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Campaign wants 20,000 to switch mortgages

A massive campaign to get 20,000 variable-rate mortgage holders to switch to another provider is to be launched.

The One Big Switch group aims to do a deal with a bank for lower mortgage rates in return for delivering thousands of switchers to it.

The group has already negotiated deals with electricity providers and health insurers for those who sign up with it. It has a database of some 80,000 registered consumers.

There are around 370,000 people on variable rates in this country, with customers paying some of the highest interest rates in the eurozone.

It is estimated that switching to the best-value mortgage could see a family with a €250,000 home-loan saving around €1,500 a year.

“If 20,000 people are prepared to switch together it will unlock the buying power for a group discount,” Lachlan Harris of the One Big Switch campaign said.

Once the group has thousands of mortgage holders who register for the mortgage campaign, One Big Switch will then negotiate with the banks for an exclusive group discount.

Property prices still rising despite Central Bank’s lending curbs

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.

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.

Noonan refuses to demand mortgage rate cuts by banks

Finance Minister Michael Noonan has said he believes the country’s main banks will slash their high variable rates if their customer bases come under “threat” from new competitors.

Senior bank executives told Mr Noonan last week that they had put in place a series of “options” for borrowers, which would allow them to reduce their monthly payments.

These include fixed rates that are lower than variable rates.

Mr Noonan has urged mortgage holders to contact their banks and switch provider “if the offer is not satisfactory”.

But he is understood to have refused to request banks to slash their rates.

The minister is instead banking on the prospect of them doing so voluntarily as a result of increased competition.

“Competition is the best long-term way of reducing interest rates paid by Irish borrowers and ensuring that Irish banks offer a sustainable product range,” Mr Noonan said in response to a parliamentary question by Mayo Fine Gael deputy Michelle Mulherin.

How you can avoid lender rip-offs

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

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.

 

 

Plan to give landlords tax deal in return for rent freeze.

The Fr Peter McVerry Trust and Ibec’s Property Industry Ireland have joined forces to endorse a plan to allow landlords treat property tax payments as an expense – in return for giving tenants a rent break.

Landlords would “opt in” to the scheme. After two years, if the tenant produces a letter confirming that the rent did not increase, then the landlord would get the extra tax benefits.

Landlords that sign up for a two-year rent freeze would treat property tax as an expense, and get full mortgage relief when filing a tax return.Landlords can only claim 75pc of the interest they pay on a mortgage against their tax bill following a budgetary change during the economic downturn.

Having children now comes before buying a home

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

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.

Haven to further Reduce Mortgage Interest Rates

Haven Mortgages Ltd are delighted to announce advance notice of  further reductions to their suite of Owner Occupier Variable mortgage rates , effective 1st October 2015. Applying to the Standard Variable Rate  and Loan to Value rate products, these changes are a further demonstration of lenders delivering real value for  existing and future customers.

The standard variable rate will be reduced by 0.25% to 3.72%. LTV’s will also be cut by 0.25% . 80% LTV’s are currently 4.0% and will be 3.75% from 1st October.