Mortgage calculator to help consumers

THE National Consumers Agency has launched a mortgage rate change calculator to help those considering changing their mortgage to a new rate or term, or making a lump sum payment.

In light of the European Central Bank’s recent interest rates increase, the agency believes the calculator will help consumers to work out the changes to their monthly mortgage repayments and the overall cost of credit.

Those using the facility will be able to see what will happen to their payments if interest rates change and also what difference paying a lump sum off a mortgage will have on the repayments and long term cost.

“There is a lot of speculation in the media about interest rate increases and whether or not now is a good time to fix your mortgage rate,” said Ann Fitzgerald, NCA chief executive.

“We want mortgage holders to make the decision that is right for their own circumstances, armed with all the facts.

“If you are thinking of changing your mortgage to a new interest rate or want to pay a lump sum off it, our new calculator can help you work out the potential cost or the savings that you will make.

“For most of us, our mortgage is the most expensive loan we ever sign-up to. So it is important to spend some time working out the impact of any changes, before you sign up to them.”

Ms Fitzgerald said Permanent TSB’s decision to offer tracker mortgage holders a financial incentive if they pay a lump sum off their mortgage, might be an attractive option for some.

“However, before you decide what to do, you should ensure you have sufficient rainy day funds put aside in case of unexpected expenses,” she said.

“You should also consider any future planned costs you have for example home improvements, or if you have children starting college or getting married.

“Credit is not as easy to come by as it once was so, if you can, you should set aside money to pay for your future needs.”

Ciaran Phelan, chief executive of the Irish Brokers Association, said the rapidly growing gulf between tracker mortgage rates and those rates now applied to standard variable rates (SVR) “highlights the absolute capital value of trackers as banks boost their margins on SVR mortgages to recapitalise themselves”.

“Tracker mortgages are a massively valuable commodity at the moment, and we advise that those mortgage holders fortunate enough to have one should ask an independent financial advice to conduct a costing assessment before considering switching to a SVR or increasing their monthly repayments,” it said.

lThe mortgage rate change calculator is available on www.nca.ie, along with other tools, including a budget planner to help consumers keep control of their spending.

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