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Mortgages - Ireland - March 2020
Overview
 
What you need to know
New mortgage loans issued between 2018 and 2019 increased. However, total outstanding mortgage debt for IoI declined, highlighting that while more consumers are seeking to buy a property, many still are making concerted efforts to reduce mortgage debt. While Brexit may have caused some (particularly in NI) to pause for thought when considering a new mortgage, future demand for housing is likely to drive the mortgage market forward. 

Issues covered in this Report
This Report examines the mortgage market in NI and RoI and analyses the main factors determining supply and demand for mortgage loans. This Report discusses the factors that are driving and impeding demand for mortgages in NI and RoI.

It examines the following areas of mortgage products:

●	Mortgage – a loan for house purchase secured against the property. This category includes lending to first-time purchasers, existing borrowers transferring their existing mortgage to another property and lending for BTL purposes.
●	Re-mortgage – this is where a mortgage borrower redeems his/her existing mortgage with their current lender and takes out a new mortgage on the same property with a different lender.

Types of mortgage based on method of repayment:

●	Repayment mortgage – this is where the borrower pays off both the amount borrowed (ie capital) and the interest charged each month.
●	Interest-only mortgage – this is where the borrower pays off the interest charged on the loan, but not the capital. Consequently, the borrower will still need to pay off the original loan at the end of the term, for example by using an investment scheme.

Types of mortgage based on interest rate:

●	Fixed rate – the interest payments are fixed for a set period of time, after which the borrower will be moved onto another rate, such as the lender’s standard variable rate.
●	Standard variable rate – the interest varies with the lender’s mortgage rate.
●	Tracker rate – the interest rate moves up or down by tracking an external rate, such as the Bank of England’s base rate or the European Central Bank’s base rate.
●	Discounted rate – the interest rate varies with the lender’s standard variable rate, but the rate is also discounted for a set period of time.

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