Mortgage rates hit new low

MORTGAGE rates have hit a record low and sunk below the 3% level – with the average rate for buying an older house being 2.99% and 2.98% for new-builds. People with good credit ratings and a decent deposit can negotiate rates 0.2% or 0.5% lower.

The fall in rates means anyone who set up their loan a few years ago when rates were higher can look at renegotiating either to cut the time period or the amount of repayments. Cutting the time period can give a double benefit of a lower repayment rate over a shorter time – reducing the total repaid.

Mortgage broker Empruntis.com said this was useful in three particular situations: when less than a third of the loan has been repaid; when the difference between the old and new rates is more than 1% for loans of less than €200,000 and 0.7% above that, and when the outstanding debt is at least €70,000.

Anyone looking to sell within two years should not get involved, and while the difference in rates is important it is not the only factor to consider as the costs involved (early repayment penalty, frais de dossier, insurance etc) can make the exercise less worthwhile.

For people who think it may be worthwhile, your bank may agree to make a move and save you extra costs – although it is unlikely and you may find it simpler to look elsewhere.