If you’re a prospective home buyer, you’ve likely heard or read some variation of this statement while looking on in anguish at constantly increasing mortgage rates.
This increase of around 2% may not sound like much. Especially in comparison to historical interest rates, which were at double-digits throughout the 1980s. To illustrate this, Dara Turnbull, an economist for Housing Europe, looked at an example in detail for The Journal.He took a ‘typical’ first-time buying couple in 1987 – two people aged under 35 with no children – and compared it to one in 2022. Old Irish pounds were converted to euros.
A major one is mortgage interest relief. Until 2013, the state effectively subsidised mortgages. House buyers got relief to the tune of thousands of euro per year. “The key thing is that people used to borrow about two times their income, but now it’s about 3.5, four times their income,” he said.Read Next Related Reads Is Ireland once again a 'Treasure Island' for supermarkets?
“Property values would fall and there would be a severe depression before you even got to double-digit rates.
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Source: IrishTimes - 🏆 3. / 98 Read more »