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Getting a mortgage in the bust

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    #32
    SimpleSam06
    Closed Accounts Posts: 4,048 ✭✭✭SimpleSam06


    It was cheaper by 100 euros a month to pay a mortgage plus interest rates, with a €30k deposit, than to rent in the area? Where exactly is the area?


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    #33
    aquascrotum
    Registered Users Posts: 466 ✭✭aquascrotum


    SimpleSam06 wrote: »
    It was cheaper by 100 euros a month to pay a mortgage plus interest rates, with a €30k deposit, than to rent in the area? Where exactly is the area?

    Bettystown. Mini disclaimer - I'm going only on figures given by a mortgage broker in full sales pitch mode.


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    #34
    Climate Expert
    Closed Accounts Posts: 1,393 ✭✭✭Climate Expert


    aquascrotum wrote: »
    Bettystown. Mini disclaimer - I'm going only on figures given by a mortgage broker in full sales pitch mode.
    3 bed semi in Northlands

    Rent: 1100pm
    www.daft.ie/2600213

    Buy: 250K
    www.daft.ie/1413352

    30 year mortgate with 30K deposit works out at €1,298.71 with Bank of Ireland on a variable 5.6% APR.


    I'll admit that is one of the closer mortgage to rental areas but still far short of being cheaper to buy.


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    #35
    aquascrotum
    Registered Users Posts: 466 ✭✭aquascrotum


    Climate Expert wrote: »
    3 bed semi in Northlands

    Rent: 1100pm
    www.daft.ie/2600213

    Buy: 250K
    www.daft.ie/1413352

    30 year mortgate with 30K deposit works out at €1,298.71 with Bank of Ireland on a variable 5.6% APR.


    I'll admit that is one of the closer mortgage to rental areas but still far short of being cheaper to buy.


    My original post made it clear that the claim "cheaper to buy" was based on a FTB couple claiming mortgage relief, in this instance (apologies if the info given to me is wrong) in the region of 350/month, hence bringing the monthly outgoing to nearer the 900/month mark based on your mortgage calc.


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    #36
    Climate Expert
    Closed Accounts Posts: 1,393 ✭✭✭Climate Expert


    aquascrotum wrote: »
    My original post made it clear that the claim "cheaper to buy" was based on a FTB couple claiming mortgage relief, in this instance (apologies if the info given to me is wrong) in the region of 350/month, hence bringing the monthly outgoing to nearer the 900/month mark based on your mortgage calc.
    I didn't read your earlier post. In any case interest relief is not that much and you have to pay maintenance fees as well. Renters also get some form of tax relief but its not as much.

    There are still very few places like Bettystown. My last place was probably selling for about 250k but we were renting it for 680 a month. In these situations you'd be crazy to buy. And you'd tell me the thousands I have saved (50K, 100K?) in the last few years is dead money?


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    #37
    CiaranC
    Closed Accounts Posts: 6,300 ✭✭✭CiaranC


    aquascrotum wrote: »
    My original post made it clear that the claim "cheaper to buy" was based on a FTB couple claiming mortgage relief, in this instance (apologies if the info given to me is wrong) in the region of 350/month, hence bringing the monthly outgoing to nearer the 900/month mark based on your mortgage calc.
    There is also the small matter of the 30k deposit youd still have for investment if you rent...


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    #38
    aquascrotum
    Registered Users Posts: 466 ✭✭aquascrotum


    Climate Expert wrote: »
    I didn't read your earlier post. In any case interest relief is not that much and you have to pay maintenance fees as well. Renters also get some form of tax relief but its not as much.

    There are still very few places like Bettystown. My last place was probably selling for about 250k but we were renting it for 680 a month. In these situations you'd be crazy to buy. And you'd tell me the thousands I have saved (50K, 100K?) in the last few years is dead money?

    Firstly, I'm 100% with you on the fact that it's crazy to buy - I was relating a sales pitch that was given to me last weekend for the purposes of the OP, as his query related to how easy or otherwise it is to get a mortgage currently. I wouldn't touch the property market with a barge pole at present (also as outlined in my original post).

    Secondly AFAIK maximum tax relief per annum for a FTB couple as of 1/1/08 is 20k - or E333.33/month?

    To CiaranC, I'm inclined not to lock my deposit up in a high yield scheme as I may need it if my job goes t*ts up.


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    #39
    ZYX
    Registered Users Posts: 882 ✭✭✭ZYX


    Climate Expert wrote: »
    3 bed semi in Northlands

    Rent: 1100pm
    www.daft.ie/2600213

    Buy: 250K
    www.daft.ie/1413352

    30 year mortgate with 30K deposit works out at €1,298.71 with Bank of Ireland on a variable 5.6% APR.


    I'll admit that is one of the closer mortgage to rental areas but still far short of being cheaper to buy.

    In fairness the one for rent has one bathroom, the house to buy has 3 bathrooms. Also you should not count loan repayments only interest payments when comparing the 2. You should also ignore the deposit and pretend entire amount is borrowed.
    So at 5.6% the cost per year of buying is €14,000 per year less interest relief. Cost of renting is 13,200.


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    #40
    SimpleSam06
    Closed Accounts Posts: 4,048 ✭✭✭SimpleSam06


    ZYX wrote: »
    Also you should not count loan repayments only interest payments when comparing the 2. You should also ignore the deposit and pretend entire amount is borrowed.
    Very true.

    When buying as a whole is cheaper than renting, it enters a different ballgame, whereby if you find yourself unemployed or need to move in order to get gainful employment, you can rent the entire house and pay the mortgage that way. Of course that doesn't take into account fluctuations in the rental rate, empties, taxation on rental income or how that might affect the benefits accrued by FTB status, but worst case scenario you'll be paying €120 a week between the two of you and the rent for wherever you are living, assuming rents stay the same.

    Also its worth bearing in mind that interest payments are front loaded by the banks in repayments, so the longer you have it the more sense it makes.

    Its still not great value by my reckoning, needs to lose around €60k, but you might get most of that for the asking. Doable, really, if the area isn't a burned out car warzone. I'd expect to see more properties making sense in this kind of equation as time goes on.


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