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Mortgage pain worse for those in 30s and 40s

LARGE numbers of people in their 30s and 40s are spending up to €4 out of every €10 they earn on mortgage repayments, a new study shows.

This means that a working couple with a gross income of €70,000 are paying almost €2,000 a month on mortgage repayments.

And even a single person on a gross income of €40,000 is shelling out more than €1,000 a month to meet their mortgage bill, according to the study. A new survey, commissioned by smartquotes.ie, shows that the average mortgage holder sees more than a third of their income going on monthly repayments. But people in their 30s and 40s, who typically bought at the height of the boom, are paying even more.

For those between the ages of 35 and 44, around 41pc of their after-tax income ends up paying for the mortgage – in many cases on properties whose value has collapsed to half of what it once was.

Rising variable mortgage rates have put added pressure on those with this type of home loan. A family with a €300,000 variable-rate mortgage of 4.4pc is paying just short of €1,500 a month in repayments.

Andrew Nevin of SmartQuotes.ie said the one area on which mortgaged households could make savings was mortgage-protection insurance.

This is life cover that lenders insist is put in place to pay off the mortgage if the mortgage holder dies.

But Mr Nevin said many people took out mortgage protection policies a number of years ago when the premiums were much higher.

A fall in the numbers dying, because people are living longer, and strong competition among insurers have meant that the cost of premiums have fallen dramatically in recent years.

The smartquotes.ie research found that a third of homeowners are paying more than €51 a month in mortgage protection costs. Mr Nevin said it was possible to get a much cheaper deal.

Irish Independent