Mortgage Rates Ireland

ICS Building Society has refunded 1,500 customers after overcharging them for their mortgages.

ICS, which is a subsidiary of Bank of Ireland, was supposed to apply a discount of 1pc to the mortgage when it was drawn down, but ended up applying a smaller discount. It is understood 1,500 customers are getting refunds, with an average €300 being paid out.

The bank said: “We identified a number of customers where the interest rate margin quoted on letters of offer was different from the interest rate margin applied to the mortgage account on drawdown, as a result of rate changes in the intervening period. The average refund is €300.”

Some of the recent house price figures for Ireland released at the end of 2012 seem to show a recovery . Some Irish newspapers are even saying that buyers have already too late !

The Irish Independent says that the recovery in the housing market has been “under way for quite some time.” “Property prices in some parts of Dublin, where the crash started in the summer of 2006, have been rising since at least the middle of the year and perhaps even since January, when a shortage of family-sized homes began to make itself apparent.”

The new Property Tax will begin in July - with a minimum charge of €90 Euro a year - which will be less than the current €100 Household Charge for some people who own a house worth less than €100,000 . This is unlikely to put off house buyers very much.
The mortgage tax relief is no longer available in 2013 - and this will have more of a financial impact on first time buyers. It will increase mortgage repayments by about €150 a month on a €180k mortgage for first time buyers.
The rush to buy at the end of 2012 probably helped push prices higher in November - but early 2013 will probably see a drop in prices as the effect of the removal of TRS kicks in.

For anyone thinking of buying in 2013 - you can find the Latest Mortgage Rates here.
Also see a list of the monthly repayments you can expect here.

Minister for Finance Michael Noonan has backed the Revenue Commissioners’ move to withdraw mortgage interest relief for people with arrears of six months . Also kown as TRS

He admitted that withdrawal of the tax relief would have to be dealt with on a case-by-case basis. Mortgage interest relief can be worth as much as €4,000 a year for a couple.
He said that “If a repayment on a mortgage is not being made this means that interest is not being paid so relief cannot be applied.”

“Lenders are required to report cases where payments have not been made for a six-month period to allow Revenue determine continued eligibility for the relief on an individual basis. In the event of the resumption of payment, the relief can be restored following three consecutive payments.”

Revenue said that where payments have failed to be made for six months, relief would cease.

About 350,000 households in the country are in receipt of tax relief, which goes to the mortgage lender and is then deducted from payments by borrowers.

The ECB interest rate is still at 0.75% - which is a record low rate.

There are signs that a reduction down to 0.5% could happen in the next few months.

The eurozone economy shows little sign of recovering before the year-end despite easing financial market conditions.

A majority of analysts in a Reuters poll expected the ECB to reduce rates in the coming months.

There has been a 24% increase in the number of new mortgages issued in Ireland in the third quarter of 2102 (figures from Irish Banking Federation.)
That is a 10.4% increase compared to Q3 2011 and is the first year-on-year increase in new mortgages since 2006.

Almost 4,000 new mortgages were issued during the period, valued at €663m, bringing to almost 10,000 the total number of new mortgages issued during 2012 to date.

PTSB were offering a 5 year fixed rate mortgage at 3.1% if you had an LTV of 50% or less.
This week they have pulled that rate and the lowest fixed rate they are now offering is 4.61% over 2 years .

See the Current Irish Mortgage Rates Compared Here

Payment Protection Insurance or PPI as it is known - was sold alongside mortgages in Ireland . Many people were sold PPI who did not need it or who were not eligible to claim on it.
In the UK the mis-selling of PPI was carried out on a large scale - and billions of pounds have been refunded to customers. Here in Ireland the PPI scandal is starting to become apparent - and the Central Bank have asked 7 of the main banks to review all PPI sales from August 2007 onwards.

Thousands of people in Ireland will have been sold PPI when it wasn’t really required . Read much more about PPI Refunds in Ireland over at MoneyGuideIreland.com

Table showing monthly Mortgage Repayments at various percentages over 20, 25 and 30 years . Figures are for a 100,00 mortgage (capital and interest) .

Compare Mortgage Rates in Ireland Here

A report on the Irish mortgage market from rating agency Moody’s was published this month . The research includes the first county-by-county breakdown of mortgage arrears since the economic crisis began in 2008.

According to Moody’s - the mortgage crisis will peak next year with one in five home loans in default. They predict that debt write-offs for homeowners are the only way to eventually fix the market.

Moody’s says some homeowners have started to refuse to pay their mortgages because of negative equity — where a house is now worth less than what it was bought for.

It appears that borrowers may now be less likely to keep up with their mortgage payments, knowing that the new personal insolvency rules come into force next year — because they explicitly allow for debt write-offs.

Moody’s looked at €66bn of residential mortgages - including mortgages arranged by First Active, Ulster Bank, EBS, Permanent TSB, ICS Building Society/BoI, KBC and Bank of Scotland.

They found that people whose mortgage debts are greater than the value of their homes are the most likely to be in arrears. They are twice as likely to default.

Self-employed people are twice as likely to fall into arrears, and the midlands and border counties are worst hit by crisis.

Bank Of Ireland are going to increase their standard-variable and LTV mortgage rates for new existing customers in October

An increase of 0.5pc will affect around 60,000 BOI customers .
A person with a €200,000 mortgage will see repayments rise by about €60 a month.

AIB already announced a similar increase which comes into effect from Septemmber 2012 i

The Bank of Ireland standard-variable rate will be 4.3% for existing mortgage holders from October 5th 2012.
As recently as July, Bank of Ireland increased their lending rates for new residential-mortgage borrowers by 0.25%

The rises are happening despite the ECB cutting rates twice this year.

See where to get the Best Mortgage Rates in Ireland Here

AIB mortgage customers will see the rate on their SVR (Standard Variable Rate ) mortgages increase from 3 per cent to 3.5 per cent in September. Rates for investors will jump from 3.95 per cent to 4.45 per cent.
This is after last weeks drop in the ECB rate of 0.25% .

The rate increase applies to new and existing customers. Tracker mortgages will not be affected by the AIB increase.

AIB said that following this increase AIB will continue to have the lowest SVR in the Irish domestic market.

See the Lowest Mortgage Rates here

Homeowners need all the extra money they can get - so don’t just carry on paying out home insurance to the same company every year. Irish homeowners could save hundreds of euro by switching home insurance providers.
A recent survey that compared premiums on various houses with several insurance companies in Ireland.
In the worst case - the difference between the cheapest quote and the most expensive was €864 Euro - the house had no smoke alarm. Chartis Direct quoted €1147 - while FBD wanted €283 for the same property.

LLoyds (via Getcover.com) were the cheapest in 3 out of the 7 sampled.
FBD , Zurich , Allianz and Liberty onnly came out the cheapest once each (out of 7 quotes)

Chartis Direct came out as the most expensive in 5 out of the 7 quotes.