Are these mortgage repayments too much?

Messigoat

We have been advised we may get a mortgage of €320k with repayments of €1595 on 3 years fixed rate at 4.90% over 35 years. Do these repayments seem too much for this size mortgage?

Put in another thread but putting in here also in case this one is more appropriate.

Facthunt

What’s the overall term of the mortgage? 20 years? 30years ?

listermint

https://www.boards.ie/discussion/2058322745/are-these-mortgage-repayments-too-much

Your mortgage provide will stress test you if its too much you won't get the mortgage. The rest of the affordability is down to you and you're spending lifestyle versus income.

Messigoat

That would help haha, it's over 35 years.

Facthunt

€1595 a month is spot on! If you had to pay the same rate over 35 years you’d end up paying back €669752 in total!

herbalplants

https://www.boards.ie/discussion/comment/121373298#Comment_121373298

Shocking how much you pay the bank back.

RichardAnd

Here's a handy site:

https://www.ebs.ie/mortgages/mortgage-repayment-calculator

BAsed on what you've said above, you're repayments are pretty much what I would expect.

Messigoat

Thanks all.

I understand the calculations of the repayments are correct but does the interest rate seem too high or is that just standard now?

mickdw

https://www.boards.ie/discussion/comment/121373318#Comment_121373318

Not really when you consider inflation etc.

If for example you didn't buy now with mortgage and started saving 1595 per month until you could buy with savings

20 years savings 382800. This wouldn't buy a house in 20 years that's currently 320k

25 years savings 478500. Doubtful that this would buy house in 25 years that's currently 320k

30 years savings 574200, again unlikely to buy the house for that figure in 30 years so mortgage makes sense. You also get to move into the house now via mortgage route compared to renting while saving so mortgage is great value really.... as long as you can afford it.

gmisk

https://www.boards.ie/discussion/comment/121373366#Comment_121373366

4.9 percent is high, switcher.ie shows some of the options.

https://switcher.ie/mortgages/first-time-buyer-mortgages/

Messigoat

This is what I was thinking. We went through a broker and this is the best they can get apparently. We're thinking about looking around other brokers.

https://www.boards.ie/discussion/comment/121373400#Comment_121373400

Why use a broker at all?

Messigoat

https://www.boards.ie/discussion/comment/121373411#Comment_121373411

A decent bit of my salary (roughly €7k-€10k) is commission based so figured it would be better to go through a broker to see which providers would take this into consideration.

They advised that most would need me to be in my job 3 years before they would take of the my commission into account (I've been in my job 2 years) apart from PTSB who would take 20% of it which is the mortgage offered at the 4.9%

I wouldn't have any idea myself who would be best for this.

Most of them would take the average of the last 3 years, year 1 being 0 in your case

mojesius

Looks like a high interest rate. Bear in mind if you're buying a newer house/ one with a BER B3+ rating, you could qualify for a lower interest rate (look into 'green mortgages '. Many of the main lenders offer them.

Messigoat

Good to know, on both above, thanks!

Newbie20

4 years fixed higher value rate with AIB is 4.55% and as said above, if it’s above B3 you can get Green Rate for 5 years at 3.85%

both of those assuming loan to value is over 80%? Usually can get a bit better is LTV is lower.

Funnily we took out a mortgage of that exact figure, 320k 4 years ago

Padre_Pio

https://www.boards.ie/discussion/comment/121373318#Comment_121373318

Yeah, but at the same time it's the cheapest loan you'll ever get.

Besides, a 1600 euro repayment may seem fairly small in 20 years time.

Mellor

https://www.boards.ie/discussion/2058322745/are-these-mortgage-repayments-too-much

Are you asking if the repayments are high compared to the loan amount/rate/term? It's a bit unclear.

https://www.boards.ie/discussion/comment/121373366#Comment_121373366

This makes the question in the OP confusing.

If you want to know where how the rate stacks up you need to look at whats being offered elsewhere. There are comparison site for that.

Mellor

https://www.boards.ie/discussion/comment/121373388#Comment_121373388

There are definitely better rates. But restricting options to 3 yr fixed will limit the rate. OP should decide if that's best call.

https://www.boards.ie/discussion/comment/121373575#Comment_121373575

I think you mean LTV is below 80%. Rate is worse as it gets higher.

Fixing for 5 years will definitely improve the rate, but there it's an obvious reason why the bank happy to lower the rate over 5 years.

https://www.boards.ie/discussion/comment/121373318#Comment_121373318

As a potion of the loan amount, sure it's pretty big.

But at the same time, you basically asking a stranger to buy you a house, and with the promise of paying them back over 30 years.

If I borrow €1000 from you, and promised to pay it back by 2050....I doubt you'd be happy with €1200 back.

1

Newbie20

https://www.boards.ie/discussion/comment/121373926#Comment_121373926

No the rates I listed are for a LTV of over 80% and as I said if they have an LTV of less than 80% they can avail of better rates. You can break out of fixed now a lot of the time for no breakage fee so I fail to see a problem with signing Up for a few years to be honest.

o1s1n

https://www.boards.ie/discussion/comment/121373411#Comment_121373411

Because they're free and get you the best deal so the question should really be 'why not use a broker?'

o1s1n

https://www.boards.ie/discussion/comment/121373906#Comment_121373906

700 is absolutely nothing in this day and age for a one bed apartment! Hang onto that for as long as you can.

Ive friends who just moved into a one bed in Wicklow town for 1,800 a month as a comparison.

SteM

As long as it's an independent broker and not a tied agent I guess.

manonboard

https://www.boards.ie/discussion/comment/121373906#Comment_121373906

700 for a 1 bed room apartment is only barely covering the mortgage of for 150k. It's a fantastic affordable rent that allows you to save and live well. I do highly encourage you to keep that set up and be sure to be saving so you can eventually have your own property (for capital appreciate reasons)

o1s1n

https://www.boards.ie/discussion/comment/121373400#Comment_121373400

We've used GMC mortgage brokers a few times now to work out some tricky deals across multiple properties and they've been great. Would recommend reaching out to them for a second opinion.

In fact with interest rates going on the up at the moment I contacted another broker after GMC got us our current rate just to double check it was the best available - the second broker confirmed GMC had actually done a really good job getting that.

So yep, doesn't hurt to get a few opinions before locking in!

Mellor

https://www.boards.ie/discussion/comment/121374037#Comment_121374037

I doubt anyone advertises LVT as “over 80%”. What was the actually rate?

Banks might allow fee free breaks in some circumstances. But I would sign a 5 year rate assume I can break whenever I want.

https://www.boards.ie/discussion/comment/121374047#Comment_121374047

They dint charge you. But Broker’s don’t work for free. The bank pays, which means the bank has to recoup that cost via customers. The recoup cost affects rates.

By all means check out a broker, but also check the market. In general cash back on the open market is better

o1s1n

https://www.boards.ie/discussion/comment/121374095#Comment_121374095

Using a broker has never affected my rate and in fact they managed to wangle some better rates than those that were currently being listed as available by the banks themselves.

I've used brokers now for the purchase of three properties and a mortgage switch (so in effect, four mortgages) and it's always worked out better than the rates I have gotten when contacting banks directly.

As I said, it's worth shopping around for sure, but if people are going to work for you at no cost to you, then you might as well engage with them to see what they can do. If you're not happy with the rate they get you it's not like you are bound to taking it.

listermint

https://www.boards.ie/discussion/comment/121374095#Comment_121374095

Various banks only work with brokers now as it offloads administration costs.

We got the best market rate 2 years back via broker and it was seemless.

https://www.boards.ie/discussion/comment/121373868#Comment_121373868

I currently have a PCP "loan" at 0% ?

o1s1n

https://www.boards.ie/discussion/comment/121374625#Comment_121374625

PCP isn't really a loan though, it's a 'personal contract plan' where you pay off the depreciation in the car over a set time period. You're not paying off a car loan.