The demise of 100% Mortgages

Mortgages in Ireland continue to evolve, with 100% mortgages in Ireland now a thing of the past. We saw the 100% mortgage products die off here in 2008 because of falling asset prices, the credit crunch and liquidity problems banks are having. Assuming a mortgage will always be less than the value of a property is a misconception and for that reason many people are finding themselves in negative equity.

However, that isn’t the end of the world, if you are in negative equity the loss is ‘real’ but not ‘realised’ unless you sell up at a loss. This is perhaps not a cure but it gives some perspective to dealing with the situation. Our firm have been brokers in Dublin for quite some time, and combined we have over 100 years of experience in helping our clients get the cheapest mortgage rates and to make financial plans, however, in the current environment more than ever we are finding that broker advice is vital because there is literally so much at stake for peoples finances. Property is taking a hit, …

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Euribor, the distant cousin of the ECB base rate

We have written in the past about tracker mortgages becoming an endangered species. It seems that now we are witnessing the demise of them, the interbank rates and the ECB have become so disparate to each other that one is no longer an accurate gauge of the other. What does that mean?

The ECB is the rate set by the European Central Bank, and it is the ‘base rate’ (currently 4.25%), but banks can’t generally borrow at that price and instead they buy on the ‘interbank‘ market, this is the largest market in the world in which over 1.9 Trillion is traded every single day! It is how banks access the ‘Euribor‘ market (European interbank offered rate). This is basically run as an auction and because liquidity is an issue we have seen the prices of the Euribor rise and rise, demand is outstripping supply.

Why is the Euribor rising? Simply put, fractional banking means that banks must have a constant inflow of money …

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Mortgage Companies in Ireland

In Ireland there are several methods of getting a mortgage, you can do it directly with a lender, or via an Intermediary (which is what Irish Mortgage Brokers are). Both lenders and Intermediaries are regulated by the Financial Regulator and they are the ones who set policies and regulations that all financial companies must adhere to.

If you need a mortgage ‘do some research’ would be the first piece of advice anybody should give you. There is nothing that can replace doing your own research, for such a massive undertaking as most mortgages are – the vast majority will make up more than 20% of your net income for quite some time – it is tantamount to irresponsible if you don’t try to familiarise yourself with the process and what it involves.

After that you need to work with a firm that you are happy with, sometimes you might know a person in the industry or maybe you will pick a company out of the Golden Pages but in any case make sure that you are satisfied the person you …

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