Increase in interest rates for Rebuilding Ireland home loans has pushed out potential borrowers.
New figures from the Department of Housing show that approvals
for the Rebuilding Ireland home loan scheme fell by 60%, draw downs fell by
50%.
Previously a successful applicant could borrow at a rate of 2 per cent over 25 years, a rate which significantly undercut those available in the market at the time. However, this rose to 2.745 per cent in January of this year, making the loans considerably less affordable, and decreasing the amount potential home-buyers can borrow. It also pitches the scheme substantially above market rates, with a rate of 1.95 per cent now available from Avant Money over seven years.
According to the figures, 235 home loans were approved in the
first six months of the year at a total value of €38.2 million, with 283
loans drawn down at a value of €47.7 million.
This compares to 574 loans approved in the first six months of
2019 at a total value of €95.7 million, with 556 loans drawn down at a
value of €93.9 million.
While applications for the scheme are not detailed in the
department’s figures it’s likely that fewer people may have applied for the
scheme given the impact of the Covid-19 pandemic on incomes, however,
the decrease in approvals in the first quarter of 2020, before the pandemic
hit, was significant at 37 per cent.
This suggests that the Government’s decision to increase the
cost of the scheme has also hit potential applicants.
One of the most noted declines was seen in Dublin city, where the scheme had been popular. Last year 140 home-buyers were approved for the scheme in the first six months of the year; this year. however, just 56 were. Fingal, which covers areas like Swords and Castleknock to the north of the city, approved 49 loans in the first half of 2019, but just 19 in 2020.
For more details read full article: Approvals for Government’s home loan scheme plummet 60% (irishtimes.com)
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The McPeake Team...
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