Numbers released for Irish Mortgages

Banking and Payments Federation Ireland have released the figures from August concerning the number of approved mortgages. Of course, Covid-19 has been a very difficult time for many people, and as such, there has been a decrease of people asking for mortgages.

The statistics show that there have been 14.1% more mortgage approvals in August compared to July. This translates to 3,875 approved mortgages in August, which is 11% less than last year, although this was to be expected because of the global pandemic.

The total value of approved mortgages in August was 946 million euros which seems to suggest that the market is recovering well. It is likely that this figure reaches 1 billion euros in September, which would be a good sign for the general Irish economy, which seems to be doing fine.

Movers, as in people who had previously owned a home thanks to a mortgage, accounted for 1,000 of the approved August mortgages while first time buyers were responsible for 2,259 of these mortgages. This means that first time buyers represented 58% of the total mortgages whilst movers represented 26%, which are normal figures.

If we translate this to a value, first time buyers had approved mortgages for a value of 556 million euros while movers’ mortgages were valued at 267 million euros. In percentages, this means that first time buyers represented 59% of the value of the mortgages, and movers represented 28% of the same value.

Dr Ali Ugur, who is Banking and Payments Federation Ireland’s chief economist, is pleased with these figures, despite the fact they are down overall since last year. Mortgage activity had already increased in July, so a continued increase in August is a very good sign and should deliver a much better frame for the expected decrease in mortgage activity over the coming months. 

The mortgage drawdowns are down about 18% in the first half of 2020 compared to the first half of 2019. As previously mentioned, this is totally unsurprising: the middle of a global pandemic is not exactly the ideal time to buy a new house and make a long term commitment.

Dr Ali Ugur went on to say: “But, if recent approvals convert into drawdowns as they normally do, we could expect to see a better outcome than originally estimated back in April/May.”

He continued with: “It’s also interesting to note that when we compare first-time buyer mortgage approvals in August 2020 to the same period last year, there was a higher number both in terms of value and volume. Given that 58% of all approvals are to FTBs, we could expect to see that important category continue to be the single largest element of the market”.

All in all, it seems that the Irish mortgage market is recovering nicely, and we can certainly hope that it recovers fully after the Coronavirus panic.

Avantcard’s move into Irish mortgage market

The consumer finance company Avantcard has declared that it will enter the Irish mortgage market with a range of products later this year. Avantcard is based in Carrick on Shannon, with a second office in the capital Dublin and has been providing consumer finance products to customers in Ireland for over twenty years.

At the moment, Avantcard specialises in credit cards and personal loans but Bankinter, the owner of Avantcard, already has considerable mortgage business in Spain, Portugal and Luxembourg and will therefore be bringing its expertise to the Irish market.

The Avantcard name will be replaced by a more fitting title: Avant Money. This is to reflect the diversification of products offered and its ambition to delve further into Irish markets, and it will begin with mortgages.

Back in June 2019, there seemed to be the possibility of Avantcard moving into the mortgage market with the postal distributor An Post, but at the time, Avantcard chief executive Chris Paul dismissed these rumours, stating that a move into the mortgage market was not on the cards.

When asked about why a move into the mortgage market was now happening, Paul said this: “Over the years, we have seen how Irish consumers have been under-served in comparison to their European counterparts and it’s time for that to change”.

He went on to say: “Supported by our parent, Bankinter, and building on our strong consumer finance legacy, we are confident that we will be able to provide markedly better value for customers and deliver genuine, long-lasting change”.

Not much further information has been giving about the products themselves and it seems that Avantcard are keeping their cards relatively close to their chest. They have clearly stated that applications will be processed on a case by case basis, which is a good way to avoid giving further information.

Irish consumers should be excited about this information as increased competition almost always advantages the consumers. Rival companies are incentivised to bring their prices down to avoid losing customers and generally, all companies will have to try harder to attract and maintain customers.

The chairman of the Association of Irish Mortgage Advisors, Trevor Grant, is excited as well, and seems impressed with Avantcard and their ambitions. He had this to say about the move into the mortgage market: “We have worked closely with Avant Money over the past number of months, to support them with knowledge and insight into the Irish mortgage market. We have been hugely impressed with their determination to deliver a suite of excellent mortgage products.”

He also gave more on information on how the mortgage products will be offered, which is likely to be through specialist mortgage intermediaries: “As new mortgage lenders such as Dilosk, Finance Ireland, ICS and now Avant Money, come to the Irish market, they have invariably chosen specialist mortgage intermediaries as their primary distribution channel”.

He explained why this should positively impact Irish customers like this “This is mainly due to the fact that these intermediaries can provide greater product choice across the board, as well as often being able to offer better rates that are exclusively available through this channel.”

Generally speaking, this is very positive news for Irish consumers to receive, especially in the current climate. Coronavirus has been difficult on the country as a whole and it has become more and more challenging to get a mortgage for a house.

This move is no guarantee that all of a sudden mortgages will be easy to obtain, however it is a very good sign that companies are willing to make the plunge into the Irish market as it means they see some value there.

With more companies and more competitivity, consumers will have more choice and more freedom, and will not be constrained to one company or one price. If Bankinter and Avantcard, soon to become Avant Money, can deliver on their promises of “genuine, long lasting change” and “markedly better value for customers”, then it will be excellent news indeed for the average Irish person looking for a mortgage.


European Union letter encourages reduction of broadband rates for Irish consumers

The European Commission has recommended as a matter of necessity that the Irish communications regulator should reduce rates for fixed-line telecommunications, which could in turn lead to a reduction of cost of broadband as well as other services for consumers.

ComReg, the Commission for Communications Regulation, was sent a letter by the European Commission recommending that the regulator “update relevant pricing decisions as soon as possible”. This was due to several complaints about a delay in changing the setting of wholesale rates that Eir, the biggest telecommunications company in Ireland, has been setting for wholesale rates.

The language used in the letter has been described as “unprecedented”, and other telecommunications companies in Ireland have been pleased with the swiftness and tone used by the Commission, as it has taken a clear stance on what it expects from both Eir and ComReg.

Whilst it is still just a letter of recommendation, despite the urgent language, and therefore is in no way legally binding, the pressure placed onto ComReg will likely force them into action as this is both a public and private matter.

The conflict between Eir and other Irish Telecommunication companies is in theory rather simple. Eir have been investing into infrastructure in order to bring broadband, fibre and other forms of telecommunication to Ireland, allowing the other companies to use them but also being able to set their own rate.

Rival companies argue that Eir has been able to enjoy excessive returns for this investment which does not truly represent the value of their investment, something that Eir has always disagreed with.

ComReg has said that they will change the weighted average cost of capital rate from 8.18 per cent to 5.61 per cent. In essence, this compensates Eir for their investment into infrastructure that they have done so far, and in turn, this means that Eir will be able to reduce the rates that they charge the rival companies to profit from these infrastructures.   

ComReg has been delaying this change so far, and it is for this reason that the European Commission has written this letter. Alto, a body that basically represents the other major telecommunication companies than Eir, is understandably the driving force behind the pressure being put on both Eir and ComReg.

Some rivals are also concerned by the fact that fibre broadband charges have not been included price change recommendations and thus Eir will continue to charge the other operators a higher rate of fibre for a few more years. On top of this, if the next weighted average cost of capital rate review does encourage Eir to reduce their rates that Eir will appeal this decision for fibre and continue the higher charge for other operators.

In reference to the letter, Sky Broadband stated that it was pleased with the “clear and unambiguous comments in the letter” and that it was “a matter of urgency to protect consumers”. While it is much more likely that Sky Broadband regards this as a matter of urgency to protect its own financial healthiness, it is undoubtedly true that they are trying to provide a cheaper service than Eir, and so any move towards this will benefit Irish consumers. Vodafone also welcomed the letter and support the sentiment wholeheartedly.

ComReg has declared that it is finalising its decision and will be considering the European Commission’s advice and comments, and that a project to update cost models is underway. It is expected that in the next twelve months they will be preparing a few changes on the fast growing and changing industry of Irish telecommunications.

A spokesman said : “We will decide whether it is necessary to consult on updated broadband access prices based on an evaluation of whether underlying costs have changed, so that they have become materially different from prevailing regulatory prices”.

He continued by stating : “ComReg’s approach to updating regulated prices reflects the importance of regulatory certainty in promoting investment, as well as the desirability of avoiding a material discrepancy between prices and underlying costs”.

Mortgage rates in Ireland for 2020

At first glance, mortgage rates in Ireland might look much like those in England. But Ireland has experienced a different economic trajectory in the last few years, so the range of mortgage rates will likewise be different.

In Ireland five-year fixed mortgage rates can be a full percentage point lower than those in England, even though they are still among the highest in the Eurozone. These rates are not available for everyone but would be an option for certain groups who have an existing mortgage of over €300,000 and can offer at least a 20% deposit or similar equity on any existing property, using a calculator will make this clear. Ten-year fixed rate mortgages are also available, although at a higher rate of interest, naturally. Switchers and home movers will enjoy a better rate to some, as is always the case with these mortgages.

For those who don’t have access to equity or whose deposit is lower, there are other options including fixed rate mortgages for five or more years. Even though they may not be the best value, they are still affordable. The Central Bank’s loan-to-income rules apply unless a lender can show a very good reason why they should be exempt, so most lenders should expect to be subject to these rates.

Fixed rates of anything more than seven years for mortgage rates in Ireland have been rare, although they have been popular where they can be found. At least new buyers could budget for five years of mortgage payments and know what they were paying every month. Now they have a few more years’ grace. Ten-year fixed rate options are now an option; although buyers should be aware that this may mean a major hike in payments after the 10-year period is over. Cashback offers are not always the best option although the immediate lure of these offers may be strong. The savings offered by long term fixed rate offers are better, where they are available.

Fixed Rate Popularity

Fixed rate mortgage rates in Ireland remain popular because they mean buyers can budget effectively for a fixed amount every month. For those on a lower or fixed monthly budget, being able to know how much recurring bills may cost is imperative, so a fixed rate mortgage of any length is equivalent to a direct debit in that sense – everyone knows how much needs to be paid every month. For that very reason, variable rate mortgages have fallen in popularity. Simply, they are more difficult to budget for effectively, especially on a lower wage job where income may be variable. They can be manageable, but a fixed rate term, renegotiated every few years, is preferable.

Fixed rate mortgage rates in Ireland seem to be the way to go, for budgeting reasons if nothing else. Many lenders are now offering such mortgages, which are easier to apply for as long as the applicant can show they have adequate income every month to meet the required payment. At least house buyers should ask about the availability of such deals with their preferred lender or financial adviser, if only to ensure that they consider all options.

4 Common Mistakes When Buying Broadband

Okay, so you’re sick and tired of internet that’s barely faster than dial-up speed, and you’ve decided to take the plunge and start shopping around for a new broadband package and provider. This is all well and good, except for the fact that shopping for broadband is like wading through quicksand at waist height. There are so many variables to consider, so many providers, so many deals, so many packages, and so many pitfalls to watch out for that you may wish to quit before you’ve even started and stick with your super-slow internet instead. To make your broadband shopping experience that little bit easier, here are 4 common mistakes people make when buying broadband. Make sure you don’t make these same mistakes, and everything will run a whole lot smoother.

Not shopping around

Nobody wants to pay more for something than they have to, and if you’re looking for broadband that doesn’t cost the earth, you’ll need to shop around and take your time. Virtually every household now has broadband, and when you consider the fact that the internet plays such an important role in everyday life, it’s easy to understand why. Because of this, there are now more broadband providers than ever, and each one offers their own unique deals and perks.

Going for the cheapest option

While it pays (literally) to be savvy with your finances, sometimes it’s worth spending a little more when looking at the bigger picture. You see, some people that shop around for broadband, literally base their search purely on the cost of the broadband deal itself. You get what you pay for in this world, and if you go with super-cheap broadband, there’s a strong chance that it will not be up to scratch. Competitively priced broadband is one thing, but if it’s ridiculously cheap, it will likely be plagued with issues. You needn’t spend a fortune, but don’t base your search purely on price alone.

Not considering data usage – If you’re a large household, or if you stream a lot of content and download a lot of things, you’ll get through a lot of data. Therefore, an unlimited broadband data plan will be more beneficial to you. If however, you don’t download very much, you might be okay with a data allowance. These packages will likely be cheaper than unlimited data packages and so you’ll save yourself a bit of money in the process.

Not considering bundles

If you have Sky TV or Virgin, it might be cheaper and more beneficial for you to go with a bundle deal instead of an individual broadband package. Bundles tend to include line rental, the TV package you’ve purchased, and the broadband, all rolled into one. If you need all three things anyway, it could be cheaper and easier to go with a broadband bundle deal instead.

How to find the best deals on car finance

Buying a new car isn’t like going to the shops to purchase a new outfit. A new car is potentially a very big purchase, depending on what you’re looking for of course. We all decide to buy new vehicles for different reasons. Some of us look for a new car because our old one decided to stop working, while others look for a new car as a way of upgrading and treating ourselves to something nice. The amount you spend on a new vehicle is entirely up to you, but if you do want to make the process a little more affordable in the short-term, you may wish to go with finance. Rather than paying one large lumpsum, you instead spend a much smaller amount each month, over the course of several years, until the price of the vehicle has been paid off, plus interest of course. If you know where to look, there are some great car finance deals to be had. Here are some tips to help get you started.

Make sure you have a strong credit rating

Before you even consider trying to finance a car, you should first take the time to ensure that you have a strong credit rating. Your credit rating will not only affect your eligibility for getting car finance in the first place, it will also affect some of the deals that you could potentially access. If you have a poor credit rating, your likelihood of obtaining car finance will be very low. What’s more, to add salt to the wound, if you do apply for car finance but are unsuccessful this will actually make your credit rating drop even further. To build a strong credit rating, never miss a payment, don’t apply for unnecessary credit, don’t take out too many loans, and don’t get careless with your money. The stronger your credit rating, the more likely you will be to be approved for car finance.

Use the internet to your advantage

If you’re looking to save money and want to finance a new car, the internet is a great resource to have at your disposal. There are websites and forums out there listing some of the best deals and companies offering said best deals, as well as offering helpful advice on what you can do to improve your chances of being approved. There are sites telling you when to apply, how to dress, how to act, what to ask, what to look out for, and much more besides. There really is a wealth of knowledge out there at your disposal, so use it wisely.

Use a credit card

If you’re not sure about the interest payments associated with car finance, if you have the funds on your credit card, you could use that instead, and essentially create your own car finance deal. If you have a credit card with 0% interest on purchases for example, you won’t pay any interest. You will of course need to pay at least, the minimum amount each month, but that will still likely be cheaper than most interest rates offered by car finance companies.

Fun Facts About Mortgages

If you’re looking to get on the property ladder for the first time, there’s a lot to know about mortgages. Buying a property nowadays is decidedly more complex than it was two decades ago, not to mention the fact that it is also much more expensive as well. However, it’s not all doom and gloom, as buying your first property will likely be one of the best investments that you could ever wish for. Today we’re not going to talk to you about numbers, we’re instead going to take a more light-hearted look at mortgages and will be sharing some interesting and fun facts about mortgages that you may not have been aware of.

It is possible to purchase a house without a deposit

Decades ago, buying a property without a deposit/down payment was surprisingly easy. These days however, it’s the deposit that most people struggle with. Generally, it’s around 10%, which is a lot of money to save up. Despite this however, it is still possible to purchase a house without a deposit, although it is very rare.

First time buyers are quite rare

Given the state of the economy and the market, this probably won’t come as that much of a surprise, but either way, here it is. Nowadays there are far fewer first time buyers than in the past. Typically, you’ll find that first time buyers make up roughly 40% of the housing market. Lately however, that number has dropped. It might not sound like much, but by 2013, first time buyers made up just 38%. This 2% drop may not sound like much, but in the grand scheme of things it’s quite significant. It’s estimated that that number could now actually be even lower still.

Mortgage debt is quite high

For the purpose of transparency, we need to tell you that by ‘quite high’ what we actually-mean is ‘astronomically high’. At the end of the final financial quarter of 2013, in the US alone, mortgage debts totalled $13 Trillion.

The word ‘mortgage’ is quite solemn

The word mortgage is derived from the French word ‘Morgage’ which was sometimes spelled ‘Mort Gaige’. This literally translated to ‘dead pledge’ in French. The meaning behind this was that, once you pay the mortgage off or fail to make payments, the mortgage dies.

Most people don’t understand mortgages

Mortgages are incredibly complex, and buying a property is certainly not simple or easy. According to market research however, around 33% of people admittedly do not understand the basic fundamentals of mortgages. There are of course, mortgage advisors and other property and lending experts you can talk to who can help, and they’re certainly well worth speaking to, especially if you’re looking to get on the property ladder for the first time.

4 Things You Didn’t Know About WIFI and the Internet

Although there are arguments to be made for the internet slowly turning us into slaves to technology, for the most part, broadband and the internet has been a truly remarkable invention that has revolutionized modern life as we know it today. Without the internet, you wouldn’t be reading this fun article today.

Without the internet, you wouldn’t be able to read your friend’s pointless statuses on social media, or watch funny videos of people slipping over when you’re supposed to be working. On a more serious note, without the internet, life as we know it today would come grinding to a screeching halt. We owe a lot to the internet, but are you a self-proclaimed ‘internet buff’? Unless you already know these fun facts that we’re about to share with you, we’re going to recommend that you hold off on referring to yourself as an internet buff just yet. Here are 4 things you didn’t know about WIFI and the internet.

WIFI doesn’t stand for anything

Some of you reading this article will now be getting pretty hot under the collar, as the general belief is that WIFI actually stands for ‘Wireless-Fidelity’. That, however, is not the case. An early WIFI advertising slogan incorrectly stated that WIFI did indeed stand for ‘wireless fidelity’ and things took off from there. The truth however, is that WIFI doesn’t really stand for anything. It’s just a fun-sounding technical term used in the tech-industry.

The internet is not as new as you think

If you’re like us, you probably connected to the internet sometime in the mid to late nineties, as that is when the world really jumped on board the whole internet saga. The internet, however, was not invented in the nineties at all, it was actually created much earlier than that, way back in 1966 in fact.

The internet is water-based

Water and electricity generally don’t mix, but in the case of the internet, this is an exception. You see, the internet works thanks to a series of underwater ‘submarine communications cables’ which are laid underwater on the sea bed between various stations located on land. In the past, the internet has been disrupted thanks to these cables sustaining damage from numerous things, including ship anchors, and natural disasters such as earthquakes.

Broadband gets its name from physics

Nowadays, all households get their internet connectivity thanks to broadband. But what precisely is broadband? Well, broadband is a term used in the world of physics, to describe a form of radiation which gives off a ‘broad band’ (see what we mean?) of continuous frequencies. Technically speaking, the sun is a form of broadband, although don’t worry, we’re confident that the sun isn’t in fact a giant glowing broadband internet router that some superior alien species forgot to switch off. Or are we?

Car Finance – How to Purchase an Affordable Car

Owning a car is not only liberating, it also helps make everyday life so much easier. What’s more, with fantastic car finance deals available to more people than ever before, nobody is missing out. Car finance is one way to purchase an affordable car, and we’ll be looking at that in more detail a little later on, but what else can be done?

Buying a car is generally not cheap, and it’s certainly not like calling in at your local supermarket for a pint of milk and a loaf of bread. Buying a car can be an expensive ordeal, which is why we’ve compiled this article. If you’re on the lookout for a car and want to keep your costs low, here’s a look at a few tips on how you can snag a great bargain and buy an affordable car.

Purchase a car at least a year old

If you’re looking to buy a brand-new car, you should ask yourself whether it really does have to be brand new, or whether you could cope with a car older than one year old. You see, according to recent research, cars that are at least one year old are considerably cheaper than cars that are brand new. The second you drive a brand-new car out of the dealership it begins losing value. Cars, other than classics, are probably the worst investments you could make in terms of finances. Within the first twelve months, cars lose as much as 27% of their total value. Therefore, if you buy a car roughly a year old, it will still have very few miles on the clock, but will now be a great deal cheaper and more affordable. We’re not talking hundreds of Euros here, we’re talking several thousand.

Car finance

We touched on car finance earlier on, but now we’ll elaborate. Car finance is seen by some people as a rip-off, but that’s not true. Sure, once upon a time, car finance interest rates were extortionate, but times have changed. Now, finance companies have to be more competitive than ever, which means offering low interest rates so that people go with them in the first place. If you want to buy a reliable and fairly-new car, rather than a clapped-out old banger, car finance is ideal. Car finance lets you purchase a fairly-expensive car and pay a small amount each month over several years, plus a little interest.

Choose the right time to buy

If you are buying from a dealership, it may be worth planning your visit carefully. You see, dealership salespeople have targets to meet in order to snag bonuses, and typically they are based upon sales made quarterly. December, March, June, and September, towards the end of the month, are typically good times to visit. During this time, the more cars they sell, the more commission they will earn so they will be likely to do a better deal with you. Needless to say, don’t be afraid to haggle, especially as you have nothing to lose, while they have everything to gain.

Bizarre Mortgage Application Questions Revealed

People are quick to chastise millennials as being ‘self-righteous’ and ‘overly-sensitive’ with a false sense of entitlement, but when it comes to buying a property, especially for the first time, people in this day and age are right to feel hard done by. Their parents likely purchased their first property for less money than is now required purely to put down a deposit on a house. Ever since the credit crunch and the global financial crisis where the banks needed to be bailed out, lenders have really clamped down on their lending policies. It is now harder than ever to get a mortgage, though there is light at the end of the tunnel.

Lenders are becoming slightly less-strict nowadays, and there are plenty of resources and schemes available to help buyers get on the property ladder for the first time. Mortgage lenders do of course need to be cautious with whom they lend their money to, but some of the questions being asked are downright bizarre. If you’re thinking of applying for a mortgage, here’s a look at some bizarre questions you may find yourself being asked during the application process.

What do your children receive for pocket money?

If the person/persons applying for a mortgage happens to have children, this is indeed a genuine question. Yes, really. Now, bear in mind that the average price for a semi-detached property in Ireland is currently €271’000, it’s pretty safe to assume that the average child in Ireland will not be receiving anything close to that in weekly pocket money. If they were, the parents probably wouldn’t need to apply for a mortgage in the first place. Are the lenders really that strict that they’re genuinely worried about how much money a child is getting in pocket money each week?

How often do you eat steak per week?

This is another common question asked by mortgage lenders, and we can only assume it’s because they consider steak to be a luxurious and highly expensive food. In reality, steak prices nowadays are very reasonable, especially if you go for the less expensive cuts like rump. The lenders obviously want to figure out whether their mortgage repayments would be safe or whether or not the recipients would be out squandering their mortgage payments on Ribeye and sirloin steak instead. This question is flawed for many reasons.

To begin with, not everybody eats the same meals every single day, so some people have no idea when they’ll eat steak next. Then of course, there’s the fact that the recipients could simply lie. We’re fairly sure the mortgage police won’t be round every week to inspect the contents of their fridge.

How much do you spend on your pets?

Okay, there are some people out there that spend an astonishing amount of money on their pets, especially if their pets happen to be horses. Generally speaking, however, most people purchase the bare essentials needed to keep their fur-babies happy, clean, healthy, and fed and so we aren’t talking life-changing amounts of money.

Do you plan to have any more children?

This is a very personal question and it’s not really anybody else’s place to ask it, but some lenders do. Bear in mind that a mortgage is a long-term commitment that normally lasts decades, how can anybody give an answer for a future scenario? A couple may not be ready for kids when they apply for a mortgage, but three years down the line, perhaps they will be? You can’t expect them to tell the lenders that they want kids in three years because at the time of applying they may not have done.