New Green mortgage offering one of Ireland’s lowest rates

AIB’s mortgage subsidiary Haven has launched a new, four-year, fixed rate green mortgage with one of the lowest rates currently available on the market.

Haven is a wholly-owned subsidiary of AIB which focuses solely on mortgage distribution through brokers. They offer a broad selection of fixed and variable rate mortgages to customers including first time buyers, movers, switchers, and investors.

The mortgage has a rate of 2.15 percent, and applies to both new and existing customers with a Building Energy Rating (BER) of between A1 and B3. The BER cert must also be less than 10 years old in order to be eligible. All new builds are expected to qualify for the low rate, and existing customers who remodel their home to meet the BER requirements will also qualify.

According to AIB, this low rate could result in substantial savings for the average customer. The lender reports that the new rate allows customers of a 25 year, €300,000 mortgage to save €155 monthly. This equates to a savings of €1,800 per year over the lifetime of the loan, when compared …

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Central Bank accused of unjust regulations on credit unions

Credit union chief executives have recently criticized the Central Bank’s regulations on the sector, calling them “excessive and unjustified”. After conducting research, a group of CEOs from credit unions across Ireland, chaired by Queen’s University Belfast professor Donal McKillop, have claimed that under the Central Bank’s current regulations, Irish credit unions are forced to set aside unjustifiably high levels of their capital into reserves, much higher than that of Irish and European banks.

Under the Central Bank’s current rules, credit unions must set aside a minimum of 10 percent of their total assets in reserves. This means that when a credit union member saves €100 with a credit union, the credit union must then put €10 in its reserves, if a member saves €1000, the credit union must put €100 in reserves, and so on. In its research paper, the Credit Union CEO Forum deemed these rates “excessive” and many credit unions have put limits on amount of savings they will accept from members, with some capping savings at just €10,000.

The CEO Forum’s paper states that these reserve capital …

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Costs you Should be Aware of before Buying a House

There are more costs associated with buying your first home than just the 10% deposit. There are many additional fees, duties and taxes that you should be aware of before buying your home. 

 

The first fee you should be aware of is the stamp duty. The stamp duty is not included in your mortgage, so it’s a good idea to save this fee up in addition to your 10% deposit. The stamp duty is calculated at 1% of the selling price on a home or residential property of up to €1m, and 2% of the selling price on homes and residential properties above €1m. This stamp duty may change however, and full details are available on the Revenue.ie website. 

Legal fees are another hidden cost of buying a home that you should look out for. There are a lot of legal aspects that have to be accounted for when officially transferring ownership of the property to you, so you should find a trusted real estate lawyer to take care of this transfer. Legal fees will vary depending on …

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Banks or brokers? Which to choose when applying for a mortgage

In applying for a mortgage, there is always the question of whether to go directly to a bank or to go through a broker. There could be advantages and drawbacks to either approach; the former could be faster and/or less expensive, but brokers can provide valuable assistance before and during the application process that make them a viable alternative. Ultimately, which of the two is the better option is based on the individual, and they should consider personal knowledge, experience, and preference when applying.

Firstly, going straight to a bank allows one to avoid paying a broker’s fee. Additionally, there may be an added level of trust associated with conducting negotiations directly. Assuming one has a high credit score, healthy income, and otherwise checks all of the boxes banks are looking for, it could prove to be faster than going through a broker. However, failing to do so might lead to one’s application being rejected out of hand. If an applicant is aware of such complicating factors, they should consider going to a broker instead.

If an applicant isn’t aware …

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How will the rising of State Pension Liabilities affect you?

Recently, state pension liabilities have been on the rise at around 10% annually, according to a recent studying involving Ireland’s pensions, it claims that pension schemes across Ireland have over €600 billion worth of liabilities. The study analyzes are many Irish households were privately owned by employers and the government, finding that the State pension accounts for almost 60% of all liabilities. Within that, the public sector pensions account for nearly a quarter while the private sector pensions are around 16%.

Overall, the pension liabilities within Ireland has increased by 7%, however, there are still differences in the positions of such schemes. The liabilities of private sector schemes has increased at just over 1%, while the public sector schemes have almost increased by 10% for state pension liabilities. One of the biggest issues is the sustainability of the current State pension scheme and whether the age requirement on the scheme will rise to 67 as previously planned, and then to 68 in 2028.

The study in 2018 shows that Ireland’s total pension liability at that time was equal to 186% …

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AIB conforms to Industry Standards in drawing a mortgage

The AIB has implemented regulations that have started to severely lower the time that it allows potential home buyers to look from a new home. This time frame went from 12 months to half of that. The reasoning the AIB has given for this is that it increases the approval in principle.

Two weeks ago, on January 15th, AIB made up of around 33% of the mortgage market. The bank announced that it will no longer allow the individuals who received mortgage approval 12 months ago to draw down their loans. These individuals will instead have to do so within 6 months, which is the normal time frame for most other banks within the market. The change is said to only apply to new applicants and that if you were an individual that applied in the 12-month period before January 15th of this year, the 12-month period will still apply to you.

AIB has previously one of the only banks to offer an extended amount of time for consumers to draw down a mortgage, which was one of its largest …

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Is Renting really a bad thing?

Should you rent or should own it? This may be a controversial topic but let us clear up the misunderstandings and go over the facts.

Some may think, “Isn’t renting just throwing money away in the trash while buying a home you are putting it towards something you will own in the future?” Yes, it is but not for a long time. Many individuals pay their mortgages from 5 years upwards to 20 years or more! The first 5 to 10 months of mortgage mostly interest, meaning you are still throwing that money out the window as well. If you are tight on money already, attempting to own your first home might not be the right time for you. It may be great for some, but it could be a potential burden for others.

Although homes generally appreciate there is always a risk of depreciation due to external factors, like companies moving out of the city causing many residents to move away. If the house …

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Banks in Ireland Expecting to Slow in Recovery

According to a new study done by stockbroking firm Davy, Ireland’s banks can expect to see a slowing in recovery and business activity within the first quarter as the government extends the current lockdown that is Level 5 until foreseeable, March 5th. Even though recently, large banks such as AIB and the Bank of Ireland has reported that in the last quarter of 2020, the lending and other business activities have recovered more than projected from the slump at the start of the quarantine. Still, Davy’s analysts report that they do not expect lenders to book material additional to loan-loss provisions after last year as many of the consumers are looking at these on a case-by-case basis.

The extension of the lockdown and corresponding restrictions are likely to impact the recovery seen in Q3 and Q4 of 20-20, and will likely hit Q1 of 2021, which is seasonally the weakest quarter for new lending in Ireland. House buying will probably require a conservative approach from businesses to limit risk in the new market of loosening restrictions. Individual buyers and businesses …

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The Rich Becoming Richer

In the past year, the term “the rich get richer” has been remarkably accurate. We have seen the top 10 richest individual’s personal wealth increase tremendously and even witnessed Elon Musk become the richest person on earth, passing Warren Buffet on the way. This trend has not been exempted from Ireland’s billionaires. Of the 9 billionaires in Ireland, they have seen their collective wealth increase by €3.28 billion in 2020, despite going through the deepest global recession this decade. And to put that into perspective, 1/10 of that additional wealth would be able to pay for the COVID vaccine to be available to every citizen in Ireland.

Internationally, we are beginning to see a larger divide between the rich and everyone else. This move towards greater inequality has only been highlighted during the pandemic. It is said that the worlds’ one thousand richest people were able to recover from their financial losses due to COVID within nine months, while it will take more than a decade for the world’s poorest countries to do the same. And since the majority of …

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International Tariffs Affecting Ireland Marketplaces

With the switch of the presidency in the US, international trade laws are set to change. The most recent being the increased tariff on import of bread products in Brexit and increased costs. These taxes on flour imports are predicted to raise the price of bread in the area by as much as 9%.

The IBEC group has spoken out about concerns in the food and drink sector, speaking to the impact of these new regulations and the origin of said laws. Vital points they bring up include how the deal in the EU-UK Trade and Cooperation Agreement (TCA) that included this rising tariff for flour products will require a derogation for the Irish bakery sector in order to help with these tariffs. When tariffs like these occur, many buyers typically stockpile products to avoid the extra costs, but the shelf life of flour is generally low, lasting around 2 weeks. Meaning that any price fluctuations and their effects on the market will be seen in a very short amount of time.

The impact of the tariff is likely to …

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