Money Guide Ireland

There was a bit of media and political uproar in Ireland over the recent PTSB mortgage rate rise.  With mortgage rates in Ireland at the lowest in years – how do the interest rates here compare with those available in other EU countries?

Figures compiled by the European Central Bank show the average rates available on loans for house purchases at “floating” (variable) rates in the Euro zone at June 2009
Average  Irish mortgage rates are shown as 2.68% .  We are amongst the lowest in the comparison. There are only  2 countries in the June 2009 survey with lower mortgage rates than Ireland. (Finland 2.51% ; Portugal 2.54%) . All the other 12 euro-zone countries have higher rates than Ireland.
The average mortgage interest rate for all the countries surveyed was 3.13%. The individual countries rates are shown below.
Finland 2.51%
Portugal 2.54%
Ireland  2.68%
Italy – 2.85%
Spain – 2.95%
Belgium 3.21%
Greece – 3.46%
Malta – 3.54%
Germany – 3.73%
Holland – 3.79%
France – 3.91%
Austria – 3.97%
Slovenia – 4.11%
Slovakia – 5.48%
Cyprus – 6.1%

At the peak of ECB rates in Sept 2008 (4.25%)  the average rate of mortgages in the Eurozone was 5.8% and the average rate in Ireland according to the ECB was 5.58%.
Rates in Ireland are 48% of what they were in September 2008 – whilst in France they are at 73% of the levels in Sept 2008. In Austria rates in June 2009 are 67% of the Sept 2008 peak.  Only in Luxembourg, Portugal and Finland have mortgage rates fallen more than in Ireland.
So maybe mortgage rates in Ireland do need to rise in line with some of the other EU countries? In the aftermath of the government guarantee the banks were falling over themselves to pass on rate drops in full after each ECB cut. Media coverage named and shamed those lenders that didn’t follow the pack. Maybe those cuts to keep in the good books were not sensible for the survival of the banks ?  It is likely that more rate rises in Ireland will happen soon – and hopefully the press will have moved on to a different story by then.

Tesco Ireland are still rolling out their new lower prices all over Ireland – but you can take advantage of the reductions wherever you live by shopping online at Tesco. You can also get up to €30 discount with these vouchers. There are three vouchers worth €10 euro each. They can only be used one at a time but are all valid until Oct 31st 2009. (Minimum spend €100)  EXPIRED.

See the current Tesco Special Offers and Discounts – Visit Tesco Ireland Here

NIB have made fairly large increases to  their fixed rate mortages today.
A 2 year fixed rate was available with an interest rate of  3.9% – but from today the same mortgage has a rate of  5.35% . That is an increase of 1.45 base points or a 37% increase. Similar increases on the 3 and 5 year fixed rates have also been introduced . The 3 year rate went from going from 4.1% to 5.8% and the 5 year fixed rate going from 4.4% to 6.45%. (a 46% increase !) . Is this a trend that other lenders are going to follow?  With PTSB starting the move towards higher variable rates – maybe the lenders are also going to move fixed rates higher also.

See the Best Fixed Rate Mortgages

Bank of Ireland are offering 6 months interest free credit on cash withdrawals with their credit card for new applicants who apply before October 30th 2009. BOI were already offering an introductory 0% credit on balance transfers and purchases – this added bonus may look more attractive – but beware of the 1.5% cash withdrawal fee (min fee €2.54) .

There is a danger that people may get carried away and use this interest free cash to buy stuff they don’t need. After 6 months – the full rate of interest will be payable – 17.4% APR.

It would not really be possible to make money by withdrawing the cash up to your credit limit and putting in into a deposit account paying 3.75% . After you take DIRT and the withdrawal fee into account you would only just about break even.

Anglo Irish Bank has lowered the interest rate on it’s Premium Demand Account from  3.6% to 3.1% .  The best on demand rate at the moment for amounts under 10k is from Halifax at 3.75%. For amounts over that – Nationwide UK has the best rate of 3.55%.

Anglo Irish has also re-introduced it’s 12 month fixed rate deposit account with a rate of 3.8%  – this account was withdrawn a few weeks ago. Rates on other fixed term deposits have also gone down at Anglo Irish – for example the 2 year fixed rate is now 3.25% and was previously 3.5% .

See the best Irish deposit rates here

Another Tesco money off coupon for use up until 3oth September  2009. Get €5 Euro discount on your Tesco online shopping delivered on or before 30/09/09   -Expired

Latest Tesco Offers Here

More highlights from The Bord Snip Report today -

Reductions to child benefit rate, cutting the €2.5 billion cost of the programme by 20 per cent.

A new Benchmarking of public sector pay with  the possibility of pay cuts and allow comparison of pay rates in the Irish public sector with equivalent posts internationally.

6,930 jobs to go in the education system
6,168 jobs to go from the health service.
(These  reduction in jobs could be achieved without compulsory redundancies)

Revise the income guidelines for the Medical Card to the basic rate of social welfare
Increase the threshold for the Drugs Payment Scheme from €100 to €125 a month .
Medical card holders to pay  €5 for prescriptions

Charges for those presenting at A&E  without a letter from their GP to be increased to €125 from €100 and public hospital inpatient charges be increased by 20%.

The Department of Finance has just published An Bord Snip Nua’s recommendations for around €5.3bn worth of public spending cuts.

The report includes hundreds of proposals  – and a quick glance through it uncovers the following “highlights”

Abolition of the Department of Community, Rural and Gaeltacht Affairs.

A reduction of up to 5% in social-welfare rates.
An increase in the retirement age,
Reduction in the number of Irish embassies
Increases in hospital charges.
A cut of 500 in Defence Forces personnel,.
Amalgamation of small primary schools.
Means tests for home-care packages
Reduced spending on road maintenance.
Abolition of Sports Campus Ireland
Abolition of the Irish Film Board
33% reduction in the number of VECs
Discontinuation of the rural transport scheme

These are all proposals – many of them may never be implemented.

More to come later……!