Irish Independent: Mortgage rates drop below 3pc – Central Bank

MORTGAGE rates in this country have fallen below 3pc for the first time in years.

But there is scope for much deeper cuts, mortgage experts said.

New figures show home buyers in this country with new mortgage agreements are still paying double the average rate in the rest of the Eurozone despite the fall in rates.

This is costing the typical new buyer €2,000 more a year than their European counterpart.

The average rate paid on a new mortgage in this country was 2.88pc in December, the Central Bank said.

This was down 13 basis points on the same month in the previous year.

However, the average rate being paid in the Eurozone is half of the one in this country, at 1.37pc.

Ireland is the second most expensive country in the Eurozone for mortgage rates after Greece.

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Rates are coming down due to more competition between lenders, according to Joey Sheahan, head of credit of MyMortgages.ie and author of ‘The Mortgage Coach’.

“But there is still a gulf between what our lenders are charging and what our European counterparts are offering their mortgage holders.

“We would hope that this gulf will continue to narrow over the coming years. We believe that there is scope for a cut of up to 0.25pc on some fixed rate terms,” he said.

Daragh Cassidy of price comparison site Bonkers.ie said the average first-time buyer mortgage in Ireland is around €225,000.

This means someone borrowing this amount over 30 years is paying almost €172 extra a month or over €2,058 a year compared to our European neighbours.

“That’s money that could be put to far better use,” he said.

He advised potential first-time buyers who are at the start of the mortgage journey to do their research.

“While the average new mortgage rate in Ireland is still close to 3pc, there are now rates as low as 2.25pc on offer,” he said.

Read the full article by Charlie Weston here –
https://www.independent.ie/business/personal-finance/mortgage-rates-drop-below-3pc-central-bank-38957118.html

If you qualify for the HTB scheme, you can claim up to 5pc of the purchase price of the house as a tax rebate

Your Questions

Q: My partner and I are renting a three-bed house in Galway for €1,300. We have just learned that we will be having our first baby at the end of the year and we would absolutely love to have our own home by then. We both have secure incomes as young teachers of €35,000, but we are really struggling to get a deposit together. The property we have our eye on is €270,000 and in a new development near where we already live. We have €5,000, and gifts from our parents will bring that up to €15,000. But that is still not enough. Is there any help out there for us?

A: One thing you may not have considered is Revenue’s Help-to-Buy (HTB) scheme. Because you want to buy a new-build, you may well be eligible, according to Joey Sheahan, head of credit with MyMortgages.ie and author of the newly released ‘The Mortgage Coach’.

To give you an idea of where you stand, you will need a total of around €32,400 to purchase the property.

This is made up as follows: 10pc, or €27,000, as a deposit, plus 1pc stamp duty of €2,700, and 1pc, or €2,700, toward legal costs.

Read the full article by Charlie Weston here –
https://www.independent.ie/business/personal-finance/we-need-to-buy-a-home-with-a-baby-on-the-way-is-there-help-available-38958512.html

Mortgage experts say homeowners could save up to €100,000 by switching to the lowest rates.

With specialists predicting the competition will begin to “heat up”, AIB has become the latest bank to announce a cut in its fixed loans.

It was claimed 220,000 borrowers currently on standard variable rates of up to 4.5% could benefit.

AIB announced yesterday it is cutting its three and five-year fixed rates from 2.85% to 2.55% and its green five-year fixed rate from 2.5% to 2.45%. This is its second mortgage rate reduction in less than 12 months.

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Meanwhile, MyMortgages.ie spokesman Joey Sheahan said he expects competition to “heat up”.

He added: “Existing and prospective mortgage holders should take note – there is great value on fixed rates.

“If you are applying for a mortgage, then you absolutely need to look at what all lenders are offering.

“And if you are already tied into a mortgage contract, then you should look at what your switching options are.”

Read the full article here –
https://www.dublinlive.ie/news/business/homeowners-could-save-up-100000-17808147

House prices have increased by more than 80% from their lowest point in 2013.

The latest Residential Property Price Index, issued by the Central Statistics Office (CSO), shows that prices are continuing to increase, albeit at a slower rate than this time last year.

In 2019, property prices increased by 0.9%. In 2018, the rate of increase was 6.3%.

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Joey Sheahan, head of credit at MyMortgages.ie, said, “Prices are stabilising but many first-time buyers are still struggling.

“There can be no doubt that thousands have stable incomes and can afford mortgage repayments, but need help to get that initial leg up on the property ladder.”

Brokers Ireland echoed this sentiment, noting that first-time buyers are experiencing “continuing difficulty” in accessing the market.

Read the full article here –
https://www.irishexaminer.com/breakingnews/ireland/house-prices-have-increased-over-80-from-lowest-point-in-2013-981573.html

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