Sean Roberts asked:


The amount that can be borrowed from Irish banks and building societies varies from lender to

lender. Lenders have various criteria that borrowers must satisfy when they consider mortgage

applications. As well as the value of the property, other factors taken into account include the

income of the borrower, the type and security of their occupation, their credit history and the

possibility of obtaining a guarantor for the loan.

Even if these qualifying conditions are met, the borrower may still need to pay an up-front deposit before obtaining the mortgage. Borrowers may also have to meet other costs such as legal fees and possibly stamp duty.

There are four basic categories of mortgage available to Irish house buyers currently looking to

purchase a home.

Fixed Rate Mortgage

Variable Rate Mortgage

Discount Rate Mortgage

Offset Mortgage

Fixed Rate Mortgage

As their name suggests, fixed rate mortgages involve monthly repayments that stay constant

throughout the period of the loan. The advantages of a fixed rate  mortgage are that if the European Central Bank rate increases, those on fixed rate mortgages will not have to pay more.  However, if the rate decreases, borrowers on fixed rate mortgages will not benefit. Fixed rate mortgages allow borrowers to plan ahead, knowing exactly how much to budget for every month. The disadvantage of fixed rate mortgages, as well as losing out on ECB rate reductions, borrowers have to commit to a given repayment period and will be liable to a charge if they switch to another mortgage lender.

Some lenders will not accept additional or lump sum payments on a fixed rate mortgage.  In addition, when the fixed rate expires, some banks and building societies  automatically transfer the mortgage to a standard variable rate.

Standard Variable Rate Mortgage

A standard variable rate mortgage loan, is a mortgage in which the interest paid by the house buyer is dependent on fluctuations in the ECB base rate. However, banks and building societies are allowed to increase or decrease the rate. The advantages of a standard variable rate mortgage include the fact that borrowers may repay the mortgage early with no early repayment penalties. Also lump sum payments are allowed, so the mortgage can be paid off early, reducing the total interest that would otherwise be due to the lender. The big disadvantage of the variable rate mortgage is that lenders have the power, within certain limits,  to change rates whenever they feel it is necessary.

Discount Rate Mortgage

Lenders often provide initial discount on their variable rate mortgage. This reduced rate may only

apply for the first year, after which it reverts to the standard variable rate. The advantages of a

discount rate mortgage are the lower initial repayments.

Offset Mortgage

Offset Mortgages connect mortgage repayments with the borrowers current and savings accounts. Any balance in these accounts is  ‘offset’ against the mortgage balance, thus reducing the interest owed on the mortgage. Instead of earning a small interest on savings and current account, house buyers  don’t pay interest on the equivalent amount of the mortgage balance. The advantages of an offset mortgage include possible interest payments saving as well as the potential to reduce the mortgage term. It also reduce the amount of Deposit Interest Retention Tax payable. The disadvantage is that no interest is earned on savings and borrowers have to have their current and savings accounts

placed with their mortgage lender.

anonymous asked:


province controls the mortgage and its rates in Canada. Canadian banks play a vital role in the mortgage industry. A study made in 2004 revealed that, these banks cover around 63% of the entire mortgage industry in Canada. These yearly surveys help the people to understand about the mortgage rates in Canada.

The Canada Mortgage and Housing Corporation or the CMHC conducts yearly surveys to revise the picture of mortgage market. The CMHC is a recognized bureau of Canadian Government, which guarantees for the best and the lowest mortgage rates offered to Canadians. Various types of mortgage programs with distinctive features and technologies are available in Canada mortgage industry. Canadians may go for any type of mortgage matching their interests.

Mortgage seekers can use the Internet to make a thorough study on the mortgage rates in Canada. Many mortgage web sites offer mortgage rate calculators to compute and compare different rates. This comparison procedure helps to select the lowest mortgage rate.

Various Types of Mortgage Rates in Canada:

Below mentioned are the three major types of mortgage rates available in Canada:

1.Variable mortgage rate: The primary cost of the variable mortgage rate is less than 0.25%. It is very much possible to modify the variable mortgage rates every month. Individuals may capitalize the lowest possible mortgage rate in Canada with variable mortgage rate.

Variable mortgage rate provides two distinctive modes of payment. First, is the fixed mode and second is the variable mode. Fixed mode of payment does not fluctuate for five years. On the other hand, the variable mode of payment fluctuates every month with respect to interest rates and the principal amount.

2.Fixed mortgage rate: This is a traditional type of mortgage, which offers 75% rate of the mortgage benefit. It involves various terms and period options to provide higher flexibility.

3.The Capped mortgage rate: Capped mortgage rate offers long-term security features with flexible term rates. It also offers variable and relevant interest rate per month in concern with the principal amount. The 5-year term in this mortgage rate decides the capped or maximum mortgage rate. It guarantees the best rate to mortgage buyers. Finally, it offers optional payment mode as such variable and fixed payments.

Brief Summary:

Apart from all these various types of mortgages and their rates, one more type of mortgage is available in Canada it’s the money saver mortgage, which also offers lowest mortgage rates. Money saver mortgage is a 5-year plan with variable interest rates based on the principal amount.

Here, it is possible to regulate the mortgage rates and payments in every three month, based on the variations of principal amount. Hence, individuals may save money and pick the lowest rate with the help of money saver mortgage.

Finally, people can gain access to the best mortgage rates in Canada by using the Internet. Mortgage buyers can browse through several mortgage web sites, which offer the complete information regarding the best and affordable mortgage rates in Canada.