Late loan payments continue to rise

The Central Bank of Ireland reports that the total amount of mortgages that are now classified as long-term arrears have hit record highs, topping the charts at almost 6 billion euro. There are many types of properties that can and have become part of this number, but the largest group tends to be that of more residential properties.

In the previous quarter, mortgages in arrears were down significantly. Sadly, the largest category in mortgages in arrears, residential properties that are two years or above in late payments, is still increasing. The buy-to-let sector has been the largest subcategory of residential properties in arrears; 17.62% of the total is in arrears.

In April 2019, only 118 of all applications of mortgages for buy-to-let properties were approved while in April 2018 154 mortgages were approved. There was a 30% decrease within the same months separated by only one year, according to the Banking and Payments Federation Ireland (BPFI).

This huge scale down may be due to Brexit, or perhaps the seeming unreliability of buy-to-let properties ability to bring in …

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Borrowers Looking to Lower Existing Mortgages

Now, more than ever, it’s time that homeowners do whatever they can to lower their mortgages.

With the rise in European interest rates, it is expected that higher mortgages bills will be quick to follow.

Homeowners are beginning to get more and more comfortable as economic recovery since the recession has been tracked as going in such a positive way.

By overpaying on a mortgage the borrower will knock tens of thousands off of their mortgage easily. And they would dramatically cut back on the time it takes to finally become mortgage free.

According to Dowling financial, by an increase of 100 euro per monthly payment, the average mortgage would be paid off three years earlier and save nearly 12,826 euro in interest.

A small increase in payments leads to quite a substantial savings. Probably an effort worth it to most borrowers.

Those that should keep their guard up and remain mindful are those with a fixed rate mortgage.

Overpaying on fixed-rate mortgages could cause borrowers to be hit with an early redemption fee. A charge that could potentially be …

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Affordable Home Schemes

With the current housing crisis in the midst of the country, many plans have been developed to get the country out of its current slump. Some merely get laughed at, while others are well on their way to implementation within the housing market. It is likely that before long these effects will take a toll in the market and we will begin to see some upward movement in home buyer confidence.

The government has been quick to release multiple initiatives set out with the goal to turn the crisis around and allow the market to begin looking up. The Home Loan Scheme recently announced by the government is designed with the strategic plan to provide low-cost mortgages to first time home buyers.

With the first announcement of such a plan, many home buyers are thinking; is this too good to be true? As they have been waiting for an extended period of time for some light to be shed on the crisis that allows them to finally move into the homeowner sector.

The Rebuilding Ireland Home Loan …

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The Mortgage Rate War

Good news is underway for those looking to enter the housing market, but find borrowing rates to be making it too expensive.

There’s a mortgage rate war.

Though this term sounds less than appealing, it is a war in favor of getting lower rates to borrowers and moving more first time buyers into the housing market.

As discussed in a previous posting, Ulster bank recently announced dramatic cuts in their variable and fixed mortgage rates.

The question racking everyone’s brain after such an announcement was, will other banks fall in line to stay competitive in the market?

Ulster caused increased competition in the market and even more so, posed a threat to the other banks.

These other banks were beginning to notice that in order to stay competitive they only had one choice…

To get to Ulster Bank levels or face the result that they may lose all new entrants into the market as well as some of the old.

Shortly after the announcement of Ulster Bank to reduce their mortgage rates, followed KBC …

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Will Ulster Bank Dominate the Housing Market

Recently, Ulster Bank, a major mortgage lending bank, announced a drastic interest rate cut down to a 2.3% fixed rate for two years. Essentially blowing their competitors out of the water.

Against all other players in the market, the Ulster Bank is offering the lowest rate of all.

Ulster’s closest competitors, being the center at Haven Mortgages with a fixed rate set at 2.8%. All other banks showing rates setting at 3% – 3.2%.

The lingering question after this announcement by Ulster is, will we be seeing a shift in other banks to lower their rates as well?

This is an important question for the borrowers as well as the lenders for it impacts the business trend between banks.

If the competing banks believe they need to to stay competitive then it is likely that we will, however, if they have the advantage to keep them ahead of their competitors then they will have no need.

It is hard to say for sure if the other banks will follow in suit and lower their interest rates but that is genuinely …

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Is a ten year fixed rate a good idea?

Recently KBC introduced a 10 year fixed rate, they are not the first back to have done this, in the past other banks had them but their prices were high, the difference today is that you can get a 10 year fixed rate mortgage for below 3% and that means it’s worth considering.

First of all, why would you want to fix for so long? Obviously the longevity of a guaranteed price in a world where rates are expected to rise over time makes it attractive. This has to be balanced against the likelihood of competitive forces driving down Irish mortgage rates. Currently there is upside down pricing where fixed rates are cheaper than variable rates, how long this will last is anybody’s guess.

What we can do is look at the yield curve in order to get an idea of when rates might go up. Looking at that curve today (the quote date is from the 22nd which is last Friday) we see that yields are still negative a full six years into the future.  What …

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An opportunity for home owners amidst rising house prices

The average house price in Ireland has risen 11.2% over the past year, and prices in at least 8 counties are currently rising faster than that immediately preceding the market crash. Rapidly rising prices, low interest rates, and insufficient supply are together representative of the current situation in Ireland’s property market. Although this situation has many market watchers worried about possible inflation, and is definitely a hindrance to buyers still seeking for a home at an affordable price, there is a perk that could result for homeowners with an existing mortgage.

 

This blog post will illustrate this hidden opportunity and give homeowners the necessary knowledge if they intend to pursue it.

 

For homeowners with a high standard variable or fixed rate mortgage, your interest rate is most often based directly on your Loan-to-Value  ratio (LTV). The loan to value ratio is ratio of your loan to the value of your property. Each lending institution may have a different way of calculating and determining your interest rate but in general, the higher your LTV, the higher your interest rate. …

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Tensions are High in the Mortgage Market

This post is in reference to It’s time to shout ‘stop’ on excessive charges by Brendan Burgess and Banks warned over cashback mortgage deals by Donal O’Donovan. Both published on June 16 2017 in the Independent.

Interest rates are high for non-tracker mortgages and banks are offering cashback deals to manipulate customers.

Everyone is accusing everyone today in the mortgage market in Ireland with interest rates the highest in the European Union. The Competition and Consumer Protections Commission (CCPC) have sat idly by for the past years as the interest rates are rising when the CCPC is designed and paid by the taxpayer to protect the consumers. CCPC came out with a report yesterday stating Ireland needs more competition, long-term strategy, vision and more committees. No suggestions in the report have a solution for the short-term.

The Government, Central Bank, and the CCPC wants everyone to be patient and the competition with drive down mortgage rate… but how long from now? Government and the Central Bank have been saying this for the past three years and nothing has changed.

Now …

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Karl Deeter Mentioned in the Press

You can find an article at this link which mentions Karl Deeter, apart of Irish Mortgage Brokers – Bank accused of ‘gouging’ loyal customers cuts its fixed rates on June 15 2017. Article by Charlie Weston in the Independent.

Permanent TSB, a state-rescued bank, has been increasingly cutting fixed rates in response to being accused of manipulating their clients. The bank has lowered it’s two-year fixed mortgages from 7.25% to 4.20% and three-year fixed mortgages from 8.75% to 4.20%. They have almost halved both of their fixed rate mortgages but the variable rate at the bank has remained the same.

The Central Bank has noticed an increase of fixed variable rates compared to variable for both new borrowers and existing ones. Therefore, banks have been reducing fixed rates to increase competition amongst other banks. This will prevent clients to switching to other banks for better deals.

The bank also extended a 2% cashback on all new mortgage drawdowns, supposed to end this month but got extended to the end of the year.

Karl Deeter was mentioned accusing the bank …

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