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Back for good? Irish lenders promoting 90 per cent mortgages

KBC Bank is now actively seeking candidates for 90 per cent loans, but did you know other lenders are making similar offers?

IT’S NOT QUITE a return to the 100 per cent mortgage, but the 90 per cent mortgage is now being offered to potential Irish homeowners.

KBC Bank today began actively promoting 90 per cent mortgages. The lender says the move is being made to meet increasing demand from first time buyers and people trading up.

According to the bank: “For loans up to €750,000 KBC is increasing its offering from an 80% maximum loan to value to a 90% loan to value”.

They are not on their own in offering such loans to certain candidates – other banks currently making the same offer in some circumstances include Bank of Ireland and Ulster Bank.

The willingness of lenders to allow buyers high levels of mortgage credit was one contributory factor leading to the property collapse – some homeowners now burdened with debt took out 100 per cent loans at the peak of the boom. (Remember this ad from Bank of Ireland?)

KBC’s Head of Products Edward Dylan says that that in contrast with similar mortgages offered elsewhere in the past, the bank was placing a major importance on the affordability of the loan for prospective buyers, saying that it would be the “primary metric” they looked at.

Speaking to TheJournal.ie he said bank officials would closely examine the stability of any candidate’s employment situation, along with other factors before signing off on a deal. But he said there would be no “dramatic amendments” to qualifying criteria for buyers seeking a 90 per cent mortgage, as opposed to an 80 per cent one.

Economist Derek Brawn – who published a book predicted the collapse of the property market – says a maximum rate of 85 per cent would be more appropriate. Speaking to TheJournal.ie, he said tougher rules were needed to promote a more reasonable lending climate.

A rate of 90 per cent may make sense in a market like now with depressed prices but we need to get to a situation like Canada where 85 per cent is the maximum. A good rule of thumb you have people saving a 15 per cent deposit.

Brawn says a change to the law requiring a prospective buyer to put up a set proportion of the asking price would lead to more equity in the market, and create greater stability, making conditions more attractive for banks to begin lending.

The latest Residential Property Price Index from the Central Statistics Office showed some positive signs, with housing prices continuing to fall, but at a slower rate than recent years.

There was a 1.2 per cent decrease nationally in the year to April. However sales for the month showed there was an average price increase of 0.8 per cent, compared to a fall of just over 1 per cent in April of last year.

Read: Sinn Féin’s bill to repeal the local property tax rejected >

Read: Property prices still falling, amid some signs of recovery >

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    Mute Lewis Armstrong
    Favourite Lewis Armstrong
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    Sep 23rd 2023, 11:33 AM

    There are in fact bad dog breeds and it is not just about bad owners. These are animals and can just snap; the key issue is whether a dog could be capable of killing a small child and, if so, they should be banned. If a dog cannot be physically overpowered by an adult then there is no question it should be destroyed and banned. No value to society having these types of creatures kept in peoples homes.

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    Mute Wombleman
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    Sep 23rd 2023, 11:57 AM

    @Lewis Armstrong: couldn’t agree more. Focus should be on propensity to do extreme physical harm and nothing else.

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    Mute Tommy Haze
    Favourite Tommy Haze
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    Sep 23rd 2023, 12:55 PM

    Saw a young woman walking down the street with an American bully recently.
    Her dog spotted another dog across the street and took off. He literally dragged her on the ground across the street. Fortunately the other dog had skidaddled.
    She got up, her jeans were ripped from being dragged.
    She said:
    ‘Brutus, behave yourself’
    She had no control of that dog.

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    Mute Paul
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    Sep 23rd 2023, 5:00 PM

    Guns dont kill people, people kill people.

    Rabid killer fighting dogs dont kill people, bad owners do..blah blah blah.

    1. Muzzle all dogs in public.
    2. Impound and euthanized unmuzzled dogs
    3. Make owners fully criminally responsible for the actions of their killer pets.
    4. Enforce the above strictly.

    No more dog attacks.

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    Mute Cornelius Murphy
    Favourite Cornelius Murphy
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    Aug 29th 2024, 10:08 PM

    There is NO enforcement of dog laws. we need police and dog wardens…..

    (yes, I have two licenced rescue dogs)

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