Housing Loans
Core concepts
Mortgage questions test loan-to-value (LTV), repayment vs interest-only, fixed vs variable rates, tracker vs standard variable, APRC, term, deposit, and affordability. Know mortgage protection (life cover matching the loan), mortgage indemnity guarantee (MIG), and buildings insurance requirements.
Understand early repayment charges, portability, overpayment rules, and arrears consequences. Know first-time buyer schemes and central bank loan limits (LTV and loan-to-income caps).
Traps
- Confusing APRC (total cost including fees) with the headline rate.
- Assuming a fixed rate protects against all rate changes - it only fixes for the fixed term.
- Forgetting interest-only mortgages require a repayment vehicle.
- Mixing MIG (lender protection) with mortgage protection (borrower life cover).
Rule of thumb
Higher LTV = higher risk = higher rate. Reducing the LTV (bigger deposit) usually lowers the interest rate.
Worked example
A €300,000 home with a €270,000 loan is 90% LTV. Adding €30,000 to the deposit reduces LTV to 80%, often unlocking a lower rate band.