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So why is it that I need a mortgage?

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  • Registered Users Posts: 360 ✭✭Xidu


    B4 I was 35, I really had to watch spending and plan every expense to save up for 1st house as I was only getting base pay and tiny bonus.

    after 35, my career took place and I am getting good shares yearly and that’s when I can have decent savings.

    43 this year and just bought a 2nd house for investment.



  • Registered Users Posts: 88 ✭✭bigmac3


    🤣🤣🤣🤣 were you searching for threads that you could post in and let people know about the second house?



  • Registered Users Posts: 625 ✭✭✭Cal4567


    Of course you don't realise because greed has taken over that you as one of the 'haves' are making it much more impossible for the 'have nots' by what you are doing, for them able to buy a home for themselves in the first place?

    It's not just the vulture funds who have contributed to the finalisation of housing, but everyone who owns a second home. You don't for one minute realise you are part of the problem.

    An uncomfortable truth, but a truth all the same. When so many treat housing as an investment, and are even encouraged to do so, well we get to scenarios where we are now.



  • Registered Users Posts: 360 ✭✭Xidu


    It’s not like that at all.

    when I was in my 20s I was like everyone else living in parents house. In order to save money, I don’t go to abroad holidays at all for years just worked extremely hard. Built 1st house through 3 years while I have some saved up, The house stopped for 6month in between when I ran out of money. The total cost of 1st house was 150k only that’s back in 2013-2016. So I didn’t need to borrow money from bank.

    I bought the 2nd house the reason is I really don’t know other ways to keep value, while inflation is so crazy. Am I not allowed to invest in something?



  • Registered Users Posts: 1,805 ✭✭✭Rothmans


    People are entitled to use their own money however they wish. Begrudgery isn't really the strongest argument against someone buying a house. It's not OP's responsibility to help you buy a house.


    Furthermore, plenty of people out there are looking to rent. Not everybody is at the stage in their life where they want to buy a house. Does your desire to own your own home trump their need to rent a place? The housing market isn't all about first time buyers you know.


    PS - what you call greed, others call good financial planning.



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  • Registered Users Posts: 625 ✭✭✭Cal4567


    It's not begrudgery. It's just not appreciated that the activities of many, be it corporations or individuals have contributed to our present housing predicament.

    And yes, greed has been the motivation.



  • Registered Users Posts: 19,264 ✭✭✭✭Donald Trump


    Why do you need a mortgage?


    Might I guess that you don't have enough money saved yourself to buy a house with cash?



  • Posts: 18,749 ✭✭✭✭ [Deleted User]


    Such begrugery

    if someone has an investment property, that's what it is, an investment for their future. There will always be people who want to rent.

    not everyone needs to own their own home



  • Posts: 18,749 ✭✭✭✭ [Deleted User]


    Or sensible financial planning. My landlord owns my place as his retirement policy. What is wrong with that?



  • Registered Users Posts: 625 ✭✭✭Cal4567



    A simple explainer. Around the mid to late 1990s, following a decade or so after the period of neoliberalism taking hold where many secured their own housing for the first time, there was a sharp increase in credit for both individuals to buy second or third properties, but also for institutions to aggressively enter the residential market. It very quickly became the thing to do, following a period before that where for example buying shares was very common.

    In Ireland, this coincided in Ireland with the Celtic Tiger explosion. In a few very short years, housing had become not just a place to live in, but to invest in. No longer just a home, but now a product to exploit.

    Some social commentators at the time did query this development, fearing it would lead to an affordability crisis. Soon enough, London and New York being clear examples, that began to show. It didn't really begin to show its effects until around 2016 in Ireland. Starting off from the station in first gear. We're now rattling along in 5th gear at 100 miles per hour.

    Some are now beginning to see the results of this. The next generation being priced out etc.

    We've been peddled this argument 'sound financial planning' by the very same industry that benefits most from the process.



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  • Registered Users Posts: 13,505 ✭✭✭✭Mad_maxx


    Always borrow something, relative to inflation, debt is very cheap still



  • Registered Users Posts: 1,076 ✭✭✭JohnnyChimpo


    btw you're in a much better position if you reduce the repayments and keep the longer term. The reason being you can almost always overpay by a certain amount, but if you fall on hard financial times you may struggle with your repayments. Of course, you have to then commit to making those overpayments...



  • Registered Users Posts: 10,837 ✭✭✭✭Furze99


    I'm inclined to agree with you, though I wouldn't always call it 'greed'. There is a view out there though in Irish society that if you have a home and a bit of spare cash, that you buy an 'investment' property to pay for your pension etc. It is essentially speculation and unnecessary - for the good of society as a whole, the investment property would be better off available to those wishing to purchase a home.

    What is/was galling though was to see some of these speculators squealing after the last crash that the values of their investments had fallen and they were going to lose their 'pension'. I had zero, zero sympathy for them, though I suspect many were dealt with leniently by their lenders at the expense of other taxpayers.

    If you want a pension, then invest in a PRSA or some pension scheme.



  • Registered Users Posts: 13,505 ✭✭✭✭Mad_maxx


    The Irish state punishes investment in equities etc ,this further drives people into property



  • Registered Users Posts: 10,837 ✭✭✭✭Furze99


    Maybe but investing in property should also be understood as gambling. The value may rise & fall etc.

    The way it is, you'd swear Irish people think they have a God given right to property going up & up & up in value. And if doesn't, they whine about needing bailouts and their 'pensions'. F*** them the rest of us say.



  • Posts: 0 [Deleted User]


    I know what you mean OP. Sure why would anyone ever get a loan of any amount of money when you can simply pay for it outright?

    Seems mad to get a new car on PCP when you could just pay 45k to the dealer anyway. Need an extension built? Who needs a home loan, just sling 100k at the builders and you don't need to deal with the banks. Simple, really.

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  • Registered Users Posts: 20,937 ✭✭✭✭Ash.J.Williams




  • Registered Users Posts: 8,368 ✭✭✭Ray Palmer


    This is really only true if you ignore the history beforehand and make claims that something is new when it is not. This whole notion that property suddenly became financialised is nonsense. Land and property have always been assets and it is actually only a brief time where it was open to so many people. In Dublin very few people owned their homes when my grandfather was a child.

    It would be better for all if more owned but it isn't something that is certain. Ireland was always going to get the same issues as any developed country as we caught up. We used to have the highest home ownership rate in the world not that long ago. We weren't going to stay there forever



  • Registered Users Posts: 1,244 ✭✭✭Brid Hegarty


    That's a good point. But if inflation is strong enough to cancel out what you'd save on the interest, then don't the bank lose? So if the euro happens to stay strong over the course of time that I'd be paying off the mortgage, then that would mean that inflation wouldn't hit my savings?

    If a person gets a mortgage, they're basically hoping that inflation is high, as it'll mean they'll have less to pay off.



  • Registered Users Posts: 920 ✭✭✭Anaki r2d2


    Brid, a simple question for you.

    How should someone buy a very average 3 bed house in ireland at 350,000 as an example?

    Do you have a suggestion, apart from getting a mortgage is stupid?



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  • Registered Users Posts: 34,695 ✭✭✭✭o1s1n
    Master of the Universe


    A person gets a mortgage to actually be able to buy a property, it has nothing to do with 'hoping' anything about inflation. Without a mortgage, most people can't buy any property at all.



  • Registered Users Posts: 3,978 ✭✭✭3DataModem


    There is no "end result" in life. You can wait 10 years to have a great house you paid cash for, or you can live somewhere for the next 10 years you own. One costs you interest, one doesn't. Simple choice.



  • Registered Users Posts: 3,639 ✭✭✭RichardAnd


    In 1997 my parents sold their home in Dublin 3 for 75k pounds. The same house (based on neighbouring properties) was worth 500k euro in 2007. That is an enormous increase in just ten years. What happened? Well, one could say that demand rose, and that is certainly true. However the truth is that the price rose because the amount of currency available to buy went through the roof due to cheap credit. Things only reversed when credit became less easy to acquire in 2008, but after the last few years of wild money printing, prices of everything are up.

    In the past, it was possible to save money and get a decent rate of interest such that it was worth it. My grandfather was a great saver, and he had a lot of bonds and high interest (relatively speaking) accounts back in the day. Today, saving money is only worthwhile in the short-term. In the long term, one needs to hold an asset or they are will lose the purchasing power of their wealth. Housing is just one more asset, and in recent years it have proven to be a very lucrative one.

    As long as we're using a fiat currency, more and more funny-money will be created, and prices of everything will rise. The social costs of chasing the infinite growth model are already ruinous, and I don't think that things will improve. One big worry that I have is that as younger people are faced with an increasingly bleak future, there is a very real danger of extremist ideology taking hold. I've seen communist stickers all over the place on lamp posts, and whilst I don't think there's any chance of a communist party's rising in Ireland in the near future, this utterly cancerous ideology could very well capture the minds of younger people and idiots who don't know any better.

    I'm not too optimist about the future, if that were not obvious...

    Post edited by RichardAnd on


  • Registered Users Posts: 1,244 ✭✭✭Brid Hegarty


    I know but if I bought a small ‘transition’ house for say 8 years (before buying my main house), and if there was no increase in property values during this time, then that would very strongly make me decline getting a mortgage. Obviously no one knows the future, but if property increased 4% per year during time period of your mortgage, then that would stand in favour of getting a mortgage, as you’d otherwise lose a good chunk of the value you’d end up paying for the mortgage anyway.

    Post edited by Brid Hegarty on


  • Registered Users Posts: 920 ✭✭✭Anaki r2d2


    This post makes no sense. What does "would very strongly make decline getting a mortgage" mean?

    If you have a house for 8 years, then that is rent that you have not needed to pay for 8 years. You either have loads of cash to buy a house out right or you have paid down some of a mortgage.

    Either way you have equity to buy the next house. Perhaps less if property increases in price. As the house you buy second has also increased.



  • Registered Users Posts: 34,695 ✭✭✭✭o1s1n
    Master of the Universe


    Define 'small transition house' and how are you going to afford this property without a mortgage?

    Short of it being a caravan in a field or you having being left large sums of cash.



  • Registered Users Posts: 1,076 ✭✭✭JohnnyChimpo


    this is a very stupid thread, apparently for people to humour a semi-literate attention seeker



  • Registered Users Posts: 2,115 ✭✭✭witchgirl26


    A lot of people bought "first time small houses" or "small transition houses" to get themselves on the property ladder & got stuck there for a lot longer than they wanted. I'm not saying people should go out & buy 4 bed semi-d's as their first home if there's only them & maybe a partner but they do really need to look at it as a home & not just a halfway house. Buying a house is not just about the future value of it but about giving yourself a home that you like & enjoy in the now. And buying a home now would not prohibit getting a mortgage in the future if that's what you meant by "would very strongly make decline getting a mortgage". Especially if you bought it outright. You'd be classed as a first time buying by the banks & therefore able to benefit from the 10% deposit etc.



  • Registered Users Posts: 3,639 ✭✭✭RichardAnd


    Indeed. When I was looking last year, I viewed quite a few such houses. One that stuck in my mind was a duplex in Celbridge. It was one of hundreds of such houses, and it was the size of a postage stamp. The one that I saw was, according to the EA, occupied by a family with two children. It was only about 70m2, so that must have been very cramped. A lot of people got stuck in negative equity of such properties, and I guess the fear of that is still around.

    That said, few people get the ideal house the first time around, if indeed there is an ideal home.



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  • Registered Users Posts: 2,115 ✭✭✭witchgirl26


    I think a home is what you make it but you definitely need to make sure there's enough space for everyone to live there. If I was buying as a single person, I'd be looking to make sure it could accommodate 2 people comfortably in case of a partner. If I had a partner, I'd look for somewhere that could be a comfortable enough home for a young family. I think you do need to look a little in the future but look at it as a home rather than an investment solely.



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