Brendan Burgess
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press release from NIB:
National Irish Bank Transforms Mortgage Pricing in Ireland
·Unique New Mortgage Pricing Model Launched – LTV Mortgage links interest rate to home values
·Margins from 0.50% - less than half of what many mortgage holders currently pay
·Available across full range of ECB Tracker and 2, 3 and 5 year fixed rate mortgages
·Approach based on successful Danish model - National Irish Bank’s parent Danske is the leading mortgage player in Denmark
17th October, 2006. National Irish Bank has today announced a ground-breaking approach to mortgages which has the potential to deliver substantial financial savings to thousands of Irish home owners. As an addition to its already powerful range of recently launched customer packages, the new LTV Mortgage (Loan to Value) pricing model directly links the interest rate to the value of the property. The greater the property value over the loan, the lower the interest rate.
With the rapid increase in house prices over recent years, the LTV Mortgage will be particularly attractive to home owners who have built up equity in their home, particularly those on a standard variable rate mortgage with their existing lender.
Typically today, lenders offer standard variable rate mortgages at an interest rate which equates to a margin of up to 1.35% over ECB. National Irish Bank’s unique tiered pricing model offers a margin ranging from 0.50% to 0.59% depending upon an individual householder’s LTV. This makes the new LTV Mortgage pricing model the most competitive and most innovative in the Irish market today.
The pricing structure is available on mortgages up to 80% LTV and works as follows:
·A margin of 0.50% is applied to the first portion of the loan up to 50% LTV
·A margin of 0.60% is applied to the next portion of the loan up to 60% LTV
·A margin of 0.80% is applied to the final portion of the loan up to 80% LTV
For many of Ireland’s home owners, savings in their repayments could be more than €1,500 per year or €28,000 over the life of a €250,000 mortgage – assuming 18 years remaining on a house valued at €500,000.*
The new pricing model, which is available as part of National Irish Bank’s Easy, Easy Plus and Prestige personal banking packages, applies to its full range of ECB Tracker and 2, 3 and 5- year Fixed rate products - so the customer has excellent choice. Customers can also choose between Capital & Interest on loans up to 80% LTV and Interest Only options on loans up to 60% LTV.
The new LTV Mortgage is available only for principal private residential mortgages with a loan to value up to 80%. It will not apply to investment properties.
To make switching mortgages easier, National Irish Bank has introduced a new switching service in partnership with First American, which is part of IFG Group plc. First American are providers of title insurance which is the legal process that facilitates moving a mortgage from an existing lender to National Irish Bank. The switching costs will be paid by National Irish Bank (excluding Government stamp duty). In addition, customers who take an Easy Plus or Prestige personal banking package will receive a contribution of €100 and €150 respectively towards their house valuation fee when taking out the LTV Mortgage.
Every 3 years, customers will have the opportunity to adjust the rate of interest they pay by getting a new valuation completed to determine their new loan to value. This allows customers to benefit from continuing increases in the value of their home or from lump sum repayments on their mortgage. In the case of a customer who has opted for a fixed rate LTV Mortgage the review can take place at the end of the fixed rate term (subject to a minimum of three years).
National Irish Bank’s personal banking packages
National Irish Bank’s approach to pricing and value in consumer banking is centred on personal packages which group the specific services a customer requires. Five personal banking packages are available – Personal Access, Freedom and Easy (no maintenance fees); Easy Plus and Prestige (€75p.a. and €125p.a. respectively). Transaction fee free banking for credit or debit accounts are the norm with minor restrictions in certain circumstances. National Irish Bank’s market leading pricing includes the same rates for overdraft and credit cards, with rates ranging from 8.8%APR to 10.2%APR. Current account credit interest rates also lead the market for the top two packages at 1.50% and 2.25%. Arrangement fees for overdrafts have been removed as indeed, uniquely, have referral fees.
National Irish Bank Transforms Mortgage Pricing in Ireland
·Unique New Mortgage Pricing Model Launched – LTV Mortgage links interest rate to home values
·Margins from 0.50% - less than half of what many mortgage holders currently pay
·Available across full range of ECB Tracker and 2, 3 and 5 year fixed rate mortgages
·Approach based on successful Danish model - National Irish Bank’s parent Danske is the leading mortgage player in Denmark
17th October, 2006. National Irish Bank has today announced a ground-breaking approach to mortgages which has the potential to deliver substantial financial savings to thousands of Irish home owners. As an addition to its already powerful range of recently launched customer packages, the new LTV Mortgage (Loan to Value) pricing model directly links the interest rate to the value of the property. The greater the property value over the loan, the lower the interest rate.
With the rapid increase in house prices over recent years, the LTV Mortgage will be particularly attractive to home owners who have built up equity in their home, particularly those on a standard variable rate mortgage with their existing lender.
Typically today, lenders offer standard variable rate mortgages at an interest rate which equates to a margin of up to 1.35% over ECB. National Irish Bank’s unique tiered pricing model offers a margin ranging from 0.50% to 0.59% depending upon an individual householder’s LTV. This makes the new LTV Mortgage pricing model the most competitive and most innovative in the Irish market today.
The pricing structure is available on mortgages up to 80% LTV and works as follows:
·A margin of 0.50% is applied to the first portion of the loan up to 50% LTV
·A margin of 0.60% is applied to the next portion of the loan up to 60% LTV
·A margin of 0.80% is applied to the final portion of the loan up to 80% LTV
For many of Ireland’s home owners, savings in their repayments could be more than €1,500 per year or €28,000 over the life of a €250,000 mortgage – assuming 18 years remaining on a house valued at €500,000.*
The new pricing model, which is available as part of National Irish Bank’s Easy, Easy Plus and Prestige personal banking packages, applies to its full range of ECB Tracker and 2, 3 and 5- year Fixed rate products - so the customer has excellent choice. Customers can also choose between Capital & Interest on loans up to 80% LTV and Interest Only options on loans up to 60% LTV.
The new LTV Mortgage is available only for principal private residential mortgages with a loan to value up to 80%. It will not apply to investment properties.
To make switching mortgages easier, National Irish Bank has introduced a new switching service in partnership with First American, which is part of IFG Group plc. First American are providers of title insurance which is the legal process that facilitates moving a mortgage from an existing lender to National Irish Bank. The switching costs will be paid by National Irish Bank (excluding Government stamp duty). In addition, customers who take an Easy Plus or Prestige personal banking package will receive a contribution of €100 and €150 respectively towards their house valuation fee when taking out the LTV Mortgage.
Every 3 years, customers will have the opportunity to adjust the rate of interest they pay by getting a new valuation completed to determine their new loan to value. This allows customers to benefit from continuing increases in the value of their home or from lump sum repayments on their mortgage. In the case of a customer who has opted for a fixed rate LTV Mortgage the review can take place at the end of the fixed rate term (subject to a minimum of three years).
National Irish Bank’s personal banking packages
National Irish Bank’s approach to pricing and value in consumer banking is centred on personal packages which group the specific services a customer requires. Five personal banking packages are available – Personal Access, Freedom and Easy (no maintenance fees); Easy Plus and Prestige (€75p.a. and €125p.a. respectively). Transaction fee free banking for credit or debit accounts are the norm with minor restrictions in certain circumstances. National Irish Bank’s market leading pricing includes the same rates for overdraft and credit cards, with rates ranging from 8.8%APR to 10.2%APR. Current account credit interest rates also lead the market for the top two packages at 1.50% and 2.25%. Arrangement fees for overdrafts have been removed as indeed, uniquely, have referral fees.