Skip to content

Mortgage Products & Rates

MORTGAGE PRODUCTS

Main Types of Mortgages

Annuity (repayment) mortgage

This is the most commonly used mortgage type for consumers. One would take out a loan for a certain period of time, typically 20 -35 years, and paying off that loan in monthly instalments.

  • Your monthly mortgage repayment is made up of two parts – capital & interest
  • Interest is calculated at regular intervals by your mortgage lender
  • In the early years, a higher proportion of your repayments are for the interest element. As time goes on, the proportions change so that you are paying less interest and more off the original loan amount

 

MORTGAGE INTEREST RATES

Variable Rates

variable-interest-rateVariable rates can fluctuate in line with European Central Bank (ECB) increases or decreases in the base rate, lenders’ costs and market forces.

  • Your lender can decide (except in case of a tracker mortgage) whether or not to pass on ECB rate increases or decreases in whole or in part to you.
  • Variable rates generally suit if you are in a financial position where an increase in interest rates would not adversely affect your ability to repay.
  • Should you wish to repay your mortgage early, pay in lump sums, reduce your term or increase your repayments, there are no penalties with a variable mortgage.

LTV (loan-to-value) Variable Rates

Varying variable rates are available from some Financial Institutions depending on your loan-to-value (this is your mortgage as a percentage of the lower of purchase price or market value). The lower the LTV, the more preferential a variable rate is available.

Fixed Rates

With a fixed rate mortgage, you undertake to pay a set amount per month for the fixed term; your rate is guaranteed not to change during this fixed period.

  • If you are on a fixed rate you will not benefit from any rate cuts that your lender may pass on to variable rate customers, but you will not be subject to any increases either.
  • Fixed rates are commonly available over one to five years with 10 and 20 years fixed rates available
  • Fixed rates are suitable to an individual who needs to and likes to budget their outgoings over a period of time. It gives you certainty as to what your repayments will  be for a certain period of time.
  • If you are in a fixed-rate contract, there are usually penalties if you want to switch lenders, switch to a variable rate, re-mortgage or pay off all or part of your mortgage early. There is no advantage to be gained from paying in additional amounts during the time in which you are fixed nor can you change your term during the time you are fixed without incurring penalties.

Discounted/Introductory Rates

These are usually offered to first time buyers or new customers and result in lower repayments for an initial period – usually one year.

  • At the end of that time, you have the option to go onto another fixed rate or to go variable
  • Before accepting a loan offer you should be aware of what you will have to pay when your discounted period runs out.

Tracker Rates

These rates are no longer on offer in the Irish mortgage market. Clients with existing mortgages pre 2009 who are on a variable rate could be on a tracker variable rate but no new mortgages issued in 2009 will have tracker rates applying.

Tracker rates guarantee to stay within a specified margin of the European Central Bank (ECB) rate. Movements in the ECB rate are fully transmitted in a defined timeline to the customer.

Rates based on loan-to-value (LTV) ratio

Loan-to-value ratio is the percentage of the current market value of your house that you owe on your mortgage.

  • For example, if your house is worth € 300,000 and the mortgage outstanding is €150,000, then your LTV is 50% (€150,000/€300,000)
  • Some lenders offer lower variable rates if your LTV is below a certain level, e.g. 80%

Split Rate

This is where a portion of your mortgage is on a fixed rate and the other portion is on a variable rate.

 

WARNING: YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP PAYMENTS ON A MORTGAGE OR ANY OTHER LOAN SECURED ON IT.

 

WARNING: YOU MAY HAVE TO PAY CHARGES IF YOU PAY OFF A FIXED RATE LOAN EARLY.