Best mortgage rates September 2012

Mortgage rates are constantly under review and even though we might be expecting an ECB rate cut this week to 0.5% (which will be a historic low) it is highly likely that rates will sit still or even rise. The conundrum for consumers is about the rate choice, banks have just upped rates prior to any rate cut and by doing this then not passing on a rate cut they actually increase their margin significantly.

The best mortgage rates at present are below:

<50% LTV: AIB 3.34% >80% LTV: AIB 3.79% 1yr fixed: AIB 4.15% 2yr fixed: BOI 4.49% 5yr fixed: PTsb 3.7%*

*The PTsb 5 year fixed rate is a good example of a pricing discrepancy that is related to the PTsb loan book, this rate is excellent, lower than the standard AIB variable and fixed for 5 years! The reason for this is that by lending on this type of property PTsb will increase their assets (to fix the loan to deposit ratio that is too high) quicker and in return they will give up some margin.

If …

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Broker tools: Cost per thousand 000′ sheet

One of the things that we constantly fall back on in mortgage brokering is the cost per thousand (usually written as ‘cpt’ or ‘cost per 000’) sheet. It gives you the actual cost of borrowing €1,000 at a certain interest rate over a certain period.

Banks tend to send out rate sheets which are particular to their specific products, but we also have our own cheat-sheets which cover most of the prices you’ll find (or at least ball park enough to make the difference meaningless).

If you click on the image to the left you’ll get a pdf of our Cost Per 000′ sheet. The way you figure out how much a mortgage might cost you is as follows:

Divide the mortgage amount by 1,000 (to get 1/1000th) and then multiply by the cost you find from going across the rate column and down the term column.

For instance: you want to see how much it will cost per month to borrow €317,000 over 30yrs at 4.25% then its 317×4.92 = …

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PTsb increase rates for the third time in a year

15:48 At 16:00 the press release about PTsb increasing rates will be released.

Had the company waited another week the headline ‘third time in a year’ would not have applied. It was this day last year that PTsb first increased rates on their variable clients by 0.5% or 50 basis points, it was a ground-breaking decision at the time, they were the first institution to do this and it opened the floodgates for every other bank to follow suit. PTsb were not in NAMA and they made their case, but it was rapidly criticised (in particular by Gerry Ryan who very decently gave the affected consumers a platform on his show).

The average mortgage balance in Ireland is €230,000 this time last year when the applicable rate was 2.69% the repayments would have been €1,053 per month on a 25 year mortgage. In the three rate hikes (totalling 1.5%, bringing the standard variable to 4.19%) the repayments will rise to €1,238 which will mean a total of €185 per month or €2,220 per year of …

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EBS rate hikes, the benefit of mutuality?

EBS have announced a rate hike of 0.6% which is a follow on from their last 0.6% hike that was levied against variable rate mortgage holders on the 1st of May, this brings their margin increases to a total of 1.2% for the year to date.

Today’s Indo lead with this story (by Charlie Weston) and rightly pointed out that by the time this is over, a person with a €300,000 mortgage over 30 years could expect to pay just over €3,000 a year (after tax) in increased mortgage payments. For a person on the average industrial wage this is like a full months wages before tax being sucked away by the financial system. Tax hikes and wage cuts aside, this will ultimately reduce the money that is being spent in the economy and it will disappear into the financial system where banks will use it to de-lever further.

The contention for many people is that they are being punished, not for what they have done …

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House prices: movements and trends in Ireland 2008

We have said for some time that house prices will fall throughout 2008, we saw a recent article in the Sunday Tribune saying that house prices would fall a further 10% in 2009. Our belief has been for some time that we will see the most dramatic drops in Q1 & 2 of 2009 and that after that the speed of decent would slow down considerably, coming to a ‘no growth’ landing some time in late 2009. There are reasons for this which we will explain below.

Firstly we have to see the market accept the rationalisation that is upon it, sites like Irishpropertywatch.com are tracking the fall in prices, yet there are still well publicised people in the construction and business communities calling for government intervention. This must be resisted as must all irrational request on the government. They hold the purse strings but that doesn’t mean they have to spend until lobbyists or special interest groups are satisfied, they must instead …

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