owner-occupiers, rather than buy to let investors, and could appeal to customers finishing fixed rates with existing lenders, including Ulster Bank and KBC Ireland who are set to leave the Irish market. The company distributes its mortgages through brokers. The State’s Ireland Strategic Investment Fund (ISIF) and US investment giant Pimco each hold 31 per cent stakes in the Billy Kane founded company.

The rates will be available for up to 90 per cent loan to value mortgages, and customers will be able to move their mortgages to new properties during the term without incurring penalties, Finance Ireland said.

The fixed rate can also be decreased as the loan is paid down versus the property value, and customers will be able to overpay up to 10 per cent of the outstanding mortgage balance as a lump sum in each year of the fixed term, should their financial circumstances allow.

Managing director Donal Doran said those details were essential to the product. “It’s very clear that you cannot put out a 20 year fixed rate without the flexibilities,” he said. “We’ve developed this based on feedback and what brokers believe their customers have been asking them.”

The loans will also allow for changes in personal circumstances, with the penalty for repaying the loan early capped at 5 per cent of the loan balance in the first five years of the loan term for 15 and 20 year loans, and 2.5 per cent for the following five years. In the final five years of the 20 year loans, no early redemption charge will apply.

‘Booster shot’

The move was welcomed by Brokers Ireland, who said it gives a “booster shot” to competition and brings security to Irish mortgage holders.

“We have always maintained that mortgages are long-term products for which lenders can readily source long-term funding. That makes them very secure – for consumers and for lenders,” said Rachel McGovern, director of financial services at Brokers Ireland. “That they are only now entering the Irish market indicates just how staid, unimaginative and above all non-consumer-friendly the Irish mortgage market has been. In fact 10 year mortgages have only been introduced in recent years.”

However, she noted the rates were still higher than in other European countries, where long-term fixed rates have been the norm for years.

The announcement was a “good news day for new and existing mortgage holders”, said chairperson of the Association of Irish Mortgage Advisors Trevor Grant.

The country had become “accustomed to accepting uncertainty around the cost of financing our home purchases”. “If a developer told us the price of a house could be €300,000 or maybe €350,000 or possibly even €400,000 and that they could only confirm the price after we bought the house, we’d run a mile, yet we seem to accept uncertainty when it comes to the cost of mortgages.”

Managing director of mortgage advice company doddl.ie, Martina Hennessy, said the news was “a boost to the broker market”. “Crucially, if you stay with Finance Ireland and you move house, you can transfer the rate on your current mortgage to your new home without incurring a penalty.”

The move is likely to put pressure on other lenders to see them follow suit, said

Joey Sheahan, head of credit at MyMortgages.ie.

“This news from Finance Ireland is really likely to shake things up – both in terms of how mortgage holders approach their choice of term and rates, and in the fact that if the demand for these products are strong, other lenders will make moves to bring similar offerings on stream.”

‘Significant innovation’

Mr Kane, chief executive of Finance Ireland, said, “I’ve been involved with the Irish mortgage market for over 30 years and I believe that this is one of the most significant innovations made here in that time,” said.

Finance Ireland entered the home loans market in late 2018 after it bought Pepper Money’s €200 million home loans portfolio and mortgages platform, with UK asset manager M&G Investments providing the funding.

It was forced to abandon plans for a €100 million-plus initial public offering in May 2020 as the rapid spread of Covid-19 globally threw equity markets into turmoil. Mr Kane, a former chief executive of Irish Permanent said last month it would look at floating on the stock market in the second half of next year at the earliest.

Source: https://www.irishtimes.com/business/financial-services/finance-ireland-first-to-offer-20-year-fixed-rate-mortgages-1.4563959

 


New mortgage option set to shake up the market for homebuyers<!-- /*! This file is auto-generated */ !function(c,d){"use strict";var e=!1,n=!1;if(d.querySelector)if(c.addEventListener)e=!0;if(c.wp=c.wp||{},!c.wp.receiveEmbedMessage)if(c.wp.receiveEmbedMessage=function(e){var t=e.data;if(t)if(t.secret||t.message||t.value)if(!/[^a-zA-Z0-9]/.test(t.secret)){for(var r,a,i,s=d.querySelectorAll('iframe[data-secret="'+t.secret+'"]'),n=d.querySelectorAll('blockquote[data-secret="'+t.secret+'"]'),o=0;o<n.length;o++)n[o].style.display="none";for(o=0;o<s.length;o++)if(r=s[o],e.source===r.contentWindow){if(r.removeAttribute("style"),"height"===t.message){if(1e3<(i=parseInt(t.value,10)))i=1e3;else if(~~i<200)i=200;r.height=i}if("link"===t.message)if(a=d.createElement("a"),i=d.createElement("a"),a.href=r.getAttribute("src"),i.href=t.value,i.host===a.host)if(d.activeElement===r)c.top.location.href=t.value}}},e)c.addEventListener("message",c.wp.receiveEmbedMessage,!1),d.addEventListener("DOMContentLoaded",t,!1),c.addEventListener("load",t,!1);function t(){if(!n){n=!0;for(var e,t,r=-1!==navigator.appVersion.indexOf("MSIE 10"),a=!!navigator.userAgent.match(/Trident.*rv:11\./),i=d.querySelectorAll("iframe.wp-embedded-content"),s=0;s
New mortgage option set to shake up the market for homebuyers

Posted on 11May

A new mortgage option is set to shake up the market here as it offers Ireland’s first 20-year fixed-rate mortgage, providing a massive boost for the struggling property market.

Finance Ireland is launching a range of competitive long-term fixed-rate loans with rates for a 20- year fixed term mortgage ranging from 2.4% to 2.99% for up to 90% loan-to-value mortgages.

And best of all, the non-bank lender is backed by taxpayer cash, as the State-owned Strategic Investment Fund has a 30% stake in Finance Ireland.

The welcome move will pile pressure on banks to offer more competitive mortgage rates, something that is seen as a major boost for homebuyers.

The new cut-price rates would see homeowner repayments of just €1,052 a month on a €270,000 30-year mortgage with the first 20 years fixed at 2.99%.

Finance Minister Paschal Donohoe was not involved in the decision to back the deal but a spokesman said yesterday: ‘The Department [of Finance] welcomes the announcement which provides a new product for customers and will help to drive competition in the mortgage market.’

It came as President Michael D. Higgins yesterday became the latest to comment on the country’s housing crisis, saying that ‘radical solutions’ are ‘urgently needed given the magnitude of a housing crisis that is not abating’.

Reports published this week highlight a chronic shortage of properties that have resulted in soaring house prices while rents continue to skyrocket.

The historical new low 20-year fixed-term home loan was hailed by housing campaigners last night as welcome news for families struggling to get on the property ladder, saying other banks are sure to follow suit.

David Hall, of the Irish Mortgage Holders Organisation, said: ‘It’s good news and gives some people certainty for 20 years.’

The announcement was a ‘good news day for new and existing mortgage holders’, Association of Irish Mortgage Advisors chairperson Trevor Grant said.

Currently, the longest fixed-rate mortgage available in the Irish market is seven years – with a handful of providers offering a ten-year term but capped at an LTV of 80%. The Finance Ireland fixed rates are available for up to 90% LTV mortgages.

Rachel McGovern, director of financial services at Brokers Ireland, said: ‘That they are only now entering the Irish market indicates just how staid, unimaginative and, above all, non-consumer-friendly the Irish mortgage market has been. In fact, ten-year mortgages have only been introduced in recent years.’

Joey Sheahan, head of credit at MyMortgages.ie, said: ‘This news from Finance Ireland is really likely to shake things up – both in terms of how mortgage-holders approach their choice of term and rates, and in the fact that if the demand for these products are strong, other lenders will make moves to bring similar offerings on stream.’

The new lender is offering European-style home loans fixed for 20 years from as low as 2.6%.

Its arrival is sure to be welcomed by borrowers after recent announcements by KBC and Ulster Bank that they are pulling out of the Irish banking market.

Finance Ireland chief Billy Kane said: ‘I’ve been involved with the Irish mortgage market for over 30 years and I believe that this is one of the most significant innovations made here in that time.

‘We’ve been working on the introduction of longer dated fixed-rates for some time now in order to allow customers benefit from the historically low interest rates now available. These fixed terms, combined with flexible features, provide exceptional certainty for customers and are a stated priority of the Government.

‘We only distribute our mortgages through regulated intermediaries which ensures that all of our customers have advice about the suitability of any product to their specific needs.’

A spokesman for the Ireland Strategic Investment Fund (ISIF) said: ‘All ISIF investments are made on a commercial basis, in line with its double bottom line mandate of generating a commercial return and supporting economic activity and employment in Ireland. The announcement of new mortgage products today is a result of a commercial decision by the management of Finance Ireland, in which ISIF holds a minority shareholding.’

The maximum term of 20 years is twice as long as currently on offer in the mortgage market and will mean some home-buyers may be able to have a fixed rate for the full term of their mortgage.

The fixed-rate terms launched yesterday are for periods of ten, 15 and 20 years.

The fixed rates range from 2.40% to 2.99% depending on loan-to-value and the fixed-term period.

A 20-year fixed-rate mortgage for up to 90% of the value of the home is priced at just 2.99%.

Customers can also move their mortgage to a new property during the term of the fixed rate without incurring any penalty, can pay back a lump sum of up to 10% of their outstanding balance, without penalty, in each year of the fixed term.

Trevor Grant, of the Association of Irish Mortgage Advisors, said: ‘Given the recent negative news regarding KBC and Ulster Bank, this is a good news day for new and existing mortgage-holders and for competition in the market.’

Source: https://extra.ie/2021/05/14/business/property/new-mortgage-option


Irish Times: How to buy a fixer-upper and not get burned

Posted on 18Mar

By Joanne Hunt, Irish Times

So you’re thinking of buying a fixer-upper? Maybe it is a faded period charmer that hooked you, or an ugly bargain on a great street. But before you sign a contract, some hard questions will help you sort the diamond in the rough from the money pit.

Assess

When, halfway through a home renovation, TV presenters announce “Asbestos!’, building surveyors must scratch their heads. “It makes good telly, but that would have been evident if a good inspection was done on day one,” says Noel Larkin of Noel Larkin and Associates Chartered Building Surveyors. His top recommendation for those buying an old house is to get a building survey done first. This should eliminate surprises and indicate the cost of renovation.

Read More: https://www.irishtimes.com/life-and-style/homes-and-property/new-to-market/how-to-buy-a-fixer-upper-and-not-get-burned-1.4510065?mode=sample&auth-failed=1&pw-origin=https%3A%2F%2Fwww.irishtimes.com%2Flife-and-style%2Fhomes-and-property%2Fnew-to-market%2Fhow-to-buy-a-fixer-upper-and-not-get-burned-1.4510065


Irish Times: Fixed-rate mortgages: Shop around because there are deals to be had

Posted on 17Mar

Rates have continued to fall, so anyone paying more than 2.2% should have a rethink writes Joanne Hunt in the Irish Times.

Nobody wants to pay more for anything than they need to. Yet, if you are not considering the latest fixed-rate mortgage rates, that’s exactly what you might be doing.
Whether you are a first-time buyer, you are on a variable rate or you’ve already fixed, there are deals to be had. With fixed rates now ranging from 2.2 per cent, anyone paying more needs to ask themselves, and their lender: why?

Yet, if you are not considering the latest fixed-rate mortgage rates, that’s exactly … Some are switching lender to get a lower rate. … says Joey Sheahan of mymortgages.ie and author of The Mortgage Coach.

Read the full article here:

https://www.irishtimes.com/business/personal-finance/fixed-rate-mortgages-shop-around-because-there-are-deals-to-be-had-1.4202285?mode=sample&auth-failed=1&pw-origin=https%3A%2F%2Fwww.irishtimes.com%2Fbusiness%2Fpersonal-finance%2Ffixed-rate-mortgages-shop-around-because-there-are-deals-to-be-had-1.4202285


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