Mortgage scheme sparks online surge

SEARCHES for properties that qualify for new Government-backed mortgages surged by almost 10% after the scheme was announced, research has found.

The Affordable Mortgage Scheme is for buyers who earn too much to qualify for social housing but struggle to get a mortgage from the banks.

Those families who qualify can get a loan of up to €288,000.

After it was unveiled 11 days ago on January 22, there was a 9% week-on-week increase in overall searches for homes within that price range, according to property website daft.ie.

The new scheme, which offers lower interest rates than most banks, started yesterday. It enables first-time buyers to get a loan worth up to €288,000, with an interest rate of 2.25% for 30 years or 2% for 25 years.

Daft.ie’s Martin Clancy said: ‘Overall, our research has revealed that the announcement had a very definite impact on the property searches users are now making.’

However, critics say the scheme will simply stoke up prices as lower interest rates mean buyers can afford to borrow more.

David Hall, of the Irish Mortgage Holders’ Organisation, said: ‘When you drop the interest rate by 1% the price goes up by about €30,000 to €40,000 for an average house.’

Mark Whelan, of price comparison site bonkers.ie, said: ‘It’s incredibly attractive relative to the commercial offers but it’s going to be difficult to qualify.’