what happens to your motgage if Euro collapses

valor rorghulis

So, Eurozone looking increasingly shaky

Anyone know what happens if it collapses and we revert to an Irish pound? Does the mortgage just convert to that new currency? Would you be in pretty much same position in terms of what you owe?

athtrasna

Moved from Accommodation and Property as a mortgage is a loan and won't get special treatment.

melekalikimaka

Probably get converted back into punt, then the fun begins with inflation

Sleeper12

valor rorghulis wrote:

Anyone know what happens if it collapses and we revert to an Irish pound? Does the mortgage just convert to that new currency? Would you be in pretty much same position in terms of what you owe?

Your mortgage payments will go through the roof. A year into my mortgage I was paying 15%. The good old days of the punt

Alpha_zero

It's not a question if the Euro collapses, rather when it collapses.

nhunter100

Will make trackers interesting.

valor rorghulis

Sleeper12 wrote: »

Your mortgage payments will go through the roof. A year into my mortgage I was paying 15%. The good old days of the punt

This is what I'm thinking is the risk (approved a mortgage though not used it yet though)

However how likely is the massive interest hike? Surely new currency being pegged to sterling be more likely in this day and age. 15% interest rate virtually everyone would default, and that's while we have pretty strong employment rates

Sleeper12

valor rorghulis wrote:

This is what I'm thinking is the risk (approved a mortgage though not used it yet though)

You'll never own a home if you are afraid of the what if. Cautious is good but you have to take a chance sometime. My advice is if you see a house you'd like to call home and you can afford it now, go for it.

valor rorghulis wrote:

However how likely is the massive interest hike? Surely new currency being pegged to sterling be more likely in this day and age. 15% interest rate virtually everyone would default, and that's while we have pretty strong employment rates

We had high interest rates because there were currency speculators. Once they focused on Ireland there was no choice but to put up rates. Don't forget before we joined the Euro the average internet rates in the 20 years before were over 10%.

The scary part was when I was paying 15% the banks were borrowing at up to 70% on the overnight rate. I didn't know if I would be paying 30% the next month. In the end we devalued the punt and all settled down.
I don't think we can pin the new punt to sterling. Id imagine we'd need a deal with the UK that they would bail us out if the punt fell. UK wouldn't be likely to do this.

newacc2015

It will get converted into the new currency. The thing is your wages will be in the new currency, so it wont be too bad. It is a problem if you were like a lot of Polish and Austrians who took out mortgages in Swiss Francs and the Swiss Franc broke the peg. So overnight your mortgage was 30% more.

The fact is Ireland is now awash with savings. So I can't see mortgages being too expensive as we will have a large base to fund mortgages cheaply. I would see it an issue if people believed the new currency was overvalued and funds started to leave the country as rates will have to be hiked to keep the currency in Ireland

Sleeper12

newacc2015 wrote:

The fact is Ireland is now awash with savings. So I can't see mortgages being too expensive as we will have a large base to fund mortgages cheaply. I would see it an issue if people believed the new currency was overvalued and funds started to leave the country as rates will have to be hiked to keep the currency in Ireland

As they said in my mams day "jesus wept"

Sleeper12

Sleeper12 wrote:

As they said in my mams day "jesus wept"

There's a glitch in the materix. Despite what it seems this isn't my quote