Wednesday 14 November 2018

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Cork Independent

Home & Property

Is there a chance to slash your fixed rate mortgage repayments?

Thursday, 9th August, 2018 9:15am

Market developments are signalling an impending explosion in the fixed rate mortgage market in Ireland, a Cork-based mortgage broker has claimed. 

According to MyMortgages.ie, KBC is the latest to slash its rates to five-year fixed rate to 2.8 per cent.

Ulster Bank are now offering a 2.3 per cent two-year fixed rate and a 3.25 per cent fixed rate for seven years.

PTSB have also recently dropped its fixed rates to 3.7 per cent for existing customers.

According to the mortgage brokers, these cuts signal real savings for mortgage holders. Joey Sheahan, Head of Credit with MyMortgages.ie said: “The new fixed rates offerings are good news for a variety of mortgage holders the length and breadth of the country. Mortgage holders with more than 10 per cent equity in their home are in a particularly strong position. So, it’s time to be proactive in reviewing your mortgage and ensuring you get a piece of this rate war savings pie!

“Our figures show that a homeowner in Cork with a typical €350,000 mortgage could save €310 per month by switching to a better fixed rate now and save €111,733 over the lifetime of a 30 year mortgage.”

MyMortgage.ie say that Central Bank figures show that based on activity in the market, that fixed rate mortgages are soaring in popularity.

Latest CBI figures showed that fixed rate mortgages accounted for 54 per cent of new agreements over the three months to May 2018.

Mr Sheahan thinks figures will continue to climb and are on their way to mirroring the euro area average, where fixed rate mortgages account for approximately 80 per cent of new agreements over the same period.

He said: “Borrowers are finally flocking to make the switch from standard variable rates (SVRs) which have been a heavy financial burden on the households of Ireland for years now.

“Between more first time buyers (FTB) choosing fixed rates and a growing volume of mortgage-switchers as house values improve everyone’s Loan-To-Value (LTV) position, we would expect to see the volume of new fixed mortgages explode over the next 12 months.”

MyMortgages.ie say that while it’s almost guaranteed that the ECB will up their rate in the next two-three years, mortgage holders are in a strong position to negate the impact of such increases by switching lenders and availing of these fixed rate offers.

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