HOD Mortgage|Centre
– Independent Mortgage Providers
HOD Mortgage Services: Mortgage Types Available in Ireland
With over 400 different mortgage types available, here are some
of the main types:
What are the different loan types available?
1.Annuity Mortgage
With an annuity mortgage, monthly repayments are used to cover both
the loan amount and the interest charged on the loan – so
from day one you are eating into the capital.
2. Switcher Mortgages
By talking to us at HOD
Mortgage|Centre we
will review your current mortgage arrangements as well as other
borrowings and make a recommendation to you - services which could
potentially save you a considerable amount of money by switching
your valued business to another lender who may be willing to pay
your legal fees subject to conditions. Talk to us today and knock
€€€’s off your mortgage!
3. Tracker Interest Rate Mortgage
This is technically a variable rate mortgage but is called a tracker
because it tracks the European Central Bank (ECB) base lending rate
by an agreed margin. This margin is guaranteed in an increasing
or decreasing interest rate environment. Rates are generally lower
than fixed rates and appeal to borrowers who do not mind the occasional
fluctuation in their repayments.
4. Sub- Prime Mortgage
This product is available to those who may be having difficulty
gaining mortgage approval from the high street banks and building
societies for a number of reasons including: relocation to Ireland
from overseas (with limited employment history), an arrears history
on previous loans, unsatisfactory credit profile. Non conforming
mortgages will be more expensive than traditional mortgage products.
Consumers who avail of them can switch to another lender for lower
rates within a short number of years provided they have conducted
their account in a satisfactory manner. In addition, the sub-prime
option can be offered up to age 80, which allows older people to
spread repayments over a longer period.
5. Split Rate Mortgage
This is a mortgage where part of the interest rate on the loan is
fixed and part is variable. This may appeal to someone who wants
to gain some benefit from various options in a changing interest
rate environment. If allows you to reduce the effect of increases
in ECB rates by fixing a portion of your loan. If rates increase
your fixed portion remains unchanged and if rates decrease your
variable portion decreases. It is up to the borrower to decide whichever
he/she wants to divide the repayments between fixed and variable.
6. Loan to Value (LTV) Mortgage
This type of mortgage is a relatively new option available to Irish
homeowners and can result in significant savings for those who qualify.
For example if your property is valued at €500,000 and the
mortgage is €250,000, then the outstanding mortgage is at 50%
the value of your property. Banks assume there is a lower risk lending
to homeowners with lower LTV’s and therefore such homeowners
are well positioned to qualify for further discounts.
7. Fixed Rate Mortgage
This is by far the most popular type of mortgage product on the
market and all of the lenders provide fixed rate options. A fixed
interest rate does not change during a specified term, usually between
1 to 10 years but is priced a little higher than other interest
rate options. You are paying for the peace of mind of knowing what
your repayment will be for a specified period of time. One aspect
to be aware of with fixed rate mortgages is the early redemption
penalty which can be up to 6 months interest – however if
you are taking up a new mortgage with the same lender within 6 months
this penalty may be waived.
8. Capped Tracker Mortgage
This is a variable interest rate which provides a pre agreed cap
in the rate increase on the mortgage, regardless of the decisions
taken by the ECB. The cap offers security against significant rate
increases.
9. Interest – Only Mortgage
Interest – only mortgages are where monthly repayments are
used to just pay off the interest charged on the loan and not the
capital amount itself. This mortgage is particularly popular with
individuals with expectations of acquiring capital in the future
or definite plans to sell on. Basically you are servicing the interest
only element of the loan in the expectation that you will one day
sell the house, possibly get an inheritance or find some other way
to pay off the capital.
Contact
HOD Mortgage|Centre
49 O’Connell Street,
Limerick.
Tel: 061-310050
Fax: 061-463050
eMail: tomclarke@hod.ie
HOD Mortgage|Centre :: Pre-Enquiry
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Mortgage Types :: Stamp
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