Daft Property - Irish Property News

Rates wipe out benefits of decline in house prices... BENEFITS to first-time buyers from drastic falls in property prices are wiped out by sharp increases in mortgage costs, new research shows. House prices have dived by 40pc since 2007, which means potential buyers would need a much smaller mortgage. But a series of mortgage-rate hikes by all lenders mean that the cost of servicing even a small mortgage has shot up. Mortgage expert Karl Deeter accused banks of capturing most of the gains for potential buyers of lower prices by pushing up mortgage costs. Mr Deeter of Irish Mortgage Brokers looked at the cost of a 30-year mortgage for a €350,000 house at the top of the housing bubble in 2007. At that time buyers would have been able to get a good value tracker set at 1pc above the ECB rate. This would mean a borrowing rate of 2.25pc. The monthly repayments for this mortgage at the moment work out at €1,337, without factoring in mortgage tax relief. Mr Deeter said that th...