Posts

Good news for mortgage holders: ECB rate hike ‘years off’

/in /by

There is unlikely to be a rise in European Central Bank interest rates for the coming years, a development that will be a huge boost to thousands of mortgage holders.

Trackers are pegged to the ECB lending rate, and cannot be increased unless the ECB raises its main rate.

It could be three to four years before interest rates rise.

It is estimated that about 350,000 mortgage holders are now on tracker rates, with about 300,000 on variable rates.

Central Bank told to change lending rules

/in /by

Fianna Fail and Labour call for deposit cuts for first-time buyers struggling to get on ladder.

First-time buyers are being frozen out of the housing market due to high rents coupled with the massive mortgage down payments they are forced to save due to the Central Bank rules.

Young families hoping to trade-up are also being crippled by the lending conditions which mean they have to save a huge 20pc deposit on any home they hope to buy.

Fianna Fail is calling for the rate for first-time buyers to be slashed by a third if the house-buyer has a proven track record of paying rent for three years.

The party’s submission, which was prepared by Fianna Fail finance spokesman Michael McGrath, also calls for new laws which will force banks to take out insurance against losses arising from borrowers defaulting, or entering into a mortgage arrears resolution process.

The cost would be shared between the borrower and lender – the bank would add an interest rate to the loan to cover the insurance.

‘Flaws’ in system that denies homes flood insurance

/in /by

The Central Bank needs to carry out an investigation into how insurance companies decide homes are at risk of flooding, a new report has recommended.

A committee of TDs and senators has found evidence that insurance firms are using flood prediction maps to avoid providing cover for properties at the remotest risk.

The Oireachtas Committee on Environment found there are flaws in the geo-coding of areas for flood risk that prevent homeowners getting insurance.

Social Democrat TD Catherine Murphy said she knows of situations where houses on hills are refused cover because they are considered to be in a flood-risk area.

“Today there are people in the position that their homes were never flooded but they can’t get insurance,” she said.

“There is a big issue with the insurance company taking advantage of the flood mapping and actually avoiding even the remotest risk,” she added.

The committee’s 156-page report, entitled ‘Flooding and Property Insurance in Ireland’, comes in the wake of the devastation wreaked by Storm Desmond across the country last week.

The report says the flood insurance issue needs a “systematic investigation” by the Central Bank to determine its extent and advise on appropriate measures.Labour TD Michael McCarthy said: “It’s not logical and neither is it fair or moral that people in areas that aren’t affected by flooding can’t get insurance.

“If the evidence proves that insurance companies aren’t stepping up to the plate, then Government will have to resort to measures that will put that right.”

However, he said that the committee did not see fit to endorse a levy on all home insurance to subsidise cover for those in high-risk areas.

The committee heard from organisations representing those who have been excluded from flood cover, or who are at risk of being excluded, that their homes are no longer mortgage-able and the value of their homes plummets.

The report also recommends that the Government give consideration to a ban on future building on flood plains and in low-lying coastal areas.

Property prices still rising despite Central Bank’s lending curbs

/in /by

Property prices continue to rise at more than 1pc per month, despite the lending measures introduced by the Central Bank to cool the market.

Figures released by the Central Statistics Office (CSO) show national price hikes of 8.9pc year on year – and 1.3pc in September.

Meanwhile, in Dublin, residential prices rose by almost 1pc (0.9pc) – up 6.5pc on September last year.

The latest month’s data is comparable to the 1pc-plus increases during the boom years.

More worryingly, Dublin house prices (not including apartments), which the Central Bank measures were designed to cool, rose 1.1pc in September.

However, national residential prices are still now 34.6pc lower than at their peak level in 2007, while Dublin prices remain 33.7pc lower.

It has been noted that the increases, particularly in Dublin, were a sign that bank lending restrictions in the absence of supply increases were not working.

Savings overhaul for first time buyers.

/in /by

The Government wants to overhaul a tax relief scheme for first-time buyers which has been labelled a “flop” by Fianna Fáil.

First-time buyers can apply for a refund on the Deposit Interest Retention Tax (DIRT) levied on savings to build up a deposit to buy a home. The scheme was due to run until the end of 2017, but its take-up has been poor.

Figures released in July showed that fewer than 50 refunds were issued since the scheme was introduced.

Finance officials are examining ways to make the scheme more attractive, as concern grows about a lack of initiatives for first-time buyers.

“We need to make the scheme more appealing,” said a Government source.

Fianna Fáil finance spokesperson Michael McGrath said the low take-up shows the scheme does not work.

How you can avoid lender rip-offs

/in /by

The chances of getting a bad deal, or even being ripped off, are huge for both new buyers and those switching mortgage providers.

Here are some of the issues to consider, whether it is your first mortgage or you are opting for a new lender by moving your mortgage.

Be wary of cash deals.

Some banks are offering cash-back deals for new buyers and switchers.

This “cash-in-the-hand” offer is proving very attractive. It can represent up to €2,000 on every €100,000 borrowed.

But you will get lower mortgage rates from the likes of AIB, EBS and HAVEN. This means that typically after just eight years, you would be better off at one of these.

Fixed or variable

Many banks have refused to reduce their variable rates, despite demands from Finance Minister Michael Noonan. They have instead offered attractive fixed rates. But be aware that you are locked in with a fixed rate, for the period of the deal.

Some mortgage experts think variable rates may fall again.

Banks’ history of care

Before opting for a particular bank, ask yourself how good is that lender’s customer care.

Cost is not the only consideration. Standards of service are also important. Has the bank a history of overcharging, and how does it deal with those in mortgage difficulty?

Mortgage protection

Lenders will insist that you take out mortgage protection insurance, a type of life insurance policy that pays off your mortgage if you die before the end of the term.

Your lender will often offer to sell you a policy, but you don’t have to buy it from them and, indeed, it can be much cheaper to buy elsewhere. Talk to a mortgage broker who may be able to offer more choice.

Term of mortgage

The longer the term of your mortgage, the cheaper the monthly repayments will be. However, stretching out the term means you end up paying more in interest over the life of the loan.

Consider moving your current account

Both AIB and KBC offer interest rate discounts to new buyers and switchers prepared to pay for their mortgage through the banks’ current accounts. This could make these lenders worth considering.

How are existing mortgage holders being treated?

When taking out a mortgage with a bank, make sure that lender is passing on any rate reductions to existing customers.

KBC Current Mortgage Offers

/in /by

KBC  is offering attractive mortgage deals for customers who are looking to buy their first home, subsequent home, or those simply looking to switch for better value.

  • Rates from as low as 3.30% fixed and 3.25% variable when you open a KBC current account.
  • 50% off KBC Home Insurance for 1 year for new residential mortgages that draw down up to 31st December 2015.
  • Clients who wish to switch to KBC before 31st December 2015 get €2,000 towards legal fees.

Terms and conditions apply.

Contact us to discuss on 01-5052718.

 

 

Having children now comes before buying a home

/in /by

Having a baby now comes before owning a home for a new generation that has little choice but to rent until their mid-thirties. Increased barriers to acquiring a home have raised the average age of Ireland’s first-time buyer by four years to 33. In 2005, the average first-time buyer in Ireland was about 29, but according to Real Estate Alliance (REA), this figure is up and still rising.

The newly emerging trend is more and more Irish couples are now starting their families in rental accommodation- a social shift which goes against the longstanding Irish tradition of buying your home first.

A combination of circumstances have combined to make it extremely difficult for young people to buy:

  • New Central Bank rules pushing up the deposit that must be saved for a house;
  • Returning emigrants finding it difficult to secure mortgage approval without a full year’s employment behind them;
  • The increase in contract work, as opposed to a “job for life”, making it difficult to get a mortgage;
  • A change in attitudes following the property crash and unwillingness to buy the “wrong” home.

More mortgage holders switch bank but total moving still tiny

/in /by

New figures from the banks show that 240 people switched their mortgage from one lender to another in the April to June period.

This is up from 108 in the same period last year, according to the Banking and Payments Federation.

Goodbody Stockbrokers noted that switching is now at the highest level in four years, but it still only represents approximately 4pc of total lending volumes.

Founder of the Askabout.com website Brendan Burgess said it was likely homeowners were waiting to see if variable rates will fall further before making any moves to switch.

Property prices rise nationally but fall in capital

/in /by

The cost of buying a home has risen by more than 10pc year-on-year, but prices are falling in Dublin.

The Central Statistics Office (CSO) says residential property prices in the capital have dropped by 0.4pc in June, compared with a national increase of 0.1pc across the country.

And although house prices continue to increase, the rate of that rise has slowed down.It says that prices rose nationally by 0.1pc in the month of June, compared with 0.5pc in May and an increase of 2.9pc recorded in June of last year.

This is likely due to new rules introduced by the Central Bank in February which require first-time buyers to have saved 10pc of the property price, and second-time buyers at least 20pc, before they can secure a mortgage.

However, in Dublin, prices are falling, down 0.4pc last month. Despite this, prices are still 11.1pc higher than a year ago. The fall was more pronounced for apartments, which dropped 0.4pc, compared with 0.3pc for houses