Revenue Credit Union charges 2.9% fixed rate mortgage, with no early repayment penalties

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torblednam

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CANA CU (Revenue) do mortgages / loans secured against property, of up to €150k at a rate of 2.9%. I think there's a LTV threshold there as well.
 
torblednam said:
CANA CU (Revenue) do mortgages / loans secured against property, of up to €150k at a rate of 2.9%. I think there's a LTV threshold there as well.
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Apparently that's a switcher product with a fixed rate of 2.9% for the term of the loan (up to 10 years), maximum of 50% LTV. Apparently the Revenue's credit union will take care of all valuation and legal fees. Again, no additional life cover costs.

Nice.

http://www.canacu.ie/switcher-mortgage/
 
A very interesting product for employees of the Revenue Commissioners

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This is a great product for someone who wants to switch.

I don't understand why it's just for switchers? If someone needed €150k to buy a house worth more than €300k, why would it matter to CANA?

Such a person would have to take out a mortgage with a lender and then switch to CANA which makes little sense.

By the way, CANA pays 2% dividend on shares, which I think is the highest in the country.

Brendan
 
torblednam said:
Dividend paid in late 2016 was less than 1% IIRC, I'll check and revert.
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Thanks mandlebrot

They refused to give me a set of their accounts as I was not a member.

If you have a copy of the 2016 accounts, I would love to see them. You could email them to me at brendan at this website.

Brendan
 
Regarding legal fees the switcher must cover:

"The member will need to engage a solicitor as CANA will require a First Legal Charge over the property in question. The member must cover their own legal fees but the cost of this may be rolled on to the Switcher Mortgage"
 
That is normal, although lenders are now offering cash to cover the fees.

Personally I would prefer a rate of 2.9% fixed for 10 years from CANA, to paying much higher to Bank of Ireland and not being able to cancel, and getting 2% cash back. BoI doesn't seem to publish their fixed rates on their website anymore, or at least, I can't find them.

Brendan
 
Its good but unfortunately not good enough for some cana members because of the Loan To Value clause where house values plummeted from original purchase price and haven't recovered sufficiently and also because of the 10 years remaining clause. I wish cana could have gone a bit further e.g. I have 13 years left on mortgage, mortgage balance remaining is c.150,000 (was 200,000 when taken out in 2007) and current house value is approx. 200,000 (cost 365,000 in 2007) so don't qualify and am stuck with my variable rate at 6.9% mortgage with start for the next 3 years anyway. Crazy thing is my mortgage payments to start are made via my cana budget account so they already know that the repayments would be covered. Hopefully they will extend it further in time.
 
"Daenis why don't you go chat to your credit union, they are normally very approachable. Maybe they could do you a deal whereby you pay say 4% as you're higher risk.
 
Does anyone know how CANA are financing this ?

Have they secured finance for 10 years at a rate below 2.94% or are they just hoping that they can continue to attract deposits for 10 years at a rate that makes it possible for them to lend at 2.94%

If interest rates move to 5% in 5 years time is CANA going to need a bail out.

Seems to me that this might be a tracker scenario all over again. That is banks, or here a CU, creating a product they don't understand. If I was eligible I would be seriously considering this, despite all I have said previously about fixed rates.
 
cremeegg said:
If I was eligible I would be seriously considering this, despite all I have said previously about fixed rates.
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What you said about fixed rates is not relevant. As these rates are fixed from the CU's point of view, but variable from the borrower's point of view.

If rates rise, the rate is fixed.

If rates fall, the borrower can switch without penalty.

Brendan
 
Brendan,

I think you misunderstand my point.

This offer seems extremely attractive from a customers point of view.

What I am questioning is, if the cost of money for the CU increases to say 5% in 5 years time, how will it be able to continue to finance the loan, will the CU need a bail out.

In 2022 ECB rates may well be 5%, anyone who has a fix at 2.94% will be delighted. Where would that leave the CU.
 
Daenis said:
I wish cana could have gone a bit further e.g. I have 13 years left on mortgage, mortgage balance remaining is c.150,000 (was 200,000 when taken out in 2007) and current house value is approx. 200,000 (cost 365,000 in 2007) so don't qualify and am stuck with my variable rate at 6.9% mortgage with start for the next 3 years anyway.
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@Daenis Your LTV is currently ~75%. Are you not in a position to switch mortgages to another provider other than Start? 6.9% seems like a crazy rate if you are in a position to switch [not just to CANA but other banks]
 
cremeegg said:
This offer seems extremely attractive from a customers point of view.
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As Sarenco might say, we are in violent agreement on this one.

I wouldn't worry too much about how they will finance it.

There will be a very limited take up of it as it's very restrictive. Limited to switchers. Maximum €150k. Maximum 10 years.
And if there is a big demand, they will be limited by the Central Bank restrictions.

cremeegg said:
In 2022 ECB rates may well be 5%, anyone who has a fix at 2.94% will be delighted.
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Yes, but by then, the maximum loan of €150k will have only €80k outstanding. If ECB rates are 5%, that does not mean that the Credit Union will be paying 5% on shares.

So it's probably a profitable product for them.



Brendan
 
Protocol said:
Of course, only Revenue staff can get this deal, as only they can be members of CANA
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And their families....


But what is stopping other CU offering the same deals? Same restrictive rules - 150k max, LTV 50% max, 10 years max, perfect payment record for at least 5-10 years previously (hence switcher only) ....

This would really be viewed as prime lending with minimal risk of a default... and even if it did happen, the CU would surely be covered although may take time to get possession of the property

All depends on the cash reserves CU's have and what the alternative investment options are ...
 
@gnf_ireland we haven't really tried other banks it probably is something we should look at, of course our record isn't perfect we wouldn't be with start in the first place if it was, but yes we should look at the other options.
 
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