Financial regulator launches mortgage guide

A new trouble-shooting guide to mortgages was today launched by the Financial Regulator.

A new trouble-shooting guide to mortgages was today launched by the Financial Regulator.

The leaflet gives independent information to help consumers make informed decisions when buying their first home, trading up, switching banks or purchasing an investment property.

The Regulator's consumer director, Mary O'Dea said the 'Mortgages Made Easy' guide details the most important things to think about when getting a mortgage.

"It explains how to work out how much you can borrow, what size mortgage you can get and explains some of the risks with 100 per cent  mortgages," she explained.

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"It details how to choose a mortgage, explaining the different types of mortgages, interest rates and flexible payment options."

Ms O'Dea pointed out that the most important thing to consider is how much you can afford to repay every month.

"It can be tempting to overstretch yourself and borrow as much money as you can, but you really need to look at what you can afford each month and work from there," she said.

"Remember that your circumstances could change and if interest rates were to rise or you or your partner had to stop working for some reason, you could find it difficult to make your mortgage repayments.

"Once you have established what you can afford to repay, you should then look at the size of the mortgage and how long it will last.

"Bear in mind that a €200,000 mortgage will cost you about €100,000 euro in interest over 25 years so it is important to choose wisely."

For people who already have a mortgage, the guide has information on reviewing your mortgage and how to change lenders.

It also details what to think about if you are increasing your mortgage and points out some of the risks of consolidating all your loans into your mortgage.

(PA)