Shared equity to start.

mariaalice

https://www.rte.ie/lifestyle/living/2022/0705/1308504-first-home-scheme-explained/

shawki

I had a disaster with BOI regarding getting the ball rolling on this.

They told me that they won’t be offering mortgages on these types of properties which sounds bonkers to me.

rtron

You've only got to wait 5 years to see what happens the money you owe the government in terms of the interest on it:

Now you can see the benefits in black and white. Remains to be seen though what happens after 5 years – watch this space.

walshtipp

https://www.boards.ie/discussion/comment/119301306#Comment_119301306

No need to wait five years. The government published these rates in September 2021.

The following service charge rates will apply to the equity share:

o 0-5 years: 0%

o 6-15 years: 1.75%

o 16-29 years: 2.15%

o 30+ years: 2.85%

GoneHome

Not a chance will this work, it's like buying a car with a big bubble payment at the end, only a fool will fall for it

newmember2

Let us see if we can keep those prices high and get the paple into even more hock!!

Lemon Davis lll

Anyone found a link to the scheme?

IT says it's gone live today but drawing a blank here

EoinMcLovin

https://www.boards.ie/discussion/comment/119302416#Comment_119302416

https://www.firsthomescheme.ie/

shawki

“Is my/our income considered as part of the eligibility criteria under the FHS?

No. There is no upper or lower household income limit to be eligible for the FHS. Income is not considered for the FHS.”

Doesn't seem like the right move.

JohnnyChimpo

https://www.boards.ie/discussion/comment/119304546#Comment_119304546

definitely the right move if you're only interested in goosing prices, otherwise no definitely not

Arun Thomas

Anyone know when to apply for this. We have to fill the address of the property we are buying for .So when to apply for that

dennyk

https://www.boards.ie/discussion/comment/119301268#Comment_119301268

Makes sense that they wouldn't want to; the bank doesn't want to have to share their claim to the full value of your property with any third party, and especially not with a government entity they'd have no hope of ever contesting. If you default and the bank repossesses and sells the property, the government would get 30% of that sale price; if your mortgage was underwater to begin with, that leaves the bank taking an even bigger loss. Same reason they demand an affidavit explicitly waiving any claim to the property or expectation of repayment if a family member gifts you money for your deposit.

That said, supposedly BoI is one of the "participating lenders" in this scheme, so it is a bit odd that they wouldn't be participating...

Donald Trump

Yet another subvention by the government to artificially push up prices for the benefit of those who already own it

timmyntc

https://www.boards.ie/discussion/comment/119367199#Comment_119367199

Where does this BS narrative come from, that all homeowners are looking for an increase in their house prices?

If I sell my house, I have to buy another one. If mine has gone up in value, so has any potential new house I might buy. Its a zero sum game.

The only people who benefit from rising house prices are the investor class, a minority of people who have parked money in extra property that they do not need or live in, merely use as a speculative asset. Most homeowners do not want rising prices, as that means more LPT.

Donald Trump

https://www.boards.ie/discussion/comment/119367397#Comment_119367397

Where does this BS narrative come from, that all homeowners are looking for an increase in their house prices?

You would be best placed to tell us where it comes from ............. you were the one to bring it up out of nowhere.

Wanderer78

https://www.boards.ie/discussion/comment/119367199#Comment_119367199

https://www.boards.ie/discussion/comment/119367397#Comment_119367397

...virtually every country that has implemented such polices have experienced this outcome, so yea, thats what its for!

...again, polices are designed to maintain a process of continual asset price inflation, cause everyone's a winner, and ta hell with the consequences, this approach is now starting to collapse!

timmyntc

https://www.boards.ie/discussion/comment/119367413#Comment_119367413

You say the government push up prices for the benefit of those who already own it - the reality as I pointed out is the opposite. 99% of homeowners are at a disadvantage from rising house prices, more tax due, no benefit when moving house.

https://www.boards.ie/discussion/comment/119367432#Comment_119367432

Everyone is not a winner, house price inflation does not benefit homeowners. It benefits the taxman alright, more stamp duty, more LPT. Not the homeowner.

Wanderer78

https://www.boards.ie/discussion/comment/119367442#Comment_119367442

...it actually does benefit the home owner, as the value of the asset can be used to gain access to even more credit, for further asset accumulation, if thats desired, hence why we re now in the situation whereby asset accumulation is accelerating, primarily towards older generations, hence away from younger generations, i.e. leading to rapidly rising wealth inequality, and all that entails....

Donald Trump

https://www.boards.ie/discussion/comment/119367442#Comment_119367442

Try upgrading from that starter 1-bed apartment with your wife and now two kids when your outstanding mortgage is 200k and the apartment is worth 100k.

Were you not aware that most banks will offer lower raters for lower LTV ratios? You'll get a nicer rate to refinance that 200k mortgage on that apartment if its market value is now 400k. 0.5 LTV baby.

Thinking of taking out a personal loan for 50k to go back to do further study? Well, you can make a choice between a 12% interest rate at your local friendly credit union or releasing some of that 200k equity that you have in your own home and paying mortgage rates on it.

Yes, they do it for your benefit. Even if you don't realise it or didn't ask specifically for it.

timmyntc

https://www.boards.ie/discussion/comment/119367517#Comment_119367517

Negative equity is a separate, distinct issue. Positive equity as resukt of house price inflation does not aid in "moving up the ladder" as all prices have risen, not just your house.

rob316

The other side of the coin, is if prices fall significantly in the 5 years you can buy out the equity for alot less than the state signed on for. So getting into this at the top of the market may not necessarily be a bad thing but I do agree its going to be a free pass for developers to throw on another 20/30k per unit.

Donald Trump

https://www.boards.ie/discussion/comment/119367613#Comment_119367613

Of course it does. See earlier point about lower rates on lower LTVs. For a more simplistic example, see the below.

Timmy saves up 50k. gets a mortgage for 200k and buys an apartment for 250k. After 5 years he owes 170k on the mortgage. He would like to "move up the ladder". He will use the equity in his current place as a deposit for his new place. He needs a 20% deposit for the new mortgage.

Scenario 1:

Timmy's apartment rise to 260k. He sells his apartment, pays off mortgage and uses his 90k equity as a deposit on a 450k house.

Scenario 2:

Timmy's apartment is now worth 500k. He sells his apartment, pays off the mortgage and uses his 340k as a deposit for a 1.7m house.

Yes he's paying more on the other end too. But he is now in a house that he would not have been able to afford had his apartment not increased in value. We can assume that the house in scenario 2 would have been out of his range at about 850k under scenario 1.

JohnnyChimpo

Theres a bit of talking at cross-purposes going on. Rising property values can benefit homeowners - Lower LTV = lower repayments and increased equity for further capital accumulation (as per above example)

However, lowering property values can also benefit homeowners looking to upgrade because the delta between House A and larger House B will be less, and higher-value properties are usually hit harder in a market contraction.

Conversely, homeowners looking to exit the market or downsize may appreciate rising property values because they get a larger delta between House B and smaller House C, realised as cash.

Homeowners may also not wish prices to rise so much when they realise that their kids will be priced out of living in the same postcode as them and they'll never get to see their grandkids.

Basically, homeowners are a heterogenous group with differing interests, though probably a majority would actively hope for rising values because they tend not to think about it too much, and Number Goes Up will create a positive association. Government policy definitely caters to this ambient feeling, but I think moreso the Govt are motivated to do everything in their power to avert a property market collapse. That's the one scenario that no homeowner wants, because the majority of working-class capital in this country is tied up in property. However, since Govt refuses to build property itself, it only has so many levers it can pull to prevent the property bubble popping, hence we get these transparently inflationary schemes like HTB and Shared Equity