Finance Ireland is stepping back from a move that threatened to wreck home-buying plans

Non-bank lender Finance Ireland has made a U-turn and is said to be giving borrowers more time to sort out mortgage applications.

This allows them to take advantage of lower mortgage rates.

The lender shocked its customers last week by announcing mortgage rate hikes of up to two percentage points, effective immediately.

The move drew widespread criticism as it threatened to fail home-buying deals and meant people trying to switch to Finance Ireland had to pull out as such moves no longer had value.

Due to the strong increases, some tariffs will be more expensive by 300 euros per month.

Finance Ireland had said only mortgage applications that were approved and had an application for drawdown received before close of business on Friday September 30 would benefit from the lower rates.

If no call for funds has been requested before this date, the new higher rates will apply.

Finance Ireland has now been relegated.

It confirmed to brokers that there will be a one-month notice period while applicants with mortgage loan offers can access their loans at the lower interest rates.

The transition will apply to customers who received a formal loan offer on or before September 30th and have drawn down their loan by Friday, October 28th.

Mortgage broker Michael Dowling said Finance Ireland’s initial decision not to tell those getting a mortgage to buy a home or make a switch about the higher rates caused “panic”.

He said Finance Ireland’s change of heart would help more people qualify for the rates before they were increased last week.

Executives often give those looking to get a mortgage four weeks to submit the documents before higher interest rates materialize.

The move to not give notice to those receiving a mortgage had led to people calling Finance Ireland’s decision “disgraceful”.

But the central bank declined to comment when asked about the lack of notification of the higher interest rates for those in the process of obtaining a mortgage from Finance Ireland.

Last week’s rate hikes mean a 20-year fixed-rate mortgage will be between 4.6 percent and 5 percent, depending on the percentage range of the loan-to-value ratio.

A first-time buyer with a 90 percent loan remaining to be drawn will see the five-year fixed rate rise from 3.95 percent to 5.95 percent, Mr Dowling said.

This adds about €300 to the monthly payment.

Over a year, this adds up to an additional €3,600 in repayments.

Some buy-to-let lender rates will rise to 6.8 percent, rates not seen in this market in a long time.

Mr Dowling said: “These are wild hikes and they appear to be inconsistent with current interest rates.”

It is the second time this year that Finance Ireland has hiked interest rates.

https://www.independent.ie/business/personal-finance/property-mortgages/finance-ireland-climbs-down-on-move-that-threatened-to-scupper-house-buying-plans-42055323.html Finance Ireland is stepping back from a move that threatened to wreck home-buying plans

Fry Electronics Team

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