Understanding German Mortgages.

Mortgage lenders in Germany allow you to borrow up to 100% of the property value (although you will have to cover some other costs of buying a house, such as purchase fees, with your own equity). While some German banks will be willing to finance the full amount, loans of around 80% are more common.

A major German community-oriented bank that wants to bring its model to Ireland believes it could play a role in solving the housing crisis. Sparkasse, the biggest bank in Germany, wants to create an alternative to the major commercial banks, particularly in regional towns.

The European Investment Bank has indicated support for the €200m project, said Sparkasse. That support is conditional on the proposal receiving political backing in Ireland. So far, this has been slow to materialize.

Sparkasse, which issues half of all German mortgages at rates well below standard Irish rates, believes Ireland is ideal for its municipality-owned, non-profit model.

The 200-year-old bank is aimed squarely at SMEs and the middle segment of the market. In Germany, where it has 300,000 staff in hundreds …

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How to get a mortgage Ireland

There are many factors which play a huge role in your mortgage deal. Before starting to look for a house you should check with the lenders to get a statement of how much they are able to lend you. So you will know in what price range to look for a house.

The factors are: Your credit score – past payment history and borrowing behaviour [the higher score the better. The lower credit score you have the more you overpay.] Your debts – the less debts you have the better. If you owe too much, you will have to take out smaller mortgage or pay off your debt before you apply for a mortgage. Your work history – To get a mortgage you have to provide a proof that you are employed and have steady income and job [switching jobs all the time is not a great look for lenders]. Your down payment – The lender usually wants you to put money down so they have some sort of protection. Ideally 20% of the cost of your home [so you …

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Low rate mortgage Ireland

Ireland is a country with the second-highest mortgage rates. Despite a slight dropping in 2021 the rates borrowers still overpay more than the eurozone average which is 1.27 percent. In 2021 the mortgage rates have dropped to their lowest in four years yet they are still more than double the average eurozone.

In August 2021 the fixed-rate mortgages were weighted to be 2.62 percent, down 4 basis points. The interest rate stood at 3.31 percent in August 2021, down 15 basis points year on year. So in Ireland, an average borrower is paying 180 euros a month more than in other European countries.

The reason behind it is that mortgage lending in Ireland is considered risky and banks struggle to enforce security if loans go into arrears so they must hold around three times the level of capital to safeguard against potential loan losses. The Central Bank statistics show that only in Greece the rates are higher.

This was a guest post by Agáta Hánová who interned with us in December 2021.

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Home of the Year 2021 and RIAI Awards – by Nikola Lancova

The Home if the Year is a competition series where the team behind RTÉs is searching for the most unusual and architecturally stunning private houses. The desicion is based on functionality, clever design and individuality. Each week the team of three judges visits three homes across the country. They give the house score out of 10. The home that receives the highest score goes through to the finals.

This year it was the seventh season of this competition series. In this season judges visited 21 homes across Ireland. From these 21 competitors, the judges selected seven finalists:

David O’Brien (Cork) Jennifer Sheahan (Dublin) Tanya Lee Conroy and Noel Conroy (Galway) Saara and Mike McLoughlin (Co Limerick) Sally-Ann and Ruairí Mitchell (Dublin) Kevin Desmond (Dublin) Kate and Cian O’Driscoll (Dublin)

Of the above competitors, Jennifer Sheahan from Dublin won the prize. Her house is 1800s cottage in Dublin. She bought this house in 2019, it needed a lot of work, it was damp, there was no central heating and the toilet was outside. Jennifer renovated the entire house, knocked all internal …

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Will housing for all work?

Ireland was in housing crisis before the Covid-19 pandemic, but the situation has worsened due to the pandemic. The housing crisis was caused by high unemployment,then because property is sold preferentially to profitable companies and rents have increased more tha 60% since 2010.

Right now, Ireland’s housing system is not meeting the needs of enough people:

There are not enough houses to buy or rent There is not enough social housing The cost of building housing is rising Too many people are homeless Too much vacant housing stock remains unused

Because of that The Government came up with Housing for All plan. Housing for All is the Government’s new plan how to decrease homelessness in Ireland by 2030, and it was published on 2 September 2021. This plan is intended to support homeownership and increase affordability, increase social housing delivery and support social inclusion, increase new housing supply and adress vacancy and efficient use of existing stock. Government believes it can embed environmental, economic and social sustainability in housing system for future generations. The State will invest more than 4 …

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Avant Money turned 1 year old, and in that time they changed everything.

Avant Money is part of the Bankinter group and they have been in the market for just one year and in that time they have been transformational in terms of what they have achieved in the current landscape.

To begin with they came in and offered the lowest rates we have ever had since the days of tracker mortgages, their fixed rates were also available for longer durations at these low rates than the other leading rates of the day. After that they brought out a suite of fixed rates which were also at the forefront of the market.

As a lender who distributes exclusively through brokers this is wonderful in our view as it drives people towards independent financial advice and greater selection. We can’t wait to see what Avant Money has coming down the line in year two!

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Are we at risk of Celtic Tiger property prices?

The Sunday Indepnedent ran a piece quoting Karl Deeter on the danger of high house prices, he said that ‘trees don’t grow to the sky’ which is a common expression in economic analysis that warns of the dangers of extrapolation upwards.

It’s common to hear ‘never again’ until something does happen again and that’s a real risk in housing because the headwinds are there to encourage an industry to go into hyper-supply which does resolve shortages but which usually also overshoots.

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Promote housing, tax it appropriately and spend that money on making more housing

When you talk about being in favour of ‘more property tax’ you quickly lose the room, but what if we had less income tax and more tax on immovable assets? This is a targeted wealth tax given the way that property and wealth are intertwined, it also means those with the most valuable homes would contribute more and could encourage down-sizing too which would help free up chronically under-occupied housing stock.

This can be an emotive topic, we understand that, but so is the plight of young people facing a market that isn’t affordable and a housing shortage that is driving prices to dangerous levels.

Listen to the full clip here.

 

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Is state intervention required to stop ‘cuckoo’ funds from buying homes?

We spoke to Newstalk about the idea of whether the state needs to intervene to stop ‘cuckoo’ funds from buying up homes. This is because the sale of a housing estate became a national press story due to a fund coming in to buy it up.

It is understandable that people are upset, there are buyers who had set their hopes on living in those properties, but that emotion can’t eradicate the fact that renters are people too and they also need homes, family homes. Or that there are people who may not want to buy or can’t afford to who need family homes.

These things all need to be considered and it isn’t as simple as saying it’s universally good or bad, the clip will help to make this clear.

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