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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Cryptocurrency: Market trend or the future of Finance?

Over the past year you have probably heard a lot of buzz surrounding the world of cryptocurrency. Cryptocurrency is essentially a form of payment that can be exchanged online for goods and services. Cryptocurrencies operate using a technology called blockchain, which is a decentralized form of recording and managing transactions that is spread across many computers. One of the main advantages of using blockchain to manage cryptocurrency transactions is to increase security of these transactions. Cryptocurrencies are also increasingly being used as a speculative investment in addition to purchasing goods and services. While over 10,000 cryptocurrencies are traded publicly, the most valuable and most famous is Bitcoin. Bitcoin first rose to prominence in December 2017 when its value skyrocketed to almost $20,000, before falling down to $3200 just a year later. This extreme price volatility among bitcoin and other cryptocurrency has prompted debate among investors and analysts over whether bitcoin is a legitimate currency and the future of finance as we know it, or just another speculative investment.

Critics of bitcoin and other cryptocurrencies point to its volatility and extreme …

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Which Industries were winners and losers during the pandemic?

Due to the Covid 19 pandemic and corresponding lockdowns in Ireland, industries such as retail, hospitality, and beauty and grooming were closed for much of the year. However, as is usually the case, when some industries are struggling, others are thriving. In this article we will take a look at some of the industries that have been successful despite the challenges that the pandemic brought on, and some that have not been so lucky.

Winners:

Supermarkets

Many supermarkets in Ireland benefited from stay at home orders, as most pubs and restaurants were closed, leading to an increase in at-home cooking for the average person. One of these supermarkets was British grocer Tesco- who reported an increase of  £388 million in sales in Ireland last year, or more than  £1 million per day. The grocer remained open during lockdown orders, and maximised sales across all lines of products, from alcohol and ready-made meals to clothing and household products. 

Tech

The pandemic also saw large growth in the tech sector, as many industries transitioned to part or full-time online work. One such …

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Central Bank warns of New Home shortage

House prices have been surging in Ireland lately, and the new home market has been hit especially hard. The rise in house prices has been caused by a number of factors, and significantly accelerated due to the economic strains of the Covid-19 pandemic. Two recent reports from property websites myhome.ie and daft.ie have suggested that home prices are currently inflating at a 13 percent annual rate. Now, the Central Bank has warned that the pandemic will have a significant affect on the housing supply for the foreseeable future. The Central Bank projects that approximately 25,000 fewer new homes will be built between 2020 and 2023 when compared to pre-pandemic projections.

Among the many factors already driving an increase in pricing has been pent up savings. Consumers have had significantly less things to spend money on since March of last year, especially during those times when the country was under level 5 lockdowns-the strictest possible measure. People have not been able to shop at non-essential retail stores, eat or drink at their favorite pubs, or commute to work, leading to a …

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What is the Help to Buy Incentive?

The Help to Buy incentive is a program from the Irish Government that provides relief to first time buyers of a new home or apartment. The amount of relief granted through this incentive was recently increased due to economic pressures brought on by the Covid 19 pandemic. In the July 2020 Jobs stimulus package, the Government increased the amount of relief available temporarily through 31 December 2020. With the passing of Budget 2021, this increased relief has been extended to 31 December 2021. The incentive gives a refund of income tax and Deposit Interest Retention tax (DIRT) paid in Ireland over the previous 4 years to qualifying first time buyers.

Help to Buy only applies to properties worth less than €500,000, and the home or apartment must be new or self built. To qualify for Help to Buy, you must be a first time buyer who either buys or self-builds a new residential property between 19 July 2016 and 31 December 2021. However, the Help to Buy scheme does not apply to rental or investment properties. The scheme is limited …

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5 Mortgage tips for first time buyers in Ireland

If you’re buying your first home in Ireland, chances are you will need to finance it using a mortgage. Getting a mortgage is a very big commitment, and may seem overwhelming, especially considering that if you miss too many payments, the bank may foreclose your home. However, mortgage approval rates for first time buyers are on the rise, and if you’re feeling uneasy, here are 5 tips to make the process a little less scary.

1. Budget and save effectively

You won’t get a mortgage without having a deposit ready, so it is important for prospective homeowners to open a savings account and start budgeting for their deposit. The lender will be looking to determine your ‘repayment capacity’, assessing your current expenses and financial situation. Mainly, they will be looking to see that the amount you save each month is greater than or equal to your mortgage costs. Be sure to limit overdraft fees and excessive spending, particularly gambling-related expenses, on your bank statements, as this will look bad to lenders.

2. Have a good credit rating

It is essential …

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