20 Year Fixed Term Mortgages Available

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ivannomonet

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https://www.rte.ie/news/business/2021/0513/1221325-finance-ireland-mortgages/

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Seems like something people have been looking for for years.
 
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This is a really interesting product. 2 features that stand out to me:
1. You can keep the rate if you move house during the period.
2. As your LTV decreases over time, you benefit from the lower rate applicable for that lower LTV.

20 years fixed from 2.6%.

They've also announced 10 & 15 year rates.
 
RedOnion said:
This is a really interesting product. 2 features that stand out to me:
1. You can keep the rate if you move house during the period.
2. As your LTV decreases over time, you benefit from the lower rate applicable for that lower LTV.

20 years fixed from 2.6%.

They've also announced 10 & 15 year rates.
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Wonder what the overpayment T&Cs are?
 
evil_g said:
Wonder what the overpayment T&Cs are?
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Yes, will be interesting to see. They allow 20% overpayment per annum on their existing products, so will be interesting to see if they continue that.
Hopefully one of the brokers will be able to clarify when they get the details.
 
Up to 10% according to the Times.

irishtimes.com/business/financial-services/finance-ireland-to-offer-long-term-fixed-rate-mortgages-in-irish-market-1.4563959
 
Here is the press release

Finance Ireland launches 20-year fixed rate mortgage


* Twice the length of longest fixed rate currently available
* Rates from just 2.60% (2.66% APRC)
* Range of terms and options give unprecedented flexibility


Thursday 13th May 2021. Finance Ireland has announced a major innovation for the Irish mortgage market. The company – which entered the residential mortgage market in 2018 – has launched a range of long dated fixed rate mortgages for owner occupiers.

The maximum term of 20 years is twice as long as currently available to Irish mortgage customers. It will mean that many home buyers may be able to have a fixed rate for the full term of their mortgage.[1]

The fixed rate terms launched today are for periods of 10, 15 and 20 years. The fixed rates range from 2.40% to 2.99% (APRC: 2.58% - 3.06%) depending on Loan to Value (LTV) and the fixed term period. A 20 year fixed rate mortgage for up to 90% of the value of the home is priced at just 2.99% (APRC: 3.06%).

Finance Ireland has developed these products in conjunction with their long standing residential mortgage funding partners M&G Investments. The mortgages have a range of unique features never available to Irish mortgage customers before.

4 Key Features:

Unprecedented fixed rate periods
The fixed rate terms available are for 10,15 and 20 years and for mortgages up to 90% LTV. Currently, the longest fixed rate available in the Irish market is 7 years with a handful of providers offering a term of 10 years but capped at an LTV of 80%. The Finance Ireland fixed rates are available for up to 90% LTV mortgages.

Rate portability
Customers can move their mortgage to a new property during the term of the fixed rate without incurring any penalty – subject to normal underwriting.

Overpayments allowed
Customers will have the option to pay back a lump sum of up to 10% of their outstanding mortgage balance, without penalty, in each year of the fixed term.

Reducing rates as LTV improves
The fixed rate will decrease as the loan is paid down versus the property value. LTV (loan-to-value) driven reductions to a customer’s fixed rate will be downward only – rates will never increase even were there to be a deterioration in house value versus loan outstanding
 
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Brendan Burgess said:
Hi Red

Where are you getting this information?

Are you saying that if you fix today at <70% for 2.75% and house price rises bring your LTV to <60%, your rate changes to the <60% rate of 2.6%?

Brendan
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It's in the IT article linked above, though not very clear:

"The fixed rate can also be decreased as the loan is paid down versus the property value"
 
I wonder in a couple of years time will Irish banks have to hold less capital / reserves as the 2008-2010 crash fades from ECB historical modelling and then there might be more competitive pressure to reduce mortgage interest rates closer to rates seen in Germany
- 5 year fixed 1.05%
- 10 year fixed 1.10%
- 15 year fixed 1.39%
- 20 year fixed 1.72%
- 25 year fixed 1.95%
- 30 year fixed 2.08%
 
Good product especially for those with lower LTVs. Given competition is exiting the market the 90% LTV rates are comparable to Bank of Irelands 1 yr fixed rate. I would definitely consider if I was in 70% and less LTV bucket.

Rates are still dropping in Ireland but with competition leaving the market, it's weighing up the risk of missing out on short term interest rate decreases during 1-2 yr fixed rate periods vs long term increases.
 
NoRegretsCoyote said:
They'll still have to take account of the difficulty of repossession. This hasn't changed, even though mortgages which originated post 2012 are much better quality of course.
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I think this is a fundamental difference in the irish market which blocks us achieving rates available in other countries. Would informed people agree? I suppose it becomes less relevant if entire developments are now going to be bought by institutions. ;)

The product is obviously intended to be profitable, so does it not suggest that they predict rates to continue to reduce- in which case it might be time to not lock into a 10 year plan?
 
10 year rate is not that competitive compared to Avant's 7 year. Good innovation for the market though.
 
Itchy said:
10 year rate is not that competitive compared to Avant's 7 year. Good innovation for the market though.
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True, but Avant's lending criteria are very strict; far more so than Finance Ireland. Horses for courses.

It will be interesting to see if any other of the Irish lenders launch competing rates.
 
presidenttttt said:
The product is obviously intended to be profitable, so does it not suggest that they predict rates to continue to reduce- in which case it might be time to not lock into a 10 year plan?
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I dont think anyone could reasonably predict what will happen between now and 2041, who could have rightly guessed back in 2000 what would have happened between then and now. Certainly I doubt anyone would have guessed that fixed rates would end up lower than variable.

Personally I'll very strongly be considering this when my current fixed 2 year is up, not because i think rates will go up, nor factoring that rates could go down, but because I love the idea of the surety of my mortgage cost, at a "decent" rate gives me over that time, and I would bet strongly on my salary going up over that period proportionally making the mortgage smaller and smaller. I think it's fantastic news
 
300k mortgage taking a 20 year term would be €1600 - €1660 a month (depending on ltv) and you'd never have to worry about it changing ever. That will be a winner for them and I said it was something Avant should have done when they entered the market
 
ThatNewGuy said:
I love the idea of the surety of my mortgage cost, at a "decent" rate gives me over that time
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Would you still love the idea if 3 to 5 years into your 20 year fixed rate the variable rate dropped below the fixed rate and stayed that way???
 
Cervelo said:
Would you still love the idea if 3 to 5 years into your 20 year fixed rate the variable rate dropped below the fixed rate and stayed that way???
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Yes. Getting a 20 year mortgage for less than 3% at this time is well worth considering for anyone.
 
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