Bank of Ireland Launches Enhanced 100% Mortgage for First Time Buyers
29-Jul-05
Bank of Ireland Mortgages today (Friday 29 July 2005) announced its 100% mortgage offering, QuickStart 100, for first time buyers. In doing so, the Bank has launched a market first by facilitating first time buyers with a Bank of Ireland personal loan to cover the contract deposit required on a house purchase. The personal loan will then be redeemed when the mortgage cheque issues. The mortgage offering also offers the option of a 35 year mortgage term.
Until this innovation by Bank of Ireland Mortgages, first time buyers have had to fund the contract deposit themselves, as it is required in advance of the mortgage draw down, even where the borrower opts for a 100% mortgage.
Olive Moran, Marketing Manager, Bank of Ireland Mortgages said: "In developing this product, we made a point of talking to our customers and it was very clear to us that raising the 10% contract deposit is a significant burden for first time buyers. Take, for example, a first time buyer's home in the region of Euro300,000. This means that a first time buyer needs to hand over a minimum of Euro30,000 of their own funds, in some cases weeks before they receive funds from the bank".
To alleviate the pressure on first time buyers, Bank of Ireland will lend the borrower the full contract deposit amount up front in the form of personal loan at 6%, with deferred interest payments until the mortgage draws down. This means that first time buyers do not need to carry the burden of repayments on the contract deposit loan until the house purchase is complete.
In offering a 35 year mortgage term, Bank of Ireland Mortgages is also giving first time buyers the option of significantly reducing their mortgage repayments. The repayments on a mortgage of Euro300,000 would amount to Euro930 per month on a 35 year mortgage compared to Euro1,281 on a 30 year mortgage. Variable rate mortgage customers can reduce their mortgage term at any time simply by increasing the monthly repayments.
Commenting on recent changes in the market and the issue of the repayment ability of borrowers, Olive Moran said that: "In developing this innovative product, we have ensured that the fundamentals of the product are right. In particular, the Bank will continue to uphold its strong focus on borrowers' ability to repay in the current low interest rate environment and factor in the possibility of future interest rate increases. Within the Bank of Ireland network, our mortgage advisers will continue to provide guidance and sound financial advice and ensure that first time buyers understand the risks they are taking regarding the structuring of the mortgage loan".
Bank of Ireland Mortgages advises customers that, although they will not have to finance the contract deposit, they will have to cover other up front costs such as legal fees, outlays, valuation fees, booking deposit, stamp duty (if applicable) and booking deposit interest. On a typical Euro300,000 mortgage, first time buyers will need to have saved approximately Euro10,000 to cover these costs compared to Euro40,000 if they also have to cover the contract deposit.
Customer research also shows that first time buyers save an average of Euro16,000 indicating that many of them will have sufficient funds to cover the costs outlined above.
Customers who wish to avail of the QuickStart 100 mortgage will need to have a minimum income of Euro35,000 per year (or Euro60,000 in the case of joint applicants). The criteria also specifies that qualifying properties have a minimum of two bedrooms.
29-Jul-05
Bank of Ireland Mortgages today (Friday 29 July 2005) announced its 100% mortgage offering, QuickStart 100, for first time buyers. In doing so, the Bank has launched a market first by facilitating first time buyers with a Bank of Ireland personal loan to cover the contract deposit required on a house purchase. The personal loan will then be redeemed when the mortgage cheque issues. The mortgage offering also offers the option of a 35 year mortgage term.
Until this innovation by Bank of Ireland Mortgages, first time buyers have had to fund the contract deposit themselves, as it is required in advance of the mortgage draw down, even where the borrower opts for a 100% mortgage.
Olive Moran, Marketing Manager, Bank of Ireland Mortgages said: "In developing this product, we made a point of talking to our customers and it was very clear to us that raising the 10% contract deposit is a significant burden for first time buyers. Take, for example, a first time buyer's home in the region of Euro300,000. This means that a first time buyer needs to hand over a minimum of Euro30,000 of their own funds, in some cases weeks before they receive funds from the bank".
To alleviate the pressure on first time buyers, Bank of Ireland will lend the borrower the full contract deposit amount up front in the form of personal loan at 6%, with deferred interest payments until the mortgage draws down. This means that first time buyers do not need to carry the burden of repayments on the contract deposit loan until the house purchase is complete.
In offering a 35 year mortgage term, Bank of Ireland Mortgages is also giving first time buyers the option of significantly reducing their mortgage repayments. The repayments on a mortgage of Euro300,000 would amount to Euro930 per month on a 35 year mortgage compared to Euro1,281 on a 30 year mortgage. Variable rate mortgage customers can reduce their mortgage term at any time simply by increasing the monthly repayments.
Commenting on recent changes in the market and the issue of the repayment ability of borrowers, Olive Moran said that: "In developing this innovative product, we have ensured that the fundamentals of the product are right. In particular, the Bank will continue to uphold its strong focus on borrowers' ability to repay in the current low interest rate environment and factor in the possibility of future interest rate increases. Within the Bank of Ireland network, our mortgage advisers will continue to provide guidance and sound financial advice and ensure that first time buyers understand the risks they are taking regarding the structuring of the mortgage loan".
Bank of Ireland Mortgages advises customers that, although they will not have to finance the contract deposit, they will have to cover other up front costs such as legal fees, outlays, valuation fees, booking deposit, stamp duty (if applicable) and booking deposit interest. On a typical Euro300,000 mortgage, first time buyers will need to have saved approximately Euro10,000 to cover these costs compared to Euro40,000 if they also have to cover the contract deposit.
Customer research also shows that first time buyers save an average of Euro16,000 indicating that many of them will have sufficient funds to cover the costs outlined above.
Customers who wish to avail of the QuickStart 100 mortgage will need to have a minimum income of Euro35,000 per year (or Euro60,000 in the case of joint applicants). The criteria also specifies that qualifying properties have a minimum of two bedrooms.