Mystery shop shows good mortgage offers … ngnews.htm

A ‘mystery shopping’ exercise conducted with a number of Irish banks and building societies revealed that mortgage offers have improved more than expected.

However, the authors of the study, Davy, warn, there is a big difference between offers and actual drawdown of a loan with anecdotal evidence pointing to continued scarcity of mortgage cash.

****It found that the average mortgage offer for a single applicant as a multiple of disposable income increased to 7.8 times salary from 7 times last summer.

The offer for a couple increased to 6.5x from 6.3x.****These increases have been facilitated by an improvement in affordability, Davy noted.

Interest repayments as a percentage of disposable income have fallen to 28pc for a single applicant and 25pc for a couple (down from 43pc and 36pc respectively) based on average rates.

However, more lenders now actively discriminate against apartments, with lower loan-to-value (LTV) ratios of 75-80pc. In addition, rent-a-room and parental guarantors have largely disappeared, it said.

Banks’ application processes have also become more detailed, with a greater focus on the apartment’s location and the customer’s job and nationality.

“Our exercise indicates a distinct two-tier market. One tier has offerings as low as 2.35pc for one-year fixed or 2.6pc for variable and LTVs of 92pc; the other tier is less competitive with rates as high as 4.45pc for variable and LTVs of 80pc,” said Davy

That’s a confusing sentence, is it 7.8 x disposable income or 7.8 x salary. I can’t believe it could possibly be the latter.

It’s probably the latter. They’ll never learn. They won’t be satisfied until they bankrupt Ireland, Inc. Ably assisted by FF.

Here is the summary from the actual Davy’s document

looks like the have inexplicably added the word “salary” to the phrase from the report

even then, without knowing the figures for “disposable income” the report is fluff.
is it just take home pay, or are they excluding cost-of-living expenses?

So by those multiplies, a couple both on the dole could get a mortgage for €140000, says it all really XX

So they are using the Government guarantee to commit to some reckless lending :angry: :cry:

It appears to me that the loopholes have been closed(parental guarantor etc) but not the lending multiples. Where is the retrenchment in lending with these banks? :unamused:

Dude, none of the mystery shoppers drew down a mortgage . Approval and Drawdown are two completely separate concepts nowadays whereas one almost inevitably followed the other 3 years ago .

From Goodbody