How to get the lowest rate on your mortgage

When applying for a mortgage, you will notice that rates vary greatly. These rates determine on a number of things, including the length of your mortgage term, the size of your deposit, your credit score, and which lender you choose. With so many different mortgage lenders available to choose from, this can be a daunting process, especially for first time buyers. Securing the lowest rate is incredibly important, as it will make your monthly payments smaller, thus saving you money over the whole lifetime of the loan. Here are a few things to focus on during your application process to ensure you get the lowest rate possible.

Shop Around

You wouldn’t buy a car without driving a few first, or a mattress without laying down on more than one, right? In a similar way, if you want the best mortgage rate, you should shop around with different lenders. This process should entail researching different lenders and the products they have to offer, as every lender has different loan types, terms, and interest rates. You also should apply for more than …

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AIB to close branches due to pandemic in controversial decision

The covid-19 pandemic and its related lockdowns have had a number of effects on the financial landscape both in Ireland and worldwide. One of the biggest effects has been the shift to contactless payments and online banking. This trend was only increased due to lockdowns, as the bank’s physical locations were closed, leading to more customers accessing their money online or through the bank’s app.

On Tuesday, Allied Irish Banks (AIB) said that it had conducted a “detailed strategic review” to examine the changes in how customers interact with banks. In the review, the bank stated that “Following the unrelenting shift in customer preference for digital banking over the last number of years, AIB is announcing the amalgamation of 15 branches in locations across the country by December this year”. The vast majority of these 15 branches being closed are in urban and suburban locations in Dublin and Cork. Accounts in the closing branches will be moved to neighboring branches, and these closures will leave AIB with 170 remaining physical branches. About 100 AIB employees will be affected by this …

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How do mortgages work?

If you’re looking to buy a home, you’ve probably already realized that this is not like most transactions. The average house price in Dublin is €396,000, and unless you’re very wealthy, you probably don’t have anywhere that much in savings. Because you likely can’t afford an expense of this magnitude out of your own pocket, you will need to finance the purchase through a mortgage, and if you’re new to the home-buying process, you may be a little confused as to how exactly these loans work.

A mortgage is a huge loan secured against the value of your house. A “secured” loan means that the borrower promises collateral to the lender in the event that they are unable to make payments, and in this case, the collateral is your home. In other words, the bank will kick you out and take possession of your house if you can’t make payments. In order to prevent this from happening, the lender will typically conduct a detailed review of the borrower’s finances in order to determine how much they can reasonably afford to …

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How has remote working affected rent prices in Ireland?

Because of the pandemic, so many people across Ireland have transitioned to remote work. While reopening is underway, it will still be some time before the majority of the workforce is back in their offices. During the pandemic, many people who lived and worked in major cities like Dublin found themselves returning to their home counties due to the opportunity to work from home. The Residential Tenancies Board (RTB) has found that a trend may be beginning with this movement of people away from urban centers due to covid-19.

Rents have increased across the State in the first three months of 2021 when compared to that same time period from last year. But perhaps as a reflection of people’s shift to remote work, rents have seen their sharpest increases outside of Dublin. During the first three months of the year, rents as a whole have seen a rise of 4.5 percent compared to the first quarter of last year. The nationwide average rent in euros for this quarter comes out to be €1,320, an increase of €33 when compared with …

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What is an Equity Release and how does it work?

Your equity in your home is how much you own. Think of it as the amount of your mortgage that you have already paid off, or the difference between your home’s market value and what you still owe the lender. So, once you have paid off your mortgage completely, you have 100% equity: you own it entirely. But as the value of your home appreciates, there is no immediate benefit to you in terms of cash. You will not be able to profit from the increase in value until you sell your property, and if you never sell, your estate and beneficiaries will be the only ones who are better off.

An equity release mortgage offers a way around this. These mortgages are becoming increasingly popular for homeowners aged 55 and older, as they give you a way to benefit from the equity you have built up in your home. An equity release involves a lender giving you a portion of the value of your home as a lump sum or a series of payments, in exchange for interest or …

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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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COVID-19’s biggest effect on the Irish financial world

There is no doubt that the covid-19 pandemic has changed the financial landscape as we know it.

The pandemic has increased online shopping by great amounts, has changed the way individuals invest in the stock market, and has lead to many central banks around the world printing large sums of money in order to pay unemployment benefits and provide essential aid to businesses both small and large. Investors have began to hedge against growing inflation of currencies around the world by investing in Bitcoin and other cryptocurrencies, sending them to sky-high prices.

But perhaps covid-19’s biggest – and surely its most noticeable –  effect has been a massive increase in contactless payments. Use of cash was already on the decline, but business closures and other covid restrictions, as well as new development in the fintech sector, have seen card and mobile payments soar to record highs.

Contactless payments such as Apple Pay and Google Pay, as well as the new chip and tap-to-pay features included on most debit cards, are fast, easy and sanitary. And let’s face it, it’s much more …

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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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Advantages and Disadvantages of a long-term mortgage

In a major market innovation in the Irish Mortgage Market, Finance Ireland and Avant Money have introduced new long term mortgages. While longer term mortgages have never really took off in Ireland, they are very popular in other parts of Europe and worldwide. These mortgages can be attractive to borrowers for a number of reasons, but it is important to also consider the potential downsides before making the switch.

Pros

One of the biggest advantages provided by long term mortgage products is certainty. Unlike a two or three year fixed term, a 10 or 20 year mortgage will allow your monthly mortgage repayments to remain unchanged throughout the duration of the loan. This reliable and predictable payment can be very helpful when planning out your monthly and yearly personal finances. It also can be very helpful in determining what your home will cost after factoring in interest. With a long term fixed rate, you will be able to know exactly how much the home will cost you right away, while a shorter term fixed rate will change over the lifetime …

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How you can be approved for a mortgage in Ireland despite Central Bank’s rules

It’s no secret that house prices are continuing to rise in Ireland. Because of this, it is more important now than ever to maximize the amount that you are allowed to borrow. The Central Bank’s rules often do not make this process any easier, as many have criticized the Central Bank on its restrictive rules in terms of how much people are allowed to borrow. To be approved for a mortgage in Ireland, you first have to fall within the Central Bank’s income rules. Second, your lender will evaluate your repayment capacity.

First, the Central Bank restricts lenders to loans of 3.5 times the borrowers’ income (joint and single), unless they are granted an exemption. This means that someone making €40,000 can borrow up to €140,000, and a couple making €100,000 combined can borrow up to €350,000, respectively.  However, to be approved for a mortgage, they must also pass a stress test, per Central Bank rules. This tests the ability of the borrower to repay the loan each month should interest rates rise by 2 percent above what the lender …

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