Q&A

Your property questions answered

Why is penalty for switching so huge?

Q We were clueless first-time buyers just over two years ago when we locked ourselves into a five-year fixed rate mortgage. If we had gone for a variable mortgage, I estimate our repayments would now be lower by €280 per month. I asked our lender – through their mortgage line – and was told that we could switch to a variable rate (not a tracker) but that it would cost close to €10,000 in penalties. How can this be and is there a way around it?

A The penalty for breaking out of a fixed rate mortgage is horrendous – different lenders calculate it in different ways but it’s designed to make sure the lender doesn’t lose out in the amount they planned to make from you in interest payments.

Lenders are maintaining a strict line on this, at least officially, but if you are in serious danger of not meeting your repayments you should sit down with your lender to discuss your options – there are always options, the last thing any lender wants on their hands at the moment is another repossessed house.

If moving onto a lower variable rate is the only way you can meet your repayments (due to unemployment, pay cut, etc), and you have the documentation to support it, then the lender could very well take a pragmatic “case by case” view. We would be interested in hearing from readers who successfully and without penalty moved from a fixed rate mortgage.

Price on application is a turn-off

Q What's the story with "price on application"? I thought it was a country thing but in looking at various property websites I see that it is now being used in Dublin. What's the point? If the agent thinks it prompts interest, it doesn't. It's a turn off.

A Price on application is indeed a silly extra step, because all it takes is a phone call to find out what the asking price is. It’s not as if there is some difficulty in getting the information. For new homes, it’s generally because an agent doesn’t want to broadcast the price drop due to the sensitivities of owners who bought at the top of the market and is also usually an indication that the developer is willing to do a deal.

For second-hand houses it could be the case that the house has been on the market for so long that there have been multiple price drops, with more expected, so the seller feels “price on application” will save on the embarrassment of advertising each of those price drops.

Agents might also feel that if they could get you on the phone even for the minute it takes to tell you the price, they might be able to lure you into a viewing.

Whatever the reason, it’s difficult to argue with you that it is pointless and only serves to irritate, not intrigue, prospective buyers.

BER certs

Last week we incorrectly stated that protected structures require BER certification. In fact they are exempt.

Your questions

Send your queries to Property questions, The Irish Times, The Irish Times Building, 24-28 Tara Street, Dublin 2 or email propertyquestions@irish-times.ie. This column is a readers’ service and is not intended to replace professional advice.