Interest only mortgages

Traditionally interest only mortgage facilities were only available in respect of investment property purchases. In an interest only facility, as the name suggests, only interest is paid to the lender with the capital balance staying constant. In the past two years a number of lenders have made such facilities available in respect of home loan, although there are usually a number of conditions attached to the facility. One lender will offer first time buyers interest only facilities up to a maximum of three years with the underlying thinking being that it gives first time buyers a chance to get on their feet. Most lenders are happier offering these products to high income earners and will generally impose a review of the interest only facilities every five years.

Tracker mortgages

Tracker mortgages are no longer available for new mortgages.Irish lenders were forced to withdraw these products following the credit squeeze of 2007 and 2008.The products were priced by way of a margin over euribor.Lenders mistakingly assumed that they would always be in a position to borrow at euribor rate but this all came unstuck with the credit squeeze.As a consequence many of these products are actually losing money for lenders.

It is extremely important ,if you are lucky enough to have a low priced tracker mortgage that you act very cautiously when considering changing mortgage rate or mortgage lender.

The actual tracker rates taken up varied according to the loan to value ratio.Whether lenders have an option to increase rates if values drop depends on the terms of the mortgage document.

Loan to value expresses your mortgage as a percentage of the house value with the cheapest trackers being available to the lower loan to value applicants.

Remortgages

If you're tired of paying exorbitant interest on your credit cards and unsecured debt, it may be time to take advantage of a home equity loan, either with your existing lender or with a lender offering a more competitive product.

If you need to consolidate debt or are just looking for smarter financing of upcoming projects, a home equity release can satisfy your obligations, lower your payments and provide you tax savings as well. Please visit our re mortgage section for further information.

Second Mortgages are also a smart source of funding for a myriad of uses, from second homes to home improvement. We can help you combine the financial power of your equity with the benefit of tax savings to supply you with the cash you need to achieve your personal goals.

Annuity mortgage

The repayment/annuity mortgage is the most common one. Each month the borrower repays both monthly interest and a portion of the loan amount. Repayments in the early years of the mortgage are mainly comprised of interest. The balance of the mortgage loan owed decreases as the period progresses, until the loan is fully paid at the end of the mortgage term. The results section of our mortgage repayment calculator gives a split between the capital and interest element of your mortgage.

Endowment mortgage

The product is an interest only mortgage that is supported by an investment or endowment policy. The borrower pays only interest during the term of the mortgage and the loan amount remains outstanding until the end of the term. Premium payments are payable on the investment / endowment policy during the term. The endowment policy is similar to a life assurance investment / savings policy that is designed to provide an amount to repay the mortgage at the end of the term.

Current account mortgage

By combining your current account with your mortgage account all money that would normally be lodged into your current account will be taken off your mortgage meaning that you could pay off your mortgage years ahead of your expected date by simply reducing the capital amount. First Active, one of our lenders, were the first Bank to introduce the current account mortgage. The current account mortgage is a variable rate product and does not facilitate fixing your rates.

Our consultants would be happy to explain the workings of this innovative and highly competitive Mortgage product.

Pension mortgage

Pension mortgages are similar to investment/endowment interest-only mortgages. A pension plan supports the mortgage instead of an endowment policy. The product is generally only available to the self-employed or persons in non-pensionable employment, or Company Directors.

The lump-sum portion of a pension plan is used to repay the mortgage principal at mortgage maturity, timed to coincide with retirement.

The borrower has the unique advantage of gaining dual tax relief at the highest tax rate on the pension premiums, which are all the "capital" repayments, and also gaining maximum tax relief on the mortgage interest.

This can be the most tax efficient mortgage method for suitable borrowers.