Longer-term fixed rates have mainly been the preserve of other EU countries until now. Finance Ireland’s new competitive rates will be available to first-time buyers, movers and switchers from June.
After the recent shock news that Ulster Bank and KBC are both planning to cease operation here over the coming years, Finance Ireland has stoked some much-needed competition into the Irish mortgage market by offering the country’s first 20-year fixed-rate mortgage.
Fixed mortgages have become increasingly popular in Ireland in recent years and now account for over 80% of all new mortgages taken out, according to the Central Bank.
However the maximum fixed-rate term on offer until now has been 10 years, far short of the 20 and 25-year terms that are commonly available in other EU countries. And even then, not all lenders offered a fixed rate this long
Fixed-rate mortgages can give mortgage holders financial stability and peace of mind because you know your monthly mortgage repayment won’t change for a set period of time. They can also help give wider stability to the economy.
For example, from December 2005 to October 2008 the ECB raised interest rates from 1.25% to 3.25%. On a €300,000 mortgage this would have added around €300 a month to a mortgage repayment. This would have put huge pressure on many mortgage holders who had already overextended themselves in many cases. Had fixed rates been more of the norm at the time, the arrears crisis that followed may have been less severe...
KBC, Ulster Bank, BOI and AIB all offer 10-year fixed rates at present, starting from 2.95% for those with a 10% deposit. However Finance Ireland is now outdoing them all with 15-year and 20-year rates - meaning some homeowners may be able to fix for the entire length of their mortgage!
The rates on offer are also highly competitive. For those with a 10% deposit the rate is 2.99% for two decades. For those with a 40% deposit it’s 2.60%. This means Finance Ireland's 20-year rates are as competitive as many banks’ five or 10-year ones!
What are Finance Ireland’s new fixed rates?
Here's a look at the new 10, 15 and 20-year rates from Finance Ireland which will be available to first-time buyers, movers and switchers from June.
|
Loan-to-value |
10-year rates |
15-year rates |
20-year rates |
|
≥60% |
2.40% |
2.50% |
2.60% |
|
≥70% |
2.55% |
2.65% |
2.75% |
|
≥80% |
2.70% |
2.80% |
2.90% |
|
≥90% |
2.85% |
2.95% |
2.99% |
Innovative approach to pricing
Finance Ireland has also said that the fixed rate it offers customers will decrease as the mortgage is paid off and the amount of equity in the home increases. So while you might start off paying a rate of 2.99%, for example, you’ll move onto lower and lower rates as your mortgage term progresses, which is something no other lender does right now.
What's more, customers will have the option to pay back a lump sum of up to 10% of their outstanding mortgage balance, without penalty, in each year of the fixed term.
Billy Kane, CEO of Finance Ireland, said: “I’ve been involved with the Irish mortgage market for over 30 years and I believe that this is one of the most significant innovations made here in that time.”
We tend to agree!
Compare mortgage rates
Remember, whether you’re a first-time buyer, home mover or switcher you can easily compare interest rates, offers and cashback incentives from all Ireland's lenders using our mortgage calculator.
When it’s time to apply for your mortgage, you can submit an online enquiry through our new mortgage broker service and one of our experienced financial advisors will call you back to get your application started.
You’ll be happy to hear that our mortgage broker service is entirely free and is fully digital from start to finish, meaning everything can be carried out online from the comfort of your home. And it's completely paper-free too!
To find out more about our mortgage broker service, see here and to learn about how your mortgage application will be assessed, take a look at this guide.
If you’re considering applying for a mortgage and are looking for more information, check out the following:
- It’s best to try to minimise mistakes in the run-up to applying for a mortgage. Here are 9 common mistakes to be aware of when applying for a mortgage.
- If you’re a first-time buyer, we recently compared the best mortgage rates currently on offer to first-time buyers.
- Getting a mortgage deposit together is not an easy task. Here are 6 tips to help you get your mortgage deposit together.
- With fixed-rate mortgages becoming more and more popular, it’s important to understand the pros and cons of both fixed and variable mortgages before applying.
Get in touch with us
What do you think about today’s news? Would you consider fixing your mortgage for 20 years?
As always, we’d be happy to answer any questions you have on Finance Ireland’s new mortgage offering or any mortgage-related questions in general.
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