AIB cuts max amount being lent to FTB by 10%

Rabidlamb

Bad news for those with mortgage approval & haven't drawn down I'd expect.
Probably good news for many in the long run but they wont see that now.

http://www.independent.ie/business/personal-finance/property-mortgages/prudent-aib-cuts-amount-it-lends-to-home-buyers-by-10pc-3083681.html

STATE-owned AIB insisted it is being prudent after it emerged yesterday that it has reduced by around 10pc the amount of money it will lend to first-time buyers for mortgages.

AIB has the lowest variable rates for mortgages with its cheapest lending rate at 2.84pc.

Now the lender has changed its rules and will only approve mortgages for those who can cope with interest rates going as high as 6pc. This "stress test rate" was as low as 5pc earlier this month.

Broker Karl Deeter, of Irish Mortgage Brokers, said that a couple with two incomes of €35,000 each, taking out a 30-year mortgage, would have been approved for €348,000 under the old rules.

But the new stress-test rules mean that the couple would now be approved for €36,000 less, or €312,000 in total.

smallerthanyou

Is that another factor then to push down house prices?

Is it just me or does 350k for an average wage couple not seem a bit excessive? If one lost job or gave up work or they have kids it's a lot to be paying back. I'm not sure I'd be willing to take on that much. 312k is still quite high I think.

Rabidlamb

smallerthanyou wrote: »

Is that another factor then to push down house prices?

Is it just me or does 350k for an average wage couple not seem a bit excessive? If one lost job or gave up work or they have kids it's a lot to be paying back. I'm not sure I'd be willing to take on that much. 312k is still quite high I think.

Struck me as being high aswell, I thought joint income assessment was gone, I'd heard 3+1 & 4+1 but the joint method is a relic of poor regulation.
So nobody ever breaks up or has children

nemo32

350,000 over 30 years... no tks!!!!

kennyb3

Still way too high. Myself and the OH earn a combined of between 15 - 25% more than the amounts quoted above and are looking at properties in the 220 - 250k (asking) range. At that level we d also have about a 12% deposit. I wouldnt even dream of getting a mortgage for more than 250k based on our salaries.

smallerthanyou

smallerthanyou wrote: »

Is that another factor then to push down house prices?

Is it just me or does 350k for an average wage couple not seem a bit excessive? If one lost job or gave up work or they have kids it's a lot to be paying back. I'm not sure I'd be willing to take on that much. 312k is still quite high I think.

It might, but the reality is - until the regulatory body is up and running and the property market has some clarity and visibility regarding actual sale prices it is impossible to say what will and will not have an impact on bottom line figures.

If we are trying to get the market going - really this should be a priority. Delaying from June to December in my opinion is poor form.

Lollymcd

Does anyone know of an online calculator where you can put in how much you want to repay and find out how much you can borrow rather than the other way around?

Ideally we would like to repay about €1200 per month. Our combined income is €100,912

Is this reasonable?

smallerthanyou

Lollymcd wrote: »

Does anyone know of an online calculator where you can put in how much you want to repay and find out how much you can borrow rather than the other way around?

Ideally we would like to repay about €1200 per month. Our combined income is €100,912

Is this reasonable?

Sorry, haven't seen such a calculator. To me that sounds very affordable on that salary however pretty much all interest rates are variable these days so even if you fixed for the first year at 1,200 it could be much higher in a few years when interest rates start to rise. Anyway I'm sure someone much more knowledgable that be can give better advice!

wench

Lollymcd wrote: »

Does anyone know of an online calculator where you can put in how much you want to repay and find out how much you can borrow rather than the other way around?

You could try the calc here
http://www.drcalculator.com/mortgage/ie/

Fix the repayment and length, and then see how the interest rates will affect the amount you could borrow. Make sure to go a few % higher than current rates.

killers1

Lollymcd wrote: »

Does anyone know of an online calculator where you can put in how much you want to repay and find out how much you can borrow rather than the other way around?

Ideally we would like to repay about €1200 per month. Our combined income is €100,912

Is this reasonable?

What term do you want to borrow over?

Lollymcd

killers1 wrote: »

What term do you want to borrow over?

I think I would prefer 25 years as, and maybe I'm wrong, I believe the interest would be less?

I know this doesn't amount to a very big mortgage but I'd prefer to work with what I want to repay rather than what the bank are willing to lend to me!

killers1

Lollymcd wrote: »

I think I would prefer 25 years as, and maybe I'm wrong, I believe the interest would be less?

I know this doesn't amount to a very big mortgage but I'd prefer to work with what I want to repay rather than what the bank are willing to lend to me!

€1,200pm (before tax relief at source) over 25 yrs @ variable rate 3.24% equates to a mortgage of €246,000

Lollymcd

killers1 wrote: »

€1,200pm (before tax relief at source) over 25 yrs @ variable rate 3.24% equates to a mortgage of €246,000

WOW! That's rather a lot!

Thank you for working that out for me!

killers1

Lollymcd wrote: »

WOW! That's rather a lot!

Thank you for working that out for me!

No probs...