Cost of running family home drops €220 in the past year
Published 16/11/2015 | 02:30
Lower mortgage rates have pushed down the cost of owning and running a family home.
It now sets a family back €16,200 to fund the day-to-day running of a home, according to calculations by AA Ireland.
This is down €220 from the cost last year.
It is the first time in years that the amount of money needed to own and maintain a home has fallen. But despite this, the annual cost of €16,200 represents about 41pc of the national wage, leaving little for other family costs and saving.
Director of the AA Conor Faughnan said the decrease in running costs was due to pressure put on banks to reduce variable and fixed rates for existing homeowners.
"One of the key drivers of the year-on-year decrease is that current mortgage lending rates are considerably lower now than this period last year.
"The change is down to market forces and pressures from the Central Bank of Ireland and is undoubtedly good news for first-time buyers."
Finance Minister Michael Noonan has had the main banks into his department twice this year in a bid to get them to reduce mortgage rates.
AIB and its EBS unit cut variable rates three times in the last year. Permanent TSB has lower rates for existing homeowners who have built up equity in their homes, Ulster Bank and Bank of Ireland cut fixed rates, and KBC has reduced its variable rate for existing homeowners.
A family that had a 10pc deposit and bought a home in the past few months will end up paying close to €9,500 a year in mortgage repayments for a typical house, the AA calculated.
However, the AA figures show that those who bought a home at the height of the boom are shelling out more money on mortgages as they had to pay more for their property.
The so-called 'negative equity' generation is paying an average €6,260 a year more than someone who bought a home in the past three months.
Mr Faughnan said repairs, maintenance and the cost of putting a contingency fund in place is the second most expensive bill for households. This totals €1,240, down close to €40 from last year.
Property tax is assumed to cost €405, which is €90 higher than last year because a more expensive house is assumed as part of the calculations.
The AA calculations put the cost of heating a three- or four-bedroom home at close to €990 a year, with a further €1,117 being spent on electricity.
Unchanged from last year is the cost of a TV licence at €160. But household insurance will set an average family back €493, up €19 on the year.
Telephone and broadband bills are estimated at €454.
Household appliances cost a family €543 a year, and household cleaning products cost €320, with refuse collections coming to €293.
Water charges are a new addition to the suite of costs this year at an estimated fee of €260 for a multi-adult household.
Mr Faughnan said: "Owning and maintaining a home absorbs a significant amount of income. Our research reveals that it certainly pays to shop around for general household expenses, such as refuse collection, home heating and telephone and broadband services."