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Buying your first home can be a stressful experience, here’s all you need to know

With so many seemingly attractive offers out there to lure first time buyers it can be hard to navigate the mortgage market.

We spoke to Áine Carroll, Director of Communications and Marketing Insights of the Competition and Consumer Protection Commission (CCPC) about how first-time buyers can cut through the noise in the mortgage market and make sure that they get the deal and mortgage that is in their financial interest in the long term.

Compare mortgage interest rates

The most important thing to consider when looking at getting a mortgage is the interest rate on the loan. The interest rate, along with the term, will determine how much your monthly repayments will be and the actual cost over the life of the mortgage.

Just because you do your day-to-day-banking with a certain bank, doesn’t mean you have to take out your mortgage with that bank.

It’s really important that you shop around and compare mortgages from as many different lenders as possible. Buying your first home is the biggest financial decision you will make and you need to make sure you’re getting the best deal. You can use the CCPC’s mortgage comparison tool to see all the competing rates in one place, including your potential monthly repayments and the cost of credit over the lifetime of the mortgage. All the rates, both variable and fixed, are shown so you can compare all of your options.

Don’t be blinded by special offers

Many lenders have attractive ‘cash back’ offers or will pay your legal fees if you take out a mortgage with them. The lure of cash back at such an expensive time is hard to resist – especially when you have a new home to furnish, a solicitor to pay and maybe management fees. But don’t let a cashback offer distract you – the most important thing to focus on is the interest rate as even a small difference in the rate could save you thousands of euro over the life of your mortgage. For example, if you are borrowing €270,000 over 30 years, the difference between the lowest and highest rate could save you over €50,000 over the life of your mortgage.

Get your finances in order first

When buying your first home you’ll need a minimum of 10% of the value of the house as a deposit. You may have assistance from someone in helping you get your deposit together, but the bank will want to see where the money has come from. The bank will need to ensure that you can afford the repayments and and a record of being able to save money regularly is important to show in that context. All your incomings and outgoings, including loans and other financial commitments, will be considered by the lender when you apply for a mortgage.

The CCPC has a mortgage comparison tool on their website here where you can get the most up-to-date information on the lenders and the mortgage products they offer. The tool is updated daily so with one easy step you will know exactly which lender is offering the best value for you in the long term.

The CCPC also has a buying a home step-by-step guide which covers everything from saving a deposit, hiring a solicitor to closing the mortgage deal.

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