Mortgage - how much/long/amount??

Kersh

MYself and the gf are thinking (well, were thinking) about buying a house. We figured if we are going to move out together, why pay 900 euro per month on an apartment in Swords, and pay someone elses mortgage, so we looked into buying a house. Now the way i look at it is this. Im not paying 300,000 for a semi d in Dublin if I can buy a Detached in Louth/Kildare/Meath (I need a nice garage you see, and i hate being crammed into an estate) for c.300,000.
The only thing we can see is that to borrow 300,000 would take us approx 1400 euro a month for 30 odd years. Thats taking the piss really. For those of you who have mortgages, how long is it for, how much did you borrow, and what is your monthly repayments?
Surely half the country cant be throwing 1500 euro odd at the banks every month to own a way overpriced semi D/apartment, are they????
I would sooner decamp with the 300,000 and buy a house in the UK or France, and start over. And still have change. Its a bit mad isnt it. 300,000 for a sh1te aprtment, like the one she is renting a room in now that looks like it was thrown together in a week.

Cantab.

Kersh wrote:

MYself and the gf are thinking (well, were thinking) about buying a house. We figured if we are going to move out together, why pay 900 euro per month on an apartment in Swords, and pay someone elses mortgage, so we looked into buying a house. Now the way i look at it is this. Im not paying 300,000 for a semi d in Dublin if I can buy a Detached in Louth/Kildare/Meath (I need a nice garage you see, and i hate being crammed into an estate) for c.300,000.
The only thing we can see is that to borrow 300,000 would take us approx 1400 euro a month for 30 odd years. Thats taking the piss really. For those of you who have mortgages, how long is it for, how much did you borrow, and what is your monthly repayments?
Surely half the country cant be throwing 1500 euro odd at the banks every month to own a way overpriced semi D/apartment, are they????
I would sooner decamp with the 300,000 and buy a house in the UK or France, and start over. And still have change. Its a bit mad isnt it. 300,000 for a sh1te aprtment, like the one she is renting a room in now that looks like it was thrown together in a week.

The reality of modern Ireland. I guess if you balance the cost of living vs. economic opportunities, things balance out. What's the point in living in Latvia or somewhere where it's really cheap to live, yet there are hardly any solid opportunities for entrepreneurs?

3-bed semi-D in commuter-land: You should count yourself lucky!

nlgbbbblth

Mortgage term does not have to be for a 'round' amount of years.

32, 16, 24, 27 are all possible

masterK

Even though €1400 a month is a lot to pay surely it is a hell of a lot better than paying €900 a month to pay somebody elses mortgage? You will also have 2 free bedrooms if you go for a 3 bed so renting a room is also an option.

With repayment term it is advisable to keep the term as short as possible as the difference in the amount you pay over say 25 and what you would pay over 30 years is mainly interest due to the way mortgage repayments are calculated.

Kersh

There is no way in hell Im paying 1400 euro a month for the next 25 years for an overpriced pile of bricks. No way. Ill wait til the market collapses and ill buy then. If it doesnt collapse I guess uill just reent, and play with the extra 500 a month, only thing ill be missing out on is owning a house aged 60, which is kinda pointlesss imo.

masterK

Kersh wrote:

There is no way in hell Im paying 1400 euro a month for the next 25 years for an overpriced pile of bricks. No way. Ill wait til the market collapses and ill buy then. If it doesnt collapse I guess uill just reent, and play with the extra 500 a month, only thing ill be missing out on is owning a house aged 60, which is kinda pointlesss imo.

I think it's highly unlikely that the market will collapse, most economist expect the level of increases to level out and future increases will most likely be in line with inflation.

As for it being pointless to own a house age 60, I couldn't disagree more, if you have children it could prove a valuable inheritence to them or if you don't or your children are financially secure there is always equity release which will ensure you have a very cosy retirement.

Why not work out how much rent will cost for 25 years at 900 a month increasing annually by 3% (rough inflation), then work out the amount you would pay for a mortage of 1400 a month over 25 years then add the the current value of the property increasing by 3% over 25 years to see what a massive difference there will be. Also remember that your rent won't stay at 900 for ever, what if you have kids and need to rent somewhere bigger than an apartment?

Kersh

Hmmmm, I have looked at that, it just doesnt seem right to pay 300,000+ for something that evidently isnt worth that. Compared to what can be bought in UK/europe, for 300,000, it just seems like robbery.

delly

I was in a similar situation to you a while ago. At the start of 2002 i was renting a one bed apartment in Clontarf for €850. I then bought a 3 bed terraced house in Swords for €193k. Sold this house for €253k in 2004 and bought a 4 bed detached house on the edge of South Drogheda (Co.Meath) for €298k. A year later its worth about €350k.

Yes its a hell of a lot of money to be paying out on a mortgage but i got the house i wanted and am only half an hour away from Dublin. I didn't but my first house on the hope of making money, but because it was the most i could afford at the time, and i couldn't stand paying out 'dead money' on rent. Making a profit was a bonus, but it also allowed me to move up the magical property ladder. If you can afford to buy, i recommand making the plunge as i'd be pretty sure you won't lose anything but do stand to make a few quid as well.

scargill

Kersh wrote:

Ill wait til the market collapses and ill buy then.

I remember a friend of mine saying that to me when I bought my first house in 1998 for IR£76,000. more or less said all the things you are saying!

But I do know what you mean - mortgages are getting very big these days, but its all down to affordability. If you can afford 1,200 a month for your own place you should go for it.

ButtermilkJack

Kersh wrote:

...If it doesnt collapse I guess uill just reent, and play with the extra 500 a month, only thing ill be missing out on is owning a house aged 60, which is kinda pointlesss imo.

I know, I know, it's frustrating having to pay out so much for so little. But at 60, with your mortgage paid off, wouldn't life be nice!

Imagine the humility of reaching 60 and still having to pay some 25-year-old rent for his apartment/house which he bought as an investment

I agree with the other poster that it's unlikely the market will 'crash'. Who knows, but even if it does, your house is not going to be worthless for 20 years. With the population expecting to hit 8 million in the near future (with immigrants, those returning home, etc...) I reckon property will always be worth something.

BTW, my mortgage is 40 years Obviously I'll try to pay that off in 25 or so but I thought it was an advantage to get a small repayment to begin with. It seems I was right (for now anyway!), considering the recent 0.25% increase was €70 p/month. I'd hate to be stretched now and then get hit with a 2% or 3% increase in the next few years.

magpie

Ill wait til the market collapses and ill buy then

Ah, how many times have I heard that in the last 10 years.

You keep on paying the landlords' mortgages for them then - you haven't grasped the key things to remember when buying a house:

1) The value isn't the value of the bricks - its the value of what someone else is willing to pay for it, which at present is rising at something between 5 and 10% per year

2) If you sell your €300,000 house in 3 years, after it has been increasing in value by 5-10% per year and you have only been paying 3.5% interest on the loan during that time you don't need to be a rocket scientist to see you've turned a profit - oh and you've got to live there while you were at it.

It amazes me the number of people who view taking on a 30 or 40 year mortgage as a commitment to live in the house until its paid in full ("I'll be 70 by the time I own this house etc"). Personally I intend to trade up repeatedly until I've got the Georgian Townhouse with 50' Garden in D4 - I haven't stayed in any house I've bought longer than about 3 years. Property Ladder. You may have heard of it.

Of course the value of your Dallas Ranch in Kildare will increase at a much lower rate than an apartment or terraced house in Dublin.

Kersh

In fairness though, do you really think its gonna keep going up. It cant keep rising indefinitely. Else most people would be priced out forever as wages isnt rising that much. then what? I wouldn be buying to make money, thats why i want my big house, with big garage (car collection is getting big). If I buy for 310k, and in 5 years its worth 400k, then great big deal, its the fact that it cost 310k in the first place. I just think its madnss that people buying now are paying up to 1400eu a month for a house, stuck to another house....
So.. this property ladder. Say i buy in 06, a 3 bed house for 300k. In 08 its worth 340k, i sell it , right, but the prices have kept going up and all i can buy is a similar house for 340k, rather than a 4 bed house, which has now gone up to 400k - i still cant afford it, so all ive really done is paid people to sell my house, .... more like a property swap. I cant see how you can trade up...

magpie

In fairness though, do you really think its gonna keep going up

What makes you think it isn't?

Even if it doesn't, don't you think it more likely that prices will even out rather than crash?

Demand is still outstripping supply, so prices are continuing to go up.

Kersh

Surely, if interest rates rise, people will be under pressure , and will find it difficult to pay their mortgage.
It just doesnt make sense to me - in 5 years time a mortgage will be 2k a month, many people dont even earn that.....

ButtermilkJack

Kersh wrote:

...So.. this property ladder. Say i buy in 06, a 3 bed house for 300k. In 08 its worth 340k, i sell it , right, but the prices have kept going up and all i can buy is a similar house for 340k, rather than a 4 bed house, which has now gone up to 400k - i still cant afford it, so all ive really done is paid people to sell my house, .... more like a property swap. I cant see how you can trade up...

You buy for €300,000 in 2006. Let's say for arguements sake 92% mortgages here. So, 1st mortgage is €276,000. In 2008, you sell for €340,000. You owe the bank €270,000 (ish!). That's €70,00 for your pocket! Now you buy a €400,000 4-bed. €400,000 - €70,000 = €330,000. That's an 82.5% mortgage.

See where I'm going...

That's the ladder. You gradually get where you're going! And hopefully your mortgage reduces along the way.

Kersh

When will I ever have it payed off, i now owe more than i originally owed...........and still 30 years to go.

ButtermilkJack

Kersh wrote:

When will I ever have it payed off, i now owe more than i originally owed...........and still 30 years to go.

Yes, but that's what you have to expect if you want to 'trade-up'. You only use it as a stepping stone. Eventually you get the property you want, and you stop there. Your salary should continue to increase and your mortgage payments will seem like small change in years to come.

If you're really against the idea of buying, and would be happy outside the commuter belt, then buy a plot of land in cavan and self-build a mansion for €400k. Complete with a ten-car garage

Kersh

Your last suggestion sounds like my dream tbh. Im doing the ladder thing but with cars.....
Its the 1400eu a month for 30 years that is killing me... so trading up to pay even more is not what im into. I dont really want to bother with the making money aspect of it. I want a house, away from people, with space for at least 3 cars, and a big driveway.

delly

The 1400 a month is a big number to get your head around all right, but if your going to be paying the same amount on rent and getting no return, what harm can buying be? Look at it as a pension plan just in case you want to emigrate to Austrailia to retire when your 60.

I would never have dreamed i'd be in the house i currently am, but it would not have been possible if i didn't buy the first shoebox in Swords. Trust me, its a no lose situation. There will always be people willing to pay the money for four walls and a roof.

jimmycrackcorm

In ten years time you will likely be in a position to pay more on your mortgage and pay it off earlier. I bought on a 25 year mortgage 5 years ago and now I'm going to remortgage to change lenders, do some debt consolidation, do up the kitchen and yet overpay my mortgage so that I'll be finished in 6/7 years or less.

5 years ago I baulked at the house price. And yes there were fears of a price crash then also.

ButtermilkJack

Kersh wrote:

Your last suggestion sounds like my dream tbh. Im doing the ladder thing but with cars.....
Its the 1400eu a month for 30 years that is killing me... so trading up to pay even more is not what im into. I dont really want to bother with the making money aspect of it. I want a house, away from people, with space for at least 3 cars, and a big driveway.

Oh that's my dream too mate. But unfortunately the career has me tied to Dublin for the near future anyway. Would love to self-build though!

Kersh

Hmmm - you guys are dragging me in with yous.......... 1400eu a month is a lot.... but then again....

magpie

You're obsessing over this "paying it off" idea. The point is you could easily be spending that €1400 per month on rent, if you're paying it into a mortgage then you are developing equity which you can do whatever you want with.

In 5 years time you can sell the house, take your €70k equity (or whatever) and go live on a beach in Thailand for $1 a day and all the grass you can smoke, or you can invest it in another house and trade up - but if you don't have a mortgage and you continue to rent then you'll be in exactly the same position in 5 years time. Nowheresville

Kersh

I know......:( . Im looking.... I just think its a bit mad. I have plenty of equity in cars.... if i sold them all I would have 70k odd..... maybe even 80k. But I like em. I like to live and spend my money now... not tie it all up in a house. But I do think ill have to sooner or later.

ButtermilkJack

magpie wrote:

...go live on a beach in Thailand for $1 a day and all the grass you can smoke...

If only.....

magpie

If only.....

Amen brother. If only I could figure out a way of paying my mortgage while sitting on a beach in Thailand...

cltt97

I'd say it's now or never. It's predicted that the average house price in Dublin will rise to 500K by the end of the year. I've been looking at houses for a while and even the ugliest of houses attract potential buyers like mad because there is so much demand.
If you can buy, buy. Not that many people will be able to buy for much longer, just imagine what the rental market is going to become like when people simply can't afford to buy anymore and have to go renting.
Go onto the banks' webpages, most of them have mortgage calculators and you can work out what your repayments will be. It all depends on income, age, etc. It doesn't have to be 1400 Euros a month - especially if you're looking around 300K price range.

Maxwell

cltt97 wrote:

It's predicted that the average house price in Dublin will rise to 500K by the end of the year.

What?

That can't be right - where is this being quoted?

Dub13

Maxwell wrote:

What?

That can't be right - where is this being quoted?

I heard it aswell...I think it was on the radio.

Kersh

If thats true i can forget it so. Ill go buy a Ferrari F40 for 200k sterling, and in 10 years it will still be worth that, if not more.... seriously 500k is a bit much, anyone who pays that for a 3 bed semi/terraced is a complete idiot. Thats like buying a pc for 50 grand.... is it worth it??? I think not.