Dilosk relaunch Buy to Let product and ICS Mortgage brand

B

Bronte

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Well they are back:

http://www.irishtimes.com/business/...age-fund-targets-property-investors-1.2949454

new €200 million buy-to-let mortgage fund is set to target property investors looking to either buy into the market or refinance their existing investment properties – and it even comes with a 10-year interest-only option

I have such deja vu on this. How many threads did we have of posters not understanding them, not realising they'd have to pay the capital off, having the repayments suddenly go up after x number of years.

Anyone still think they are a great idea? Were they ever a great idea.
 
5.25% (!) variable for LTVs over 50%.

Who in their right mind would borrow money at that rate during an era of zero inflation and rent controls? Remember that 20% of the interest cost is non-deductible for income tax purposes.
 
The key point here, as Sarenco says, is that it is crazy to buy residential property with a 5.25% mortgage rate. It could only make sense if you have 80% of the cost of the property and need just another 20% max and you pay that off as quickly as possible.

So those rates are crazy, whether they are interest only or not.

Many people who took out interest only mortgages when they were getting cheap trackers have a great investment, even though the price of their property has fallen.
 
So if you want to buy a property for €300k and need to borrow €60k, the rate would be 4.49%.

But you would pay about €1,500 up front as well.

Brendan
 
The biggest problem with these is that it makes it seem a property is more affordable. Because you are paying IO, you can spend more. Have the banks learnt nothing. If the rent covers just the IO, how is it possible to pay back the capital. Please tell me this is not once again predicated on rising property values.

You have been warned.
 
Sarenco said:
5.25% (!) variable for LTVs over 50%.

Who in their right mind would borrow money at that rate during an era of zero inflation and rent controls? Remember that 20% of the interest cost is non-deductible for income tax purposes.
Click to expand...

I know people with a LTV less than 50% and PTSB are charging them 5.8%. The mortgages they took out in 2000, were cheaper than what PTSB has them on.

The fact is 5.25% is not cheap, but it is better than Lotus etc who are charging 6-8% for mortgages and people are borrowing with them.

Dilosk were borrowing as low as 0.8% over EURIBOR in 2015 when they issued a bond. They are going to do well with this mortgage rate
 
Never heard of Dilosk before today. And it says it's an ICS mortgage.

Sarenco what has the deposit scheme got to do with anything?
 
I suppose one consolation is the fact that 5.2% is now back on the road to being fully tax deductible, so 2.6% odd after tax.

Reckless lending and borrowing are a scourge, but there can be circumstances where interest only and flexibility can be useful.
 
Bronte said:
Never heard of Dilosk before today. And it says it's an ICS mortgage.
Click to expand...

BoI sold Dilosk a performing ICS mortgage book, together with the ICS brand and distribution platform, a few years ago.

Bronte said:
Sarenco what has the deposit scheme got to do with anything?
Click to expand...

You asked whether the banks had learnt anything and I assumed your concern was that the consequences of a repeat of the recent bank failures would partially fall on the taxpayer. Otherwise why would you care what Dilosk does?

If lenders and borrowers want to enter into high-risk bargains with each other, well, that's their business.

As long as there is no possibility that (State guaranteed) deposits are at risk then, frankly, I couldn't care less what they do. Not my concern.
 
irishguy2015 said:
I know people with a LTV less than 50% and PTSB are charging them 5.8%. The mortgages they took out in 2000, were cheaper than what PTSB has them on.
Click to expand...

Why don't they refinance or just sell and redeem the loan? They must be hemhorraging cash at those rates.

Do Lotus do BTL mortgages? I thought they just did site acquisition/development financing.
 
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