Advice needed about mortgage for first time buyers

5stars said:

Also, can you explain what is fixed higher value is?

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Paul F said:

@5stars You should give consideration to Haven's green mortgage, fixed for four years. The rate was dropped to 2% just today (see this thread). It appears that first-time buyers who go for Haven's green mortgage are eligible for €2,000 cashback, but confirm this with them.

Another question to ask them is whether you will be eligible for their green rate again in four years' time. If not, they are not such a great choice (because their non-green rates are quite high).

Your loan-to-value (LTV) ratio will be around €240k/€340k = 71%, depending on the final purchase pice and mortgage amount. The Avant rate for this LTV bracket is 2.15%. If your LTV came in below 70%, the Avant rate would be 2.05%.

The advantage of Avant over Haven is that you can fix for longer at these rates (up to 7 years). The disadvantages are that the rates are higher you won't get cashback.

Do you think that it is likely that the purchase price will be higher than €340k?

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5stars said:

Thank you so much.
No the purchase price is 340 not higher actually could be 335

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Paul F said:

So let's say you decide to go for the Avant rate of 2.05% because you like the security of having the rate fixed for 7 years (versus only four years with Haven).

If the purchase price is €340k, you want to take out a mortgage of €238k or less to get your LTV below 70%. So you need to find or save an extra €2k before you draw down the mortgage.

If the purchase price is €335,000, you want to take out a mortgage of €234,500k or less to get your LTV below 70%. So you need to find or save an extra €500 before you draw down the mortgage.

Note that by choosing Haven's 2.0%+cashback over Avant's 2.05%, in four years' time you'll be better off by about €2,500. But you might be facing a rate increase at that point, whereas with Avant you would still have three years left on your fixed rate. The decision is short/medium-term savings versus longer-term security.

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5stars said:

Thank you. A green mortgage is another option and I feel it is better than Heaven as it's 5 years fixed. .we will be able to stretch a bit more to get it LTV below the 70%. Avant is great for long term fixed rates but would they survive on the Irish market, they could be gone in the next 7 years , I'm right ?

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• Solicitors' fees and outlays (~€1,500)
• Stamp duty (1% of the purchase price, ~€3,400)
• Land registration fee (~€900)
• Moving costs (~€400)

Paul F said:

If you're talking about AIB's green rate (which is 2.15% with €2,000 cashback), you will only be marginally better off than if you had gone with Avant's 2.05%, and you will only have five years of the security of a fixed rate (versus 7 with Avant).

I have no reason to believe that Avant will leave. And even if they do, whoever buys your mortgage can't change your interest rate during the fixed-rate period.

One thing you need to remember when figuring out whether you can get your LTV below 70% is the one-off costs of buying the house:

• Solicitors' fees and outlays (~€1,500)
• Stamp duty (1% of the purchase price, ~€3,400)
• Land registration fee (~€900)
• Moving costs (~€400)

You could be talking €6,500, which will eat into your deposit if you haven't already allowed for them.

If that puts you above 70% LTV, then Haven (2.0% with €2,000 cashback) looks like a better bet than Avant (2.15%) or AIB (2.15% with €2,000 cashback).

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time to plan said:

Moving costs €400??

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