Covered in this report
This rport 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 (buy-to-let) 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.
"Over the next few years, the mortgage market will be characterised by relative caution and steadiness rather than anything dramatic. While demand for mortgages remains strong, uncertainty over Brexit - and, more specifically, the impact it may have on the general economy and consumers' personal financial situations - together with tight lending criteria will ensure things remain sedate and ordered."
– Brian O’Connor, Senior Consumer Analyst