The cost of a mortgage

I know we like to bounce around numbers on the Pin. 795k too much, 550k would be value - another 100k should see it gone etc. etc.

Ulster Bank Increase Variable Rates:
The rate change, from 4.35pc to 4.95pc, is being communicated directly to customers and will also be advertised in national press. The increase means that customers with a E100,000 mortgage over 20 years will see their monthly payments increase by over E30, from E624.58 to E657.20.

So, a 20 year mortgage (sensible term for a 30 something) it now €657.20 per 100k.

If you want to buy that dream 600k semi in need of refurbishment and have 100k cash you will have to fork out €3,286 per month, for 20 years.

WE ARE STILL IN DENIAL. Houses are not affordable in most of Dublin. Even at these rates a 250k apartment with a 50k deposit is €1,314 per month, every month.

Once the current crop of cash buyers are gone it could be cliff edge stuff.

A mortgage is for life, not just for pimping.

:smiley:

Minor quibble, but it’d be €3,286 per month, for 20 years.

Or you could go to AIB and get a mortgage with a variable rate of 3.54%
Cost of 100k over 20 years = €578
Cost of 100k over 25 years = €499
Cost of 100k over 30 years = €447

Bankrupt and not lending. Would you trust a variable rate from them?

Noted :slight_smile:

Shouldn’t that read 'cost, per month, of 100k over x years

What I always find somewhat amusing is that the bankc never, ever quote the cost of credit, i.e. how much interest is actually payable on the loan over the term. They conveniently get away with quoting annual interest rates and monthly figures. Most people would be shocked if they knew how much interest they were actually paying on the principle.

So I guess the question now is , when will all these cash hip buyers be soaked up so that the correct pricing will be accepted by the market ?

I totally agree that property is still unaffordable. The drop in prices since 2008 have been reversed in real terms by the increase in interest rates. Add to this the banks inability and unwillingness to lend , job insecurity , lower pay , higher taxes and you have what we see at present…complete stagnation. Buyers are on the sideline wanting to buy and sellers continue to advertise and never the 2 shall meet :unamused:

Had a chat with my local UB mortgage guy yesterday- as I have three kids and sole income- I would need to be earning €65,000 before I get a mortgage- which is fine, but as I work in Sales they will not take ANY commission in to account- even with 6 months wage slips with regular commission on each one- the BASIC salary has to be €65,000

Their calculations are disposable income of €1950 after all debts (incl mortgage payments) are serviced and €250 per dependant per month.

Now, why didnt somebpdy think of that in 2003!!

They actually did think of this in 2003. Halifax turned us down for a mortgage because we had kids under their ‘responsible lending’ criteria. I saw for myself, as soon as the guy entered the ‘2’ into the No. of Children box, the computer said NO. The likes of Halifax concentrated its business nearly entirely on the FTB I would imagine.
As far as I know both AIB and BOI don’t take numbers of children into consideration when approving mortgages so you may have better luck there.

They both do now

Anyway- not the worst thing that can happen thing turned down for a mortgage at the minute

  • er Mr. Bank Manager as its 2006 can I have a loan of E500k to buy a house
  • ah sure… that will be total cost of circa E930k and you can pay E2,200 every month for the next 35 years… ah but don’t worry if you will be 70 by the time it is fully paid as the country is about to blow up and we will all be working until at least that age…
  • er No Thanks…

Yeah, it must be a real bitch having to sit on the sideline watching house prices collapse and able to do nuthing about it.

Morgan Kelly is really like a prophet at this point, isn’t he?!

I think it’s the fact that they haven’t collapsed is the bitch :laughing:

This is from www.mortgages.ie

“1.Minimum Income levels
In practice it is very difficult to arrange a mortgage where income is below the following levels :
Single applicant €30k
Joint Application €45k
This is not set in stone but we find that lenders will not favourably consider applications with income below these levels unless there are significant savings and a low mortgage requirement.”

I wouldn’t take that site as gospel. Their calculator seems to think huge income multiples are still in vogue.

Have they collapsed or not?! Is this collapse or is this just a major tumble before the ultimate fall. Are we heading for Geronimo country or is this the bottom… If NAMA etc is maintaining higher prices in an artificial sense, will this keep up indefinitely and are we not going to ever really see a collapse as the natural economy would see, me wonders.

It reminds me a bit of the headage payments in farming and such like - I know that is a completely different situation and I don’t wish to be lampooned by the farming community here, but these sort of payment schemes and grants have allowed farmers over the years to produce food and such like, where it would not have made enough profit to produce these things without such payments. That is that the payment schemes made up the shortfall in profit and thus created an artificial economy, but it works well in a very general sense. Will property continue to be protected by the government in this way? I think this in turn actually devalues property more however as we all know how artificial an investment it is right now. Like that it could collapse any minute!