Pros and cons of a variable rate mortgage

A variable rate mortgage is a mortgage in which the interest rate on the outstanding balance changes periodically. Typically, these loans will have fixed, or “teaser” interest rates for a specified amount of time, after which the interest rate will change based on a variety of factors. In most cases, the initial interest rate on a variable rate loan will be lower than a fixed rate, which can be appealing for homebuyers. But it is important to be aware of the pros and cons before jumping into a variable rate loan.

Pros

Flexibility

The number one advantage of a variable rate mortgage is flexibility. With a variable rate mortgage, you don’t need to worry about penalties for things like increasing your monthly payment, or paying off your mortgage early. You also have the ability to make lump-sum payments on your mortgage throughout the year, which can be very helpful for home buyers with a fluctuating income affected by bonuses or commissions. If your life is likely to change relatively soon, and you plan on eventually moving or selling the house, …

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Irish Households’ savings at record levels

Irish households saved more than 4 times the average amount during the first quarter of 2021, according to a recent study by the Central Statistics Office (CSO). The CSO reports that Irish households saved more than €10 billion during the first three months of 2021.

This massive increase in savings was undoubtedly related to Covid-19 and it’s corresponding economic restrictions. Due to businesses being closed because of lockdowns, government unemployment benefits, or some combination of the two, incomes either held steady or increased, while spending was dramatically decreased. The CSO also reported that uncertainty about the pandemic and how long the lockdowns would last may have forced many Irish citizens to build up an increased amount of precautionary savings, in case money became tight in the future.

When looking at the numbers, it is no surprise that savings grew dramatically when compared to the first quarter of 2020. Compared to the first three months of last year, Government subsidies increased by €1.1 billion, and social protection payments rose by an even larger margin of €2.7 billion.

While the Pandemic Unemployment …

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Why are investment funds buying up Irish Property?

Large-scale private rented sector (PRS) investors, sometimes called vulture or cuckoo funds, have rapidly become a major force in the Irish property market over the last few years.

As recently as 2017, these funds were a minor and insignificant part of the housing market. However, these firms have spent more than €6 billion buying Irish homes, apartment buildings, and commercial properties over the last three and a half years.

The cuckoo funds show no sign of slowing down in 2021, as they have spent €1.5 billion so far this year, according to recent figures from estate agents and property adviser JLL. Most of these funds are backed by international investors, and have quickly become big players in the market, particularly investing in deals for new apartments in Dublin.

But what is driving this relatively new and rapidly growing force in the market?

Analysts say that an influx of cash in European markets, lack of yields in traditional assets including bonds, and the huge surge in housing demand and high rent prices in Ireland have combined to create a very lucrative …

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Should you go to a broker or a bank?

First of all, a broker works with numerous banks or other lending organizations and can locate the best prices and conditions for you. Consider a broker as the intermediary between you and possible lenders and banking companies. A bank is, of course, an institution-specific direct lender. Many householders are looking for the best rates for loans. From 8 to 30 years, you’ll be stuck with your mortgage. Therefore you want a monthly payment that’s convenient to you.There are a few benefits to utilizing a mortgage broker, such as access to an extensive range of lenders; because brokers have access to a large number of direct lenders, they can shop and match your circumstances. They are like a personal tour guide who selects the finest airlines, hotels, and car rental businesses to get the most incredible bargain for you. You have your back, and they’re going to work together to make it work. A broker also saves you long-term time. As only one application must be submitted in full instead of only one application for each bank or lender alone, …

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Central Bank warns of New Home shortage

House prices have been surging in Ireland lately, and the new home market has been hit especially hard. The rise in house prices has been caused by a number of factors, and significantly accelerated due to the economic strains of the Covid-19 pandemic. Two recent reports from property websites myhome.ie and daft.ie have suggested that home prices are currently inflating at a 13 percent annual rate. Now, the Central Bank has warned that the pandemic will have a significant affect on the housing supply for the foreseeable future. The Central Bank projects that approximately 25,000 fewer new homes will be built between 2020 and 2023 when compared to pre-pandemic projections.

Among the many factors already driving an increase in pricing has been pent up savings. Consumers have had significantly less things to spend money on since March of last year, especially during those times when the country was under level 5 lockdowns-the strictest possible measure. People have not been able to shop at non-essential retail stores, eat or drink at their favorite pubs, or commute to work, leading to a …

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Is your car keeping you poor?

Everyone treats their car like it is their baby. Almost every one of us owns a car or two these days. It is an integrated object in our society. We give it names, notice its funny little quirks and much more to make ours. It conveniently takes us from place to place, but your car may be doing something evil that you are not aware of.

Many of us use our cars as status symbol. Our family, coworkers, or even friends will like us more. Maybe we use to make others envious of us. It creates an illusion our freedom is secure for us to go anywhere. Unfortunately, it does the opposite, it is more likely it will take away our freedom and security. We borrow money so we can purchase the car, the money we borrow has an interest, and we need to pay to maintain the car. Do not forget, once it comes off of the lot the car dramatically depreciates in value. New cars typically depreciate 60% in the first five years. Want to avoid it by …

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How to be an ethical investor

First, it is so hard now even before the pandemic to avoid the issues of human rights violation, climate change, corporate abuse, and much more. Sometimes even donating to organizations it is hard to feel those impacts. It causes us to feel crushed by all the problems happening around us and ignore them altogether. But have you taken a deeper look into your investment portfolio? You might ask yourself, is my money-making things better or worse? How can I only donate, but help myself and others in a sustainable way?

Of course, our intentions for investing are obviously to grow our money’s worth for the long or the short term, but on the flip side, the cost of the profits for the company might be quite damaging to not only us but to others. Although you are using your money for good intentions does the thing you are investing in believe in the same morals and principles as you are? Do you continue to take part in this system pretending nothing is happening or is there a better way to …

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How the Irish Government is handling its finances

During the secondary shutdown across Europe last December, the imposition of Level 5 restrictions has led to the fall of vax receipts seen this past January. Total tax revenue for the month of January 2021 was down nearly 9% compared to previous months, coming up to be around €520 million €5.4 billion.

Of the tax receipts, the VAT receipts have been hit the hardest. This largely is due to the impact of the decrease in consumed goods over the traditionally hectic Christmas period. In addition, there has been a continuous drop in excise duty, stamp duty, and corporation tax. The one exemption to all this would be the Stat’s income tax, which is their largest tax channel. This channel has performed better thane expected, which has become a common occurrence. The income taxes generated over €2.3 billion in January alone, which is up around 4% compared to the same month in 2020.

In forecasting how the economy will move in the future, the department states the suspension of its normal monthly tax profiles will soon be implemented. This is largely …

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Concern for Housing Supply in Ireland

COVID regulations have hit many markets hard, but possibly the worst be in the housing industry. Due to certain restrictions, the housing supply of homes built between 2020 and 2022 is predicted to be 23,000 fewer than normal. This, combined with the growing demand for housing as well as the built-up saving of household revenue during the pandemic could cause the demand for housing in Ireland to skyrocket, leading to higher pricing. Over the last year, it is predicted that over €13 billion have been saved up by families in Ireland, and with that many households are looking to improve their housing situation at the end of quarantine. The spending demand of these households far exceeds to the market supply of housing to be offered to said customers.

The Central Bank predicts that there will be 18,500 new housing completions in 2020, and in 2021 and 2022 that number will rise to around 22,000. This in total will be 23,000 fewer houses entering the market in these three years compared to the normal growth rate of housing supply prior to …

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Healthy Relationships with Money and your SO

Lots of people say money complicates things. Well, it may be true in some situations but being transparent about your significant other and money is important. Over the years you will attract what you are worth and what you put out there. How you act to others is a direct effect of how others will view you, this is not only for significant others but friends, family, etc. You worried you are with the wrong person or attracting the wrong people you might need to start reevaluating yourself.

Speak to your partners. Do you like saving money? Do you like investing? Do you like getting good deals? Communication is key. Being on the same page with each other is important to know each other’s values. By doing so, as partners you can start compromising to avoid unsaid annoyances. Letting each other know right from the beginning shows exactly who you are and who they are. It makes it easy to find someone like you or believes in the same things as you.

Money may be a taboo topic. Having conversations …

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