Which Mortgage Is Right For You?

Ireland's big five mortgage banks are all lending but all are offering different deals to attract borrowers. We look through what's on offer and assess the right deal for you.

1427

WHICHMORTGAGEBanks are lending… but who should you choose?

TV adverts, online, in magazines and newspapers. It seems the big five Irish mortgage banks are out in force looking for business. Despite the Central Bank’s new mortgage rules that were announced in January 2015 (see our expert’s guide here) the banks are keen to lend mortgages for eligible customers.

However, there is little variation in terms of rates and eligibility because of tight financial markets and government imposed rules. So each bank is coming up with clever new deals and package offers to make their mortgage seem more appealing than others.

The trouble is this makes it hard to see through the difference between them. Here we attempt to go through the key aspects of what’s on offer and try to delve behind the marketing campaigns to find the best mortgage for you.


Which Mortgage? Which Bank?

AIB

AIB Mortgage Ad

What are they offering?

AIB have been running those great little adverts about the kid checking you his local area. He’s checking out where the best coffee hot chocolate is and how much is the taxi into town. This is a nice feel-good campaign based around their key selling point – 12 months mortgage approval.

Is it a good deal?

Most banks have until recently been offering just 6 months of approval. That means from successful application you had only 6 months to find, bid on and secure your first home. So were as low as just 3 months.

In an extremely competitive market with low stock levels this was extremely hard. Many first time buyer’s time limit ran out and they had to reapply, or worse still they were forced into competitive bidding to secure a house before expiry. Many more found delays between going sale agreed and exchanging ran over their time limit and threatened to lose the deal.

Allowing 12 months is a good sensible offer. It gives the buyer the time to find their first home and carefully consider their purchase. Thumbs up for this campaign.

Find out more about mortgages with AIB here…


Bank of Ireland

What are they offering?

Bank of Ireland’s main offer is to pay cash back of 2% of the value of your mortgage to any first time buyers or mortgage switchers. This was until recently an offer to pay the 1% stamp duty but it was capped. This new unlimited deal is a far better deal on the face of it.

Is it a good deal?

With this deal you will receive the 2% of the value of your mortgage back upon completion. That means it can’t be used for a deposit or anything towards securing the house. But it’s an added bonus that may go towards moving costs, furnishing the property or fixing up anything urgent in the house.

It’s a sizeable sum. 2% on a mortgage of €220,000 is €4,400. That would be enough for a decent refurbishment, a new bathroom, landscaping or even an affordable IKEA kitchen.

But what’s the catch? For what we can see this money is capitalised into the value of your loan. So you will pay it back (and with interest probably double that) over the lifetime of the loan. It’s probably a welcome lifeline for many ekeing out every cent they have to buy their first home, but a lump of cash does seem a rather unsubtle marketing gimmick. Go into it with your eyes open.

Other than this, Bank of Ireland are offering what they call a “House Hunter Mortgage” – explained as a mortgage that goes with the person not the house. This is just a clever name for it, in reality all banks have approvals in principle that go with the buyer until a house is secured, and then the bank checks out the house. BoI’s approval only extends for 6 months so you have to be quick.

Find out more about mortgages with Bank of Ireland here…

You can also visit Bank of Ireland’s MortgageStore.ie for more information…


EBS

EBS mortgages

What are they offering?

EBS are focusing on making applications easier by offering mortgage appointments when you want, not just within usual bank opening hours. They will do appointments early in the morning, late in the evening and even weekends.

Is it a good deal?

They are very much an ‘in-branch’ type of bank, rather than online. This can be good if you like to keep it local and their associated brokers in their branches around the country work hard for their prospective customers to get approved by head office.

Certainly convenience is an important factor to many busy families so this policy will get people through the door. But without the flashy offers and cash back from the other banks they might not be so successful securing the business when the calculators come out.

Find out more about mortgages with EBS…

Permanent TSB

Permanent TSB

What are they offering?

Permanent TSB seem the most focused on offering good interest rates, promoting their “lowest 12-month discounted variable mortgage rate” for both their first time buyer mortgages and movers.

Is it a good deal?

We’re not financial advisers so we’re not going to compare or comment on rates. But the word discounted in there usually is a cause for concern. Often an initially low discounted rate will bounce back up to a higher rate after a period of time. Here PTSB state they are offering a 0.50% discount for the first 12 months. The concern is the initial rate is affordable but once the full rate comes in you might struggle to pay unless your circumstances change. Check the small print and talk to a financial advisor.

Permanent TSB are also offering 10 months mortgage approval and €1,000 towards your legal fees – nice little incentive that would almost cover the complete cost of your conveyancing.

Find out more about mortgages with Permanent TSB here…


Ulster Bank

ulster bank mortgage you can live withUlster Bank’s marketing message is: “A mortgage you can live with…”

This is a new approach and in our opinion a very honest one. It is focused on getting buyers to agree an affordable mortgage, not going to the hilt and getting the biggest loan possible. It’s a subtle message but one that everyone should really be talking about these days.

What are they offering?

There is no major headline-grabbing offer with Ulster, rather a package of helpful services and fair rates. Here’s some of what’s on offer:

  • Lower variable and fixed rates;
  • Extended fixed rates, allowing you to fix lower for longer;
  • When your fixed term ends, they will offer you the same rate as new customers;
  • If you choose a variable rate, you can move to a fixed rate at no extra fees;
  • €1,500 towards your legal fees for all new residential mortgages;
  • Saturday openings and mobile mortgage teams.

Is it a good deal?

We like the no nonsense approach from Ulster Bank. They are offering supposedly good rates, they have convenient application processes and the €1,500 legal fees is a nice bonus to help with the costs of purchasing.

Rachel Roche – Ulster Bank Mobile Mortgage Manager for Dublin South / Wicklow

What we love is their new idea that makes it even easier to talk to someone about your mortgage: Mobile Mortgage Managers

Ulster have a team of mortgage experts out on the road and connecting with home owners and home buyers in your local area. Instead of taking time out of your day to get down to your local branch (with your partner and all your paperwork), Ulster’s mortgage team will come to you. Whether that’s at home, your place of work or a local cafe – their friendly brokers will come to you when and where’s convenient.

Find out more about mortgages with Ulster Bank here…


So which mortgage or bank is right for me?

The answer is: it depends!

It really comes down to your personal circumstances and your eligibility for a loan. Each bank have their own criteria and sometimes you won’t be able to pick the offer you want, they will pick you.

Our advice is to apply to your existing bank and perhaps one or two others. See who sees you as eligible and if you’re lucky you might get a choice of two or more. If you haven’t spotted a house you like yet then perhaps AIB or PTSB’s long approval time limit might suit you. Or if your future home needs some work then perhaps Bank of Ireland’s cash back scheme will help you with that initial cost.

Whatever you do, be careful with your decision. This will affect you for possible the next 30+ years! Make sure not to over extend yourself. Get a mortgage you can afford and looking for houses appropriate to your budget.


5 Questions Before You Apply For A Mortgage

1. Where do I start when applying for a mortgage?

Before you go looking at property and getting your heart set on your dream home, always find out what mortgage you can afford. You can do a quick mortgage check online with each of the banks (AIB / BoI / EBS PTSB / Ulster) but it costs nothing to apply to each of them or speak to a mortgage broker.

2. Should I stick with my existing bank?

There is no real reason you have to go with the bank who holds your current account, apart from making it slightly easier to apply for a mortgage. In any rate you will need to supply the same details to all the banks and it makes little difference to your chances of success these days.

3. What do I need to apply for a mortgage?

Both applicants will need to file a collection of documents. Typically you will need ID, proof of address, 6 months of bank statements, 3-6 months of payslips and records of any other borrowings. Some banks have their own checks and requirements and all will run a credit check on both applicants. AIB have a good list here.

4. How many banks should I apply to?

There is no harm applying to more than one bank and as many have varying criteria, it’s worth applying to a few to see who will approve you and for how much. However be warned that each time a credit check is run on you, it gets registered on the system and some might think it looks a concern if you are subject to regular checks.

5. Direct to the bank or via a broker?

Today it’s very easy to apply online directly to the banks. However it is still the case that a professional can get your through the application process and get you a better deal than on your own. You might get rejected by a bank and not know why, a good broker can advise you how to fix your position and lobby on your behalf to make sure you get approved.


 

For more articles about mortgages at IrishHome.ie go here…

*Please note no one here is a financial adviser. We’re just looking at the the deals in laymans terms. Please seek professional advice from a financial advisor or mortgage broker. Thank you!