Questions and answers

1. What does the total cost of my loan include?
2. What does interest cover?
3. How is interested calculated?
4. How can I calculate the total cost of my loan?
5. What are the housing loan up front charges?
6. What other charges and costs might be payable over the loan repayment term?
7. How can I postpone payment of my instalment?

 

1. What does the total cost of my loan include?

  •  interest
  •  the Bank’s up front charges for granting the loan
  •  the up front charges you have to pay to the state and/or third parties for the grant of the loan
  •  the charges / costs which may arise at a subsequent stage, until final repayment of the loan.

2. What does interest cover?

Interest accrues during the loan repayment period and is calculated based on the interest rate agreed when the loan is approved.

Selecting the interest rate:

  •  It is up to you decide whether your housing loan will have a variable or a fixed interest rate for a specific time period.
  •  Loans with variable rates change over time, with the interest rate either rising or falling over the entire duration of the loan. The base rate can either be the Euribor 6M rate or the Bank's base rate for housing loans. Interest rates change depending on market conditions.
  •  Loans with a fixed interest rate remain the same for 3 or 5 years and then become loans with a variable rate, based on either the Euribor 6M rate or the Bank’s base rate for housing loans.
  •  Before selecting the interest rate, you should decide whether you prefer the stability of a fixed rate or the benefits / additional costs that could arise from a loan with a variable interest rate.

3. How is interest calculated?

  •  Interest is always calculated on your daily loan balance. As a result, over time the interest reduces because the loan balance is also reducing.
  •  Interest is calculated by multiplying the daily loan interest rate by the daily balance.

 

4. How can I calculate the total cost of my loan?

Find out about your loan’s APR. The APR (the Annual Percentage Rate) is the total cost of your loan (including interest and all bank charges you have to pay) expressed as an annual percentage of the amount you have borrowed.

The APR gives you an overall picture of the total cost of your loan and is the best tool available to you to compare different products from the same Bank or from other banks.

Example:

A housing loan for € 100,000 charged with Bank Base Rate for housing loans (BBHR) + margin 2%, repayable over a period of 20 years, with up front charges of € 1075 (arrangement fees of 1% and documentation fees of € 75) has an APR of 5.50%.

 

5. What are the housing loan up front charges?

Housing loans are subject to up front charges which are payable once when the loan is taken out. These charges are as follows:

Bank initial charges

  •  Arrangement fees: these are 1% for housing loans 
  •  Documentation fees: these fees are collected when the loan is prepared. They are € 40 for loans of up to € 20,000 and € 75 for loans over € 20,000.

Government initial charges:

  •  The mortgage registration fee which is 1% of the mortgage value. This is payable to the Land Registry.
  •  Stamp duty costs for the loan documentation in line with instructions provided by the Commissioner for Stamp Duty.
  •  Charges payable to the Land Registry when a property needs to be transferred from one owner to another. The cost is 3% for amounts from zero to € 85,430, 5% for amounts from € 85,430 to € 170,000 and 8% for amounts over € 170,000.

Third party initial charges:

  •  Expenses relating to valuation of the property to be mortgaged.

6. What other charges and costs might be payable over the loan repayment term?

Loan cancellation:

  •  If a decision approving a loan is cancelled, the cost is 0.5% of the amount of financing requested, subject to a maximum limit of € 850.
  •  This amount is only payable if the application has been opened on the system and approved and you then ask for the loan to be cancelled.

Loan disbursement:

  •  When a loan is drawn down, Loan Disbursement charges are payable. If you draw down the loan in stages a charge of € 20 will be applied to each drawdown. If you draw down the whole loan immediately, there will be no charge applied.

Early repayment of the loan:

  •  When a loan with fixed interest (at any time during the life of the loan) is repaid  early, in full or installments are paid prematurely, in relation to the agreed repayment schedule, then there is a possibility that you will be charged with early repayment fees.
  • Floating rate loans have no early repayment fees. 

Instalments in arrears:

  •  If you do not repay your loan as agreed, additional charges will be applied. For the first 60 days of arrears you will be automatically charged €5 per month. After the first 60 days of arrears you will be automatically charged €20 per month.   Furthermore, an additional interest rate of 2.00% will be imposed on the amount of the loan instalment in arrears.
  •  These charges can be avoided by properly planning your finances and by remaining in continuous contact with your personal banker.

7. How can I postpone my instalment?

If you give sufficient notice to the Bank, you can use your right to postpone payment of up to 2 monthly instalments per year (or a total of 24 instalments over the entire term of the loan) without incurring any charges.

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