Bank of Ireland is to offer first-time buyers a sum to the value of 1 per cent of their mortgage to pay towards stamp duty costs.
All first-time buyer mortgages drawn down between now and September 30th will be entitled to the deal, the bank announced today.
“Bank of Ireland understands that stamp duty is a significant expense particularly for first-time buyers who are trying to get onto the property ladder,” it said in a statement.
Speaking about the offer, Bank of Ireland’s head of mortgages Aine McCleary said stamp duty was a “significant expense” for people trying to purchase their first home.
“First-time buyers represented almost half of the new mortgage market in value terms in 2013 and we are seeing demand from all parts of the country, particularly now as property prices have stabilised outside Dublin,” she said.
Mortgage approvals to the value of more than €2 billion have been granted since October 2012 under the bank’s First-Time Buyer and Mover fund, she said, with a further €2 billion available to meet current and anticipated demand.
Ms McCleary said house affordability was at its best level since 1998 due to the fall in house prices, and many first-time buyers would be in a good position to purchase now having accumulated “sizeable deposits” while waiting for the property market to stabilise in recent years.
Director of the Association of Expert Mortgage Advisors Ken Murray warned that while initiatives designed to help first-time buyers were welcome, schemes such as this may “have a serious impact in stimulating activity in what is already a very active market”.
“Until we address the big issue of the supply (or lack of) of suitable housing to the market, schemes such as the one BOI have announced, may in fact further exacerbate the issues by bringing additional first time buyers to the market who may otherwise have held off on buying for the foreseeable future,” he said.
Borrowers should research all options available to them and “take a long term view on the overall cost of the mortgage versus the up-front benefit of these initially very appealing offers”, he added.
