St Raphael's Credit Union - enter Mortgage Market

According to Niall Brady in Sunday Times today.

I guess 3.75% is not on the cheap side.

Or how does it compare to other lenders?

Though Mr Burgess said:
"..Last week, Yorkshire Building Society cut its two-year fixed mortgage rate to 1.14 per cent. This is currently the cheapest two-year deal on the market, followed by First Direct, which charges a rate of 1.15 per cent.

Five-year fixed-rate mortgages have already edged below the 2 per cent mark, with HSBC launching a 1.99 per cent deal last month.

And even ten-year fixed rate deals have crashed to new lows. First Direct, part of HSBC, now charges 2.89 per cent to fix a home loan for a decade.."

I heard the Chief Executive of St. Raphael's Credit Union on the radio this morning. They cover your Life Assurance also if you take out a mortgage with them. I wonder are they just offering mortgages to their members? As far as I know a Credit Union will only allow you to become a member if you live or work in their area.

I hope to goodness this means CU's will be making money at last and paying us some kind of decent dividend. And I'd switch all my banking to them if they were more bankly.

Sally M - what you are referring to is common bond. This is an anachronism that unfortunately still restricts Credit Unions from operating outside of whatever their common bond is. St Raphaels broadly would be Garda + families not sure how wide.
Bronte - many have total banking services eg Dundalk online / sepa / currenbt account etc and St Pauls - everything including debit card. Many have had elements of mortgages for years. Dividend - Dundalk at 1.25%. Is that better than any Bank?

So Raphaels mortgages is new in so far as its 1st time buyers. Not sure the rate is that attractive.

Individual credit unions would not have the skills or the scale to do home mortgages. A rate of 3.75% is ridiculous unless they are lending at 90% LTV, which they shouldn't be doing.

The Credit Unions should form a Building Society and it would be allowed to lend to anyone, member or not, although they could favour members with a discount.

They could put money on deposit with the BS at 1% and the BS could lend at 3%. They should be able to fund their costs and profits from the 2% margin.

Brendan

I disagree - and with the assessments they do on personal lending it is equal to Banks. In fact the structures in many Credit Union would surprise our gracious leader and I suggest that the former Sandymount Credit Union would not be a representative model.

You view on Building Society I would agree with - and add that with the debacle with Banks they are also unsuited for mortgages.
This is long term financing and is suited to a Building Society structure.

The issue of short term sources and long term lending could also mean that this structure could also use Mortgage Bonds with long term maturities
These mortgage bonds should be made available to public.

Would somebody copy Mr Lane in the Central Bank?

Black_Adder ,
Where are Yorkshire building society and first direct Lending ??

mactheman - the UK.
There are significantly lower rates for long term fixed rates in other EU countries.
The Consumer is irrelevant in Ireland as one deranged commentator concluded when he saw Richie Boucher deal with trackers and SVRs, but this is only fiction.