Tracker Mortgage Scandal

A tracker mortgage is a mortgage that has its rate tied to the European Central Bank rate. AIB and other banks looked to force people as many people as it could off of loss-making mortgages. After the market crash in 2008, it became expensive for many banks to borrow. The banks hurt themselves a lot with bad lending practices before the market crash. Once the market did crash, many of the mortgages were actually costing the banks money.

Instead of taking the financial burden, many of the banks looked to be sneaky. They looked to push people off of the mortgages in questionable ways.  The Irish Times estimate that scandal costs have surpassed 1.5 billion Euro.

What is even more crazy is that financial services knew about the banks being suspect. Many people went to court and lost. However, it is believed that many of the banks had a voice on these committees.

PTSB and Springboard Mortgages were the first two banks caught in the scandal. It is estimated that 1,400 people had their loans mismanaged by both companies. Some …

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The 8 Types of Mortgages

Mortgages can be scary for first time buyers. It may help to understand the different types of mortgages when you apply for a mortgage. Here are the 8 most common types of mortgages:

Repayment Mortgage – This is the most typical mortgage. You pay back the principle you borrowed along with the interest applied in fixed (typically monthly) installments. Fixed Rate Mortgage – This means the interest rate that the bank gives you is fixed for a specified period of time. It is a safe mortgage because the monthly payments do not change over time. Standard Variable Rate (SVR) Mortgage – The rate is changed by the banks typically to reflect how the economy is doing. This rate typically follows the LIBOR or Federal Funds Rate set by the central banks. Interest-Only Mortgage – This mortgage pays off the interest before principle. After the interest is paid off, the borrower starts to pay off the principle amount he or she borrowed. Federal Housing Administration (FHA) Loan – These loans protect people who may not be able to pay back their …

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Falling House Prices in Dublin

According to the Irish Independent, housing prices in Dublin on average are decreasing by just over €1,000 per month. However, property prices in the rest of the state are continuing to rise slowly or remain constant.

Property prices have been determined to have decreased on average of €4,500 in the past quarter of the year. Since the beginning of 2019, property prices in Dublin have fallen by 2.2%. The price of an average home in Dublin is now down to €433,000.

Although the average cost of housing in the capital has decreased, Dublin remains one of the most expensive cities to live in Ireland. On average, properties in the capital cost two to four times more than property in the rest of Ireland. This data was reported from the Irish Independent and the Real Estate Alliance (REA) Average House.

South Dublin has seen the steepest decline in overall average home values. In three months, property prices of South Dublin have fallen by  €6,500. Although progress has been shown in the prices of homes in Dublin, prices are still rising in other counties. Prices of …

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The future is refinancing

Getting a loan can be extremely hard to achieve, especially in today’s Irish economy. With higher interest rates than usual, many people who have successfully gotten a loan may be looking for an opportunity to refinance in a few years to come.

Refinancing would not be beneficial for those people who are repaying loans. This is largely due to the banks uncertainty as the Brexit date draws closer. Banks are afraid that there will be an economic crash that will leave people with loans unable to pay the banks back at their projected rate. These fears are outwardly displayed in the form of high interest rates and low amounts of accepted loan applications.

The current interest rates rely heavily on the type of loan that you are receiving, but can vary significantly. The most common forms of loans are mortgage, auto, and personal. In any of these agreements, the interest rates are high in comparison to previous years.

Refinancing in the future may be key for many of the people who are currently being approved to take out …

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Money lending interest rates regulated

The Department of Finance is a crucial part of the government of the republic of Ireland. During the current year, the Financial Services Division of this sector is looking into the interest rates that government approved money lenders are charging their consumers.

According to the Central Bank of Moneylending and the Consumer Credit Act (1995), money lending is “the practice of providing credit to consumers on foot of a money lending agreement.” Usually, these credits are taken in the form of cash but can also be the purchase of goods on credit from a catalogue.

In general, money lenders make getting money quick and easy. They are especially beneficial for those with a higher chance of being denied the ability to take out loans due to bad credit history, low income or a variety of other financial reasons. Many people who are also uneducated or inexperienced in the financial sector may find themselves turning to this easy alternative.

These vendors are most beneficial to be used as a last resort option when you are in need of …

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Pension top-ups failing seniors, women

The most recent governmental review of pension top-ups has left many retired people with far less than they had anticipated. Only 15% of around 11,500 cases reviewed within the last period will be receiving top-ups, leaving 10,000 people who applied for a top-up without any other option than to survive off of their same plan, despite rising prices.

This denial of pension top-ups extends beyond this small percentage of retirees. Tens of thousands of people were affected by this bad review, causing the public to go into a frenzy. Understandably so, given that everyone who has a pension is retired and between the ages of 60 and 70. Most of these people have already worked for over 40 years and have planned and saved so that they no longer have to work in the elderly stage of their lives.

Usually, people begin saving for pensions at the age of 25, paying small amounts to their retirement fund that are sometimes matched to a degree by either their current employer or the government. These plans also usually have higher …

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Donhoe’s Investigation in Interest Cap on Loans

The Minister for Finance and Personal Expenditure and Reform, Paschal Donohoe, has begun investigating the idea of capping interest rates moneylenders can charge. The discussion of capping maximum interest rates has been brought up by the fact that moneylenders can charge insanely high percent annually on small loans. In other words, any licensed moneylender is able to set their own interest rate. There has been a recent push onto the Minister for Finance to create a interest cap on loans.

Why is the ability for licensed moneylenders to set their own interest rates an issue ? Interest rates determine the price at which individuals can borrow money. The higher the interest rate the more expensive it becomes to borrow money. The higher the cost of money the more difficult it becomes to borrow money and thus discourages investment. Ultimately, ability to set extremely high interest rates means borrowers will be paying a high price for money. The higher the interest rate set by a moneylender the higher the lenders profit will be.

In comparison most countries in the European Union …

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Ireland takes Second Place in Highest Interest Rates of the Euro Zone

Ireland has fallen behind Greece of having the highest interest rates in the euro zone. Irish interest rates are currently standing at 3.04%. The average interest rate of the euro zone is 1.79%. The 2 per cent difference presents many differences and issues in Ireland’s economy and more specifically the housing market.

High interest rates affects spending of both businesses and consumers. The cost of borrowing money increases while interest rates also rise. Often, the higher the interest rates leads to less spending, borrowing and investing by businesses and consumers.

 

Why are Irish interest rates among the highest in the euro zone?

Enforcing security on a mortgage is much prominent and more complex here than in other countries of the euro zone. In other countries, it is common to seize a property when individuals cannot pay off their mortgage debts. Thus, interest rates are so high here to ensure that banks will enough assets to minimize losses if something were to go wrong.

Lending has become less attractive because the uncertainty of returns on loans. Because repossessions …

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Irish Housing Market Full of Problems

Problems have been arising with mortgage interest rates in Ireland for quite some time now.  As there has been a worsened housing market and much conflict has arisen from it, the uncertainty of many different aspects have come to arise.

Many banks have had to make competitive advances in the market just to stay relative and appealing to their customers. The housing market has simply become a game in Ireland.

Without constant changing rates, their appeal would diminish, in turn, causing a fall in their overall customer base. A rapid decline in business would quickly be seen.

Most recently, Ulster Bank announced more drastic cuts to their interest rates that would, in turn, also affect their fixed rate mortgage offerings. This was done as a way to stay competitive as many other primary banks for lending have been recently seen as doing similar things.

The Irish housing market is offering customers some of the highest variable rates accessible across the eurozone. Ireland’s average variable rate stands at 3.37% while the rest of the eurozone has an average of just 1.8%. …

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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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