30-Mar-17

Thinking of buying your first house? Don’t be fooled by the Cash Back offers

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€7500 in cash (€5000 now and €2500 paid after the 5 th year) or extra interest payments of €51,877 over 30 years, you decide...

A bird in the hand is not always worth 2 in the bush. If you are a First Time Buyer and thinking of buying your first home there are great mortgage cash back offers from some of the Banks an Mortgage lenders.

These offers seem great and can go towards the fitting out of your new home or solicitor costs but you will pay extra.

Current Mortgage special offers based on a mortgage of €250,000

  • Bank of Ireland 2% Cash back plus 1% after 5 years , total cash offer of €7500
  • Permanent TSB 2% Cash back , total cash offer of €5000
  • EBS 2% Cash back 2% cash back , total cash offer of €5000

The current Bank of Ireland variable mortgage rates for first time buyers who are borrowing over 80% of the purchase price is 4.5%. This rate is 1% more expensive than the current variable mortgage rate on offer from KBC, AIB and Haven.

On a mortgage of €250,000 over the 30 years the difference in cost is significant

3.5% variable rate for the full 30 years, total cost of repayments is €404,140 and total interest cost is €154,140

4.5% variable rate for the full 30 years, total cost of repayments is €456,017 and total interest cost is €206,017

Total additional cost of paying 1% in interest over 30 years is €51,877

So €7500 in cash or €51,887 extra in interest repayments , which one would you take?

A bird in the hand is definitely not worth 2 in the bush. Consider your options carefully before you decide on going with these cash offers. See our mortgage guide attached

Last modified on 30-Mar-17
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About Cregan Kelly O'Brien

 

In 2007 Maurice Cregan and Colm Kelly established CK Financial Services to provide independent financial planning and advice to business owners and individuals. Tommy O'Brien, a General Insurance expert, then joined them in 2010, enabling them to meet the full financial needs of their clients. The group has since been renamed Cregan Kelly O'Brien.

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