WIth the recent AIB and PTSB mortgage rate rises causing the usual media uproar – it is worth looking at UK mortgage rates to see how they compare to those available in Ireland.
With the UK base rate at just 0.5% and the ECB rate at 1% – you might expect lower interest rates in the UK – but that is not the case.
The lowest variable rate we could find for a UK first time buyer (according to MoneySupermarket.com) was 4.29% – but this is restricted to joint applications by graduates. Here in Ireland as at 30th March 2010 – FTBs can still apply for variable rates from 2.6% to 2.99% on LTV of 85%. That is a 1.6% difference.
There are still tracker mortgages available in the UK – but the best rate we could see for an FTB was base rate plus 3.29% (3.79%). This is still 50% higher than the lowest variable rate available in Ireland – and it comes with a £495 fee and a deposit of 15% is needed.
See Best Variable Rates in Ireland
The lowest 2 year fixed rate in the UK was from Britannia with a rate of 4.49% for an 85% loan to value. There is an application fee of £999. (Application fees for mortgages are unheard of here in Ireland). Here in Ireland the lowest 2 year fixed rate is just 2.65% (no fee) – see Best 2 Year Fixed Rates in Ireland
In July 2008 the lowest mortgage rates available in Ireland were around 5.5% – so all Irish borrowers will have seen their monthly repayments tumble in the past 18 months – especially those wise/lucky enough to get a good tracker rate.
Rates are now rising again – and hopefully borrowers put aside some or all of the reductions in mortgage repayments – which they can now use to cover the rate rises.
It is easy to see why people are angry with the rate rises when the see the massive profits Irish banks made in recent years.