Property prices may fall, but finance prices won’t

Unless you are a cash buyer it isn’t a good idea to focus on property as a single cost, in a transaction there are two costs, that of the asset and then that of the finance for the asset purchase. I have done a few comparisons on costs where in two years time where a property has fallen a further 20% from where it is today.

As we expect margins on lending to rise considerably we have factored that in, along with moderate base rate increases. What we have done here is to take a view that prices may have fallen 40% from the peak to now, but they will fall a further 10% p.a. for the next two years, a further 20% from today or over 50% from the peak.

Purchase in 2010 €200,000 90% mortgage over 25yrs [€180,000] @ 4.5% [10yr fixed] base rate 1% margin c.3.5% repayment per month: €1,000 total cost: €300,000 balance after yr. 10: €130,785 Total Interest Paid by year 10: €70,845 …

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Mortgage questions: broker fees

Q: I am a first time buyer and am hoping to purchase a property this year with my partner who is also a first time buyer. I was just enquiring what are your fees for your service and what does the process involve?

A: Generally we don’t charge fees. We are paid commission by the Mortgage Lender and Insurance Company you choose to proceed with. We will advise you what each Lender and Insurer has to offer and try to secure the deal that suits your needs.

When you have chosen a suitable property we will take you through the process from putting down your booking deposit through to getting the keys to your new home.

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