Brendan Burgess, founder of askaboutmoney.com
Last year, the Central Bank set down the following rules in regards to obtaining mortgages.
First-time buyers have to have a deposit of 10% on homes valued up to €220,000, and a 20% deposit on any excess over €220,000; other home buyers must have a 20% deposit on the entire amount.
The Central Bank is reviewing these rules and is to hold a press conference on its review this afternoon.
Further to this…
On Today with Seán O’Rourke this morning.
Brendan Burgess, founder of askaboutmoney.com, and Michael Dowling, chairman of the Irish Brokers’ Association mortgage committee, spoke about the rules.
From their discussion.
Brendan Burgess: “The rules are helping first-time buyers if anything and that might sound, that might appear difficult to understand for somebody who’s trying to buy a house but if I’m the only one that can get 100% mortgage, then it’s in my interest to get a 100% mortgage but if we give everybody 100% mortgages, all that will happen is the price will go up. And that’s not good. The vast majority of first-time buyers are responsible and they understand that they need to save money and acquire a deposit. And if you give, what I’d call, you know, the irresponsible borrowers a 100% mortgage, you push the prices up for everybody. There’d be no increase in supply so it just not does not help the overall problem.”
“When I bought my first house and I’m sure it’s the same for you, when you bought your first house, you had to save for a few years, you didn’t get your first job, and just go out, borrow a 100% and buy a house.”
Sean O’Rourke: “The problem was though, or the problem now is, is that people have to spend so much on renting properties that they don’t have anything left to save.”
Burgess: “No, that’s not actually, that’s not true. I mean if you look at the figures. I mean, people say a guard and a nurse can’t buy a house in Dublin. That’s absolute nonsense. A guard and a nurse, without about three years experience, have a combined income between them of about €65,000. Paying rent for an apartment in Dublin and with their living expenses, they would save around €20,000 a year. So, after three years, they would have a deposit of €60,000, that’s with no previous savings, and with no help from parents or anywhere else. They would save up €60,000 over three years… the point about it is, they would not be able to go out every night of the week, they would not be able to buy coffee on the way in to work or three times a day. They would have to budget, they would have to save. But if they don’t do that, and they’re given a 100% mortgage instead, they’d be scrimping and saving for the rest of their life.”
And what about single folks?
Right so.
Listen back in full here
Central Bank to announce outcome of mortgage rules review (RTE)
UPDATE:
David Murphy, RTÉ’s business editor, reported on News At One that the €220,000 cap on mortgage lending for first-time buyers, who have a deposit of 10%, will be removed in January 2017.