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

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