Your personal finance questions – We earn €97,000 plus a bonus and have a €60,000 deposit. Can we afford to buy a house?

Your personal finance questions – We earn €97,000 plus a bonus and have a €60,000 deposit. Can we afford to buy a house?

Posted on 30Nov

Your personal finance questions – We earn €97,000 plus a bonus and have a €60,000 deposit. Can we afford to buy a house?

 

Source: https://www.independent.ie/business/personal-finance/your-personal-finance-questions-we-earn-97000-plus-a-bonus-and-have-a-60000-deposit-can-we-afford-to-buy-a-house-41071189.html

Q I am a teacher with a salary of €47,000. My husband, who works in tech in the private sector, earns €50,000 a year and can earn an annual bonus of up to 20pc of his salary, but it’s not guaranteed. Even though we are paying rent, we manage to save €2,000 per month and have saved a deposit of €60,000. We have a car loan that costs €400 per month. We clear our credit cards and overdrafts monthly. We spotted a house in Crumlin for €435,000. Can we borrow enough?

Joey Sheahan, head of credit at MyMortgages.ie and author of The Mortgage Coach, says you could easily carry the €400 monthly loan repayment. If you are currently renting and can afford to buy now, then it’s probably a good time because rents are so high and your mortgage repayments will, most likely, be lower than the rental payments.

 


Average house price exceeds €310,000 as home prices have doubled since 2013

Posted on 28Sep

The average price paid for a home in Ireland rose to €310,641 in the year to July, the latest figures from the Central Statistics Office (CSO) show.

Residential property prices increased by 8.6% nationally over the previous 12 months, compared to growth of 0.7% in the 12 months prior to last July and up from 6.9% in June.

In Dublin, house prices rose 8.1% year-on-year to a mean average of €479,454, rising to €649,916 in Dun Laoghaire-Rathdown, with prices up 9.1% outside the capital, most expensive in Wicklow €412,396.

‘In the period before COVID-19, the annual growth in residential property prices fell gradually from 13.4% in April 2018 to 0.9% in March 2020,’ CSO statistician Viacheslav Voronovich said.

‘While price growth remained subdued throughout most of 2020, a trend of accelerating growth emerged in the latter part of the year and into 2021.’

House prices nationally are still 10.7% lower than their 2007 peak, with the Dublin market 16.5% off highs posted in February 2007 and the rest of Ireland 13.1% below the May 2007 record.

Since early 2013, house prices nationally have nearly doubled (+99%), rising 106.8% in Dublin from their February 2012 low and 100% in the rest of Ireland since May 2013.

The volume of property transaction in July rose 49.2% year-on-year and 10% month-on-month, with 3,822 purchases filed with the Revenue in July compared to 2,561 the same month last year and 3,473 in June.

The total value of transaction finalised in July was €1.3 billion, with existing dwellings (3,221) accounting for 84.3% of purchases and new homes (601) representing just 15.7%.

First-time buyers made up just under a third (32.3%) of purchasers in July, and MyMortgages.ie head of credit Joey Sheahan said ‘their share of the market will continue to grow’ if the Help-to-Buy Scheme is extended in next month’s Budget.

He added that rising transaction numbers were ‘hopefully’ a sign of greater construction output.

Brokers Ireland director of financial services Rachel McGovern said that double digit growth in some area was ‘unhealthy for potential buyers and the economy at large’.

‘With the exception of the release valve presented by new blended working arrangements that would appear to have increased the appeal of areas like the South-East and the Midlands, which are seeing an 11% increase in prices, home ownership in the most populous areas of Dublin and its environs has largely become the preserve of those on higher incomes or those with strong financial support from family,’ she said.

Source: https://www.msn.com/en-ie/money/other/average-house-price-exceeds-310-000-as-home-prices-have-doubled-since-2013/ar-AAOthnI


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


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 Examiner: “Making Cents: The step-by-step guide to securing a mortgage”

Posted on 06Aug

By Grainne McGuinnes,  August 05, 2019 Read More


Sligo Weekender: “€8.9m of home sales in May amid call for help for buyers”

Posted on 01Aug

15/07/2019

There were 71 houses and apartments sold in Sligo in May, to a total value of €8.9m, but there has been a call for the government to extend the Help to Buy Scheme to help many who cannot afford to buy.

Read More


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