New mortgage trends – Will Irish lending turn American?

Today we received an email from Haven Mortgages about their updated interest rates, we were pleasantly surprised because for the first time in a long time there were some very attractive long fixed rates. Recently banks have had no choice other than to lash on margin in order to pay for the funds they were securing. The new 10 year fixed rate from Haven is 5.66% it is also the cheapest rate they offer.

What does this mean for a borrower? Well, on one hand we have Trichet saying that he doesn’t see inflation coming under control until 2010 and as the ECB’s only job is to control inflation it would therefore stand to reason that we won’t see a rate cut any time soon. Economists and commentators (myself included) have made some bad forecasts and for that reason I would be prone to feel that the rate outlook is uncertain, at best the current climate is guesswork. This means that a borrower would do well to buy some stability, a way of doing this …

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Financial Literacy: What is a Mortgage? How do mortgages work?

Financial Literacy posts are designed to be more than just a simple definition, they are aimed at putting financial concepts into easily understandable terms and to give an example or two to demonstrate the answers.

Today we ask: What is a Mortgage?

By definition a mortgage is pledging a property to a lender as security in return for a mortgage loan. While a mortgage is not an actual debt it is evidence of a debt and is the legal instrument used to transfer an interest in land from an owner to a lender on condition that it will be given back to the owner once the terms of the mortgage have been satisfied.

I am a big fan of pictures so we shall use a few to show what happens.

Let’s take the example of ‘Joe’ who wants to buy a house. He must save up a deposit as loans require ‘equity’ it gives the bank some security in the sense that it means the person is vested in the purchase (they stand to lose …

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