This year has already had its fair share of turmoil inside the mortgage sector, we saw the exit of two major institutional lenders Ulster Bank and KBC. Now one of Ireland’s flagship lenders has decided to cap its loans at just 2.5x its customer’s annual salaries.
Unevenness in lending structure, as mainstream bank monopoly continues to rise with lenders leaving the sector.
The balancing act of power between mortgage lenders and high street banks has always been a complex one now, with major lenders who have no traditional bank backing leaving the sector, it means that major high street banks such as AIB and Bank of Ireland may well increase their interest rates on their mortgage products.
For a long time in Ireland, the interest rate on mortgages has been kept stable by the ability for landlords to purchase mortgages directly from lenders as opposed to using a bank-based mortgage, this meant even if the mortgage was purchased from the Bank, the bank offered a competitive rate to be competitive with mortgage lenders.
What Does this mean for purchasing properties?
Although the exit-ing mortgage lenders is certainly something to ponder it does not present an immediate threat to act on, in fact even with all the other factors contributing to mortgage rates in Ireland, Ireland was still the only country in Ireland to have lowered mortgage rates in June.
If you are thinking of purchasing a property as an investment, it’s well worth talking to us at KPM Portfolio management team at the inception of the idea as opposed to post-purchase.
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Property Management Company Dublin
KPM Group has helped countless landlords free themselves from the day-to-day management of their portfolios and trust us to deliver the maximum return on investment while providing quality property management services.
If you would like to speak to us here at KPM about your portfolio, then get in touch today, and a member of staff will be happy to help in any way we can.
