First-time buyers in Ireland could be receiving an early Christmas present, as the cost of a mortgage is likely to have dropped by 50 per cent come December, compared to three years ago, according to The Irish Times.
This comes from a new forecast from the quarterly EBS/DKM Affordability Index, which has predicted that by December the cost of a mortgage for the average first-time buyer working couple will fall to 13 per cent of their net income. This is different to three years ago, where a working couple could be expected to spend on average 26.4 per cent of their net monthly income on mortgage repayments for a new home.
Thanks to a series of cuts by the European Central Bank, due to them trying to stimulate a recovery in Eurozone economies, interest rates have fallen to an all-time low. By the end of 2009, first-time buyers mortgage repayments are expected to be 44 per cent lower compared to 2007, which ? according to the index ? is the equivalent to ?539 per month.
It has been predicted that by December, repayments for a first-time buyer working couple on ?165,000 will have fallen by around ?513 per month since July of last year on a national basis. For Dublin it will be about ?643 per month (41 per cent).
Dara Deering, director of membership business at EBS, has said there is evidence of increased activity in the market in recent months, despite the overall number of national first-time buyers transactions falling to 3,184 suggesting otherwise. She said: ?While there continues to be a lack of clarity about how far the market has yet to fall, the reality is that for many first-time buyers, and indeed second-time buyers, the home that they want, in a location that is suitable for them is likely to be very competitively priced at the moment.?
