The contents of this presentation were accurate on the date of presenting - 20th April 2020 - and should be used a s a reference only by those in attendance for the full presentation.
Introduction
Michael Dowling
Dowling Financial
QFA, PIP,CUA, CUC,CUG
APA (Debt Mgt, Per Gen Ins)
M.Inst.D
Background
❑ Bank of Ireland 10 Years
❑ Eagle Star 2 Years
❑ Gunne Financial Services 10 Years
❑ Dowling Financial 15 Years
Background
➢ Founding Member of IMAF
➢ President of IMAF – 7 years
➢ Chairman IBA Mortgage Committee
➢ Brokers Ireland, Financial Services Committee
➢ Vice Chair, Malahide Credit Union - 10 yrs
➢ Chair of Credit Committee/Investment Committee
➢ Mediator
Mortgage Market
Year BN Volume
2017 7.3 28% 34,793 18%
2018 8.7 20% 40,209 15%
2019 9.5 9% 42,787 6%
Interest Rates
AIB/Haven 3.15
EBS 3.70
KBC 4.05 *
Ulster Bank 4.30
ptsb/Bank of Ireland 4.50
Finance Ireland n/a
Dilosk n/a
*Current Account
SVR Standard Variable Rate
Variable Interest Rates
LTV 50% 50-80% 80-90%
Dilosk 2.70 2.95 3.15
Finance Ireland 2.75 2.95 3.15
AIB/Haven 2.75 2.95 3.15
KBC* 3.00 3.05 3.30
Ulster Bank* 3.10 3.20 3.60
EBS 3.30 3.50 3.70
ptsb 3.70 4.00 4.20
Bank of Ireland 3.90 4.20 4.50
*Current Account
3 Year Fixed Interest Rates
LTV <60% 60-80% 80-90%
KBC* 2.25 2.30 2.35
Finance Ireland 2.35 2.40 2.65
Dilosk 2.45 2.50 2.60
AIB/Haven 2.55 2.55 2.55
ptsb** 2.65 2.70 2.90
EBS 2.90 2.90 2.90
Bank of Ireland 3.00 3.00 3.00
Ulster Bank N/A N/A N/A
*Current Account
** > €250K
5 Year Fixed Interest Rates
LTV <60% 60-80% 80-90%
Ulster Bank*** 2.20 2.20 2.60
KBC* 2.40 2.45 2.50
Dilosk 2.40 2.45 2.60
Finance Ireland 2.40 2.45 2.80
AIB/Haven 2.55 2.55 2.55
ptsb** 2.75 2.80 3.00
EBS 2.90 2.90 2.90
Bank of Ireland 3.00 3.00 3.00
*Current Account
** > €250K
***> €300k
7 Year Fixed Interest Rates
LTV <60% 60-80% 80-90%
ptsb 2.9 3.00 3.15
Ulster Bank* 2.99 2.99 2.99
Finance Ireland 2.95 3.40 3.60
AIB/Haven 3.15 3.15 3.15
*Current Account
10 Year Fixed Interest Rates
LTV <60% 60-80% 80-90%
KBC* 2.85 2.99 3.20
Ulster Bank 2.95 2.95 3.15
AIB/Haven 3.30 3.30 3.30
Bank of Ireland 3.30 3.30 3.50
*Current Account
75% Fixed Rates Ireland Q1 2020
85% Fixed Rates Europe
10% Fixed Rates Ireland 2014
BTL Interest Rates
Variable Fixed
LTV <50% 50-70% 3 Year 5 Year
Dilosk 3.75 3.95
Finance Ireland 3.75 3.95
KBC* 4.50 4.80 5.25 5.25
Ulster Bank* 4.50 4.95 5.40
Bank of Ireland 4.60 4.80 5.10
AIB 4.85 4.85 5.95 6.35
ptsb** 4.80 5.05 4.65 4.85
Market Share
2019 2018 2017
❑ AIB/EBS/Haven 31% 31% 33%
❑ Bank of Ireland 24% 23% 27%
❑ Ulster Bank 15% 16% 14%
❑ ptsb 15% 15% 13%
❑ KBC 12% 12% 12%
❑ Finance Ireland/Dilosk 3% 3% N/A
New Lending CriteriaExceptions
❑ 20% of New Lending LTI > 3.5 Gross Salary FTB only
❑ 5% of New Lending < 90% LTV FTB only
❑ 20% of New Lending LTV > 80% SSB’s only
❑ 10% of New Lending LTI > 3.5 Gross Salary SSB’s only
❑ 10% of New Lending LTV (BTL) above 70%
❑ 2% of lending had both exceptions - 2019
Euro Zone – Mortgage Rates Q1 2020
❑ Ireland 2.91%
❑ Average 1.35%
❑ 30 Year Mtg €180 PM - €2,160 PA - €64,800
❑ WHY???
❑ Average Loan FTB €229,264
Euro Zone – Mortgage Rates Q1 2020
❑ Levels of Capital
€50 for every €1,000 of mortgage lending – Ireland
€20 for every €1,000 of mortgage lending – Europe
❑ Level of Mortgage Arrears
❑ Length of Time of Court Repossession *
42 months Ireland
18 months UK, Denmark, Norway & Sweden
24 months Holland & Finland
30 months Germany & Austria
*Standard & Poor’s
Median Deposits - FTB
Average Deposit Q4 2019
Dublin €50,000
Cork/Limerick/Galway €34,000
Nationwide €37,500
Source: Banking & Payments Federation Ireland (BPFI)
Median Deposits - SSB
Average Deposit Q4 2019
Dublin €136,000
Cork/Limerick/Galway €73,000
Nationwide €95,000
BPFI HOUSING MARKET MONITOR Q2/2019MORTGAGES
www.bpfi.iewww.bpfi.ie
BPFI HOUSING MARKET MONITOR Q2/2019MORTGAGES
www.bpfi.iewww.bpfi.ie
STRESS TESTING
€250,000 30 year term
Repayment @ 3.25% €1,088
Stressed @ 5.25% €1,381
Exemption €1,381 x 25% €1,726
New Lending Criteria
Exemptions
Loan to Value & Loan to Income do not apply to
➢ Switcher Mortgages
➢ Negative Equity Mortgages
➢ Arrears Resolution
➢ Lifetime Mortgages
New Lending Criteria
❑ FIRST TIME BUYER (FTB) - SINGLE NO ISSUE
❑ ONE FTB, SECOND NOT - MAX 80%
❑ BOTH DEFINED AS NON FTB
Lending Criteria
TERM OF MORTGAGE AGE
AIB/EBS/HAVEN/ULSTER BANK*
Finance Ireland
KBC
Bank of Ireland/ptsb/Dilosk
68
67
68
70
SELF EMPLOYED* 70
Tilda Project
❑ Survey – 4,000 people (age 54+)
❑ 48% provide financial assistance to their children
Rebuilding Ireland – Home Loan
❑ Launched 1st February 2018
❑ €200m Fund over 3 years
❑ €210m Used by 2018
❑ €363m Additional Funds - August 2019
❑ New Purchase or Build and Second Hand Homes
❑ Must be FTB
❑ Single applicant €50,000 max salary
❑ Joint applicants €75,000 max salary
Rebuilding Ireland – Home Loan
❑ First applicant – PAYE, continuous employment for 2 years (not
permanent)
❑ Second applicant – PAYE, continuous employment 1 year
❑ Self Employed – 2 years Certified Accounts
❑ Declined by 2 Banks or offered “insufficient finance”
Rebuilding Ireland – Home Loan
❑ 90% Purchase Price – Max Loan
❑ Max Purchase Price €320,000 – Dublin , Cork, Galway,
Kildare, Louth, Meath & Wicklow
❑ Max Purchase Price €250,000 - rest of country
Rebuilding Ireland – Home Loan
❑ “side step” Central Bank Macro Prudential Rules
❑ Ability to service debt
❑ Max 30% of income to service mortgage
❑ Local Authorities – Unregulated Financial Providers
Rebuilding Ireland – Home Loan
Single Applicant €40,000 Salary
Bank
❑ Qualify for €140,000
❑ Equates to 3.5 times Gross
Salary
RI – Home Loan
❑ Qualify for €198,000
❑ Equates to 5 times Gross
Salary
Rebuilding Ireland – Home Loan
Joint Applicants €75,000 Salary
Bank
❑ Qualify for €262,500
❑ Equates to 3.5 times Gross
Salary
RI – Home Loan
❑ Qualify for €288,000
❑ Equates to 4.1 times Gross
Salary
Rebuilding Ireland – Home LoanInterest Rates
❑ 25 Year Term 2.745% Fixed
❑ 30 Year Term 2.995% Fixed
Rebuilding Ireland – Home Loan€198,000 @ 2.745% Fixed - 25 Year Term
RI Home Loan
❑ Repayment €913 per
month
Bank
❑ Repayment €954 per
month
❑ (10 Year Fixed)
Rebuilding Ireland – Home Loan€198,000 @ 2.995% - Fixed 30 Year Term
RI Home Loan
❑ Repayment €834 per
month
❑ HELP TO BUY GRANT
AVAILABLE AS WELL
Bank
❑ Repayment €851 per
month
❑ (10 Year Fixed)
COVID 19 MORTGAGES
❑ WILL BANKS STOP TAKING APPLICATIONS – UK, YES
❑ EXCEPTIONS WITHDRAWN BY ULSTER BANK, PTSB & EBS
ALL MAY FOLLOW
❑ LTV IMPACTED – DILOSK 80% MAX
❑ INCOME/EMPLOYMENT SUSTAINABILITY
❑ SELF EMPLOYED – WAIT 12 MONTHS ?
❑ VALUATION REPORTS – 10% OFF SALE AGREED PRICES
COVID 19 MORTGAGES
❑ ALL BANKS ADDED COVID 19 EMPLOYMENT CLAUSE:
Subject to confirmation from the employer prior to drawdown that
the income, including variable income (bonus, commission,
overtime) is not affected in anyway and confirmation that terms and
conditions will not be adversely affected going forward (please
consider this before signing contracts as we may withdraw this offer
if it cannot be fulfilled)
Housing Market Q4 2020
Average Prices
•Nationwide €256,338
•Dublin City €327,379
•Dublin South €578,776
•Dublin North €317,420
•Cork City €278,993
•Galway City €290,812
•Limerick €201,778
COVID – PROPERTY MARKET
❑ UK GOVERNMENT MINISTER SAID NO SALES SHOULD TAKE PLACE
❑ VIEWINGS NOT POSSIBLE
❑ VALUATION REPORTS NOT POSSIBLE
❑ STRUCTURAL SURVEY NOT POSSIBLE
COVID – PROPERTY MARKET
❑ PRAI – PROPERTY REGISGRATION AUTHORITY OF IRELAND
OFFICE CLOSED 27TH MARCH
❑ TITLE REGISTRATION SERVICES TEMPORARILY SUSPENDED
❑ SOLICITORS ( ESSENTIAL SERVICE) ??
COVID – PROPERTY MARKET
❑ DAVYS 20% FALL IN PRICES NEW HOMES
❑ UP TO 20% FALL IN SECOND HAND PRICES POSSIBLE
❑ NEW HOMES CONSTRUCTION
❑ 25,000 EXPECTED 2020
❑ 16,000 REALITY, 35% REDUCTION
HELP TO BUY SCHEME
New Properties
First Time Buyers Both
if joint application
Capped at €20,000 or 5% of Purchase
Price
Purchase Price €200,000
Max Rebate €10,000
Min Mortgage 70% of Purchase Price
Max Claim €20,000
€400-€500k Price
Max Purchase Price €500,000
HELP TO BUY SCHEMEFeb 2020
❑ Based on Income Tax paid in the previous four years
❑ 39,330 applications July 2016 – February 2020
❑ €275 Million
❑ Average claim €14,812
❑ 18,566 claims paid
❑ 10,587 (57%) – Dublin, Meath, Kildare & Wicklow
❑ Applications equal to 50% of FTB who took out mortgage
❑ Extended to December, 2021
Non Performing Loans (NPL)
2019 2018 2017
❑ KBC 16% 25% 35%
❑ Ulster Bank 10% 12% 16%
❑ PTSB 6% 16% 26%
❑ AIB 5% 9% 16%
❑ Bank of Ireland 4% 5% 8%
❑ EU Average 4%
Mortgage Arrears – Q4 2019 PDH
Number Balance €BN Arrears € BN
88% Bank
12% Non Bank
751,708 98,149,886
>90 days
22% Bank
78% Non Bank
42,065 - 6.0% 7,924,138 – 8.1% 2,612,660
>720 days
27% Bank
73% Non Bank
27,085 - 4% 5,746,011 6% 2,363,539
Properties Repossessed2010 - 2019
9,200
0.5% Housing Stock
66%
Voluntary Surrender
Q4 2019 768 Banks
253 Non Bank
Alternative options
Icare
€100m fund – AIB
MTR (Mortgage to Rent) 8,000 Potential
Home for Life
€100m fund - ptsb
MTR (Mortgage to Rent)
Vulture Funds – PDH & BTL
Voluntary surrender /refinance less than balance/residual debt written off.
Mortgage Arrears – Q2 2019Buy to Let
Number Balance €BN Arrears € BN
75% Bank
24% Non Bank
103,678 17,008,549
>90 days
24% Bank
76% Non Bank
13,901 – 13.4% 3,624,530– 21% 1,563,765
>720 days
28% Bank
72% Non Bank
10,365 - 10% 2,898,015 - 17% 1,400,934
Properties Repossessed2010 - 2019
3,60032%
voluntary surrender
Q4 2019 - 1,053 in Possession - 476 Bank – 577 Non Bank
5,164 in Receivership
COVID – PAYMENT BREAK
❑ BPFI & NON BANK RETAIL & CREDIT SERVICING FORMS
❑ INITIAL 3 MONTH MORATORIUM
❑ OR
❑ INTERST ONLY
❑ APPLIES TO PDH & BTL
COVID – PAYMENT BREAK
❑ IF IN ARREARS OR NOT UP TO DATE IN REPAYMENTS – CASE BY CASE
❑ BTL – TENANT NOT PAYING RENT
❑ AIB & KBC OFFERING UP TO 6 MONTH MORATORIUM
COVID – PAYMENT BREAK
❑ €100,000 MORTGAGE
3% INTEREST RATE
10 YEAR TERM
€965 – €994
25 YEAR TERM
€474 - €481
❑ AT 10TH APRIL – 45,000 MORTGAGE HOLDERS AVAILED OF THE PAYMENT BREAK (5%)
Positive News
❑ NTMA raised €6Bn 7th April
❑ Over Subscribed by 5.5 times
❑ Demand €33Bn - 84% Overseas Investors
❑ 7 Year Bond
❑ 0.24% Coupon
❑ Annual Cost €48m
❑ GFC Annual Cost €1.Bn
Positive News
❑ FSPO Annual Report 2019
❑ 5,275 Complaints Received
❑ 322 (6%) Against Intermediaries
❑ 17 (5%) Were Upheld, Upheld Substanially or Partially Upheld
❑ Ulster Bank 21
❑ Irish Life 20
❑ Bank of Ireland 16
❑ AIB 15