Monday 20 November 2017

*Need to know

NAMA's 80:20 deferred payment initiative is designed to protect buyers from negative equity. If the price of their new home has fallen after five years they will be able to reduce the amount they owe on their mortgage.

For example if a person buys a €200,000 house with a €180,000 mortgage and finds that the price of the house has fallen 20pc five years later, they will have the amount of the fall deducted from the mortgage. This would reduce the amount owed on the mortgage by €40,000.

As the buyer will make full payments from the outset on the full €180,000 mortgage then there is no change in the amount of their repayments if the price rises or is unchanged.

It will only apply to those who take out their mortgages with Bank of Ireland, EBS and Permanent tsb banks. So it does not apply to cash buyers or those taking out mortgages with other banks.

No haggling is allowed as the agent will only accept the price negotiated with NAMA. 80pc of the agreed sale price of the property will be paid upfront. The remaining 20pc will only be due in five years' time.

Buyers will need to pay a deposit of at least 10pc.

The amount of the fall in price after five years is decided by an independent valuer.

Indo Property

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