A new report has found that first time buyers who take out mortgages are being charged hugely different interest rates by lenders, with a difference of €1,400 a year between the most expensive and cheapest.
Bank of Ireland subsidiary, ICS Building Society, has emerged as the most expensive for first-time buyers, with its 4.8% rate far exceeding AIB’s 3.74%.
Permanent TSB will offer new buyers a rate of 3.99% for a year from this week on but this will rise to 4.34% after a year.
Bank of Ireland and Ulster Bank both charge 4.5% for new buyers while EBS, Haven and National Irish Bank charge 4.35%. KBC Bank has a rate of 4.25%.
Mortgage brokers, including MyHome.ie blogger Karl Deeter of Irish Mortgage Brokers, said that 80% of all mortgage applications are being turned down meaning new buyers could often only get a mortgage from more expensive lenders such as ICS.
According to today’s Irish Independent, the difference in rates charged by cheapest lender AIB and dearest lender ICS for a €200,000 mortgage works out at €118 a month in repayments, which costs €1,416 over a full year.
AIB increased its standard variable rates this morning with new buyers set to be charged between 3.5% and 3.7% interest, depending on the size of their deposit.