Home Economics... answering your property questions
Our property expert advises on switching mortgage and what you can do when your rent jumps once your lease is up for renewal.
Question: We've been reading quite a lot about switching mortgages and although it seems like a lot of hassle and cost, it may be worth it in our case. Our mortgage has around €176,000 left on it with 15 years to go. Our house is valued at around €310,000 and we are paying (I think) at a rate of 4.3pc with Ulster Bank. Do you think we should move it and where would you recommend?
Sinead replies: It seems to me you have a few options. With less than 60pc LTV 'loan to value' ratio (the difference between the property value and the mortgage you have on it), it makes you a good candidate for switching. In terms of directly replacing what you have, AIB's rate is 3.8pc, Bank of Ireland's 3.9pc and KBC has 3.75pc - all keeping your repayments comfortably below the €1,328 p.m. you are currently paying.
All are open for business and while you are correct in pointing out that there are legal documents and time and cost commitments, approaching a mortgage broker to smooth the way will cost around €500 and is worth the investment.
BOI will offer you a 2pc cash incentive to move before year end by the way. In your case that amounts to €3,520, but do look across all rates before deciding. You could always approach Ulster Bank and point out the differential and see if they will match any of the above for you to avoid losing your valuable business.
Alternatively, consider a fixed rate. PTSB's one-year rate is just 3.49pc and the two pillar banks are 3.8-3.9pc for the same period and LTV. Fixed rates generally are a bit lower than standard variables at present. I wouldn't lock in for more than three years though as you can't know what rates will do. When you do apply, you can expect to have your finances scrutinised in the normal manner, so do make sure your incomes/outgoings and other debts are clearly laid out.
Question: Our apartment lease is almost up and we had been expecting something of an increase in rent but my flat mate and I were shocked to be asked for an additional €100 each on top of the €600 we each pay - bringing the monthly rent to €1,400 for what is a small two-bed apartment in Dublin city. This seems excessive. We want to stay but the landlord doesn't appear to be open to negotiation. Is there anything we can do?
Sinead replies: I sympathise with your plight but am not surprised. Rents have definitely increased as there is a squeeze on supply. You don't say exactly where you live, but, for example, the average rent for a two-bed apartment in the IFSC is €1,425.95, according to the Private Residential Tenancies' Board's most recent rent report (see www.prtb.ie for other locations). On Mount Street, it's about €2,200 p.m.
If you believe the rent to be unjust, and I can't say whether it is or not without knowing the circumstances, you can obviously appeal it, but this may take a longer time than your landlord is prepared to wait.
The general guidelines are that rent can only be reviewed every 12 months; it cannot be more than the 'market' rent for the area and property size (you can look at other housing websites to get a good overall idea of this) and you must be given 28 days' notice of the review. Do your research and approach him/her again. If you have been good, clean tenants, they may be prepared to reconsider.
The Ryan report
I don't envy the Leaving Cert students now finished exams and awaiting their results in August. We all recall that nervous time, waiting until the newspapers were published at midnight out of city centre presses with queues of anxious teenagers, dad or mum in tow, seeing if their two As and four Bs had cut it for whatever course they had applied for.
These days, of course, the queueing is all gone and everything's online with a far too complicated points system for us oldies to get to grips with and likely or not, once they discover their first or second preference has been achieved, their next click will be onto an accommodation rental site.
Here they'll find a real queue though - as they join the thousands of families, professionals and those on rent supplement vying for the constricted and limited options available. The system, much like the Leaving Cert, is banjaxed, and the upward squeeze on rents presents an unenviable task for those needing to move away from home.
Environment Minister Alan Kelly is one of our most vocal. Rarely a week goes by without a raft of press releases over this housing strategy or that.
In fairness, many are to be welcomed, but others are just noise, and until the supply issues are dealt with in laws and actions, rather than hopes and aspirations, this year's crop of students, never mind the 98,000 on housing waiting lists, find themselves with more despair hanging over them than Peig Sayers.