The different types of interest rates available for mortgages

By regulation lenders must publish APR‘s as well as the interest rates on mortgages. APR’s take into account all of the costs associated with a mortgage including the set up charges, (the interest rate itself naturally in there too!) and ongoing fees etc.. As long as you are comparing loans over the same term the APR is an accurate gauge of considering one versus the other.

Within the industry we tend to focus on the ‘Cost per thousand’ which is the actual cost of a loan for every thousand borrowed. So we’ll take the following situation

Loan amount: €300,000 Interest rate: 4.8% APR: 5.0% Cost per 000′ 25yrs: €5.73

(normally cost per thousand or ‘cost per 000’ sheets are only held by people within the industry as its a sizeable matrix but if you want to ask a very knowledgeable sounding question inquire about the cost per thousand as it shows the actual end cost of one loan versus another)

Anyway, what would …

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Am I eligible for a mortgage? How do you know?

We are often asked by clients if they would be eligible for a mortgage, the questions tend to be ‘could I get a mortgage?’ and if so ‘what is the maximum mortgage I can get?’ or how they should ‘go about applying for a mortgage to see how much we can borrow’. All of these are valid concerns and in the current market there are several factors which favour buyers.

When we talk about property and mortgages we tend to avoid the use of the word ‘affordability’ and it is important to understand that affordability is banking talk for ‘how much debt can we put you in’. The way that affordability is calculated is by looking at rates and then looking at property prices, because prices have come down and rates are doing the same the ‘affordability’ has increased, however, it is the underlying price of property that we urge our clients to focus on because rates change and market cycle interpretation using things like affordability are impressive …

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