It's your Mortgage Day!
75% say savings over life of the mortgage biggest consideration when choosing a mortgage. 3 out of 4 movers prioritise space, growing family & better location.
New research conducted by KBC Bank reveals that a significant proportion of Ireland’s 25 – 40 year old homeowners are on the move. One in four (23%) home owners surveyed said they plan to move property in the next year, with a further 7% having recently traded up to a larger property.
The research revealed that achieving better value (savings) over the life of the mortgage is the most important consideration for the majority of consumers choosing a mortgage (75%), and that this is an especially important consideration for female home owners (81%) looking to move. Of less importance were cash incentives (16%) and a discounted rate in the first year of the mortgage (9%).
The average budget that respondents have to spend on a new home is just under €210,000 (€209,300). Six in ten (57%) plan to spend less than €200k on a house, with one in four (24%) forecasting between €200k-€300k, and a further 14% budgeting for €300k-€400k. More men (11%) than women (2%) plan to spend over €400k on their next property. Conversely, more women (59%) than men (50%) have less than €200k to spend.
Half of respondents (50%) cited the need for more space or to accommodate a growing family as the primary reason for moving, particularly among female respondents (83%), while the desire to live in a better location was deemed a priority by one in four (25%). One in ten (10%) said that they wanted to invest in a higher value property for the future, and a small proportion (2%) of home owners said that noisy or annoying neighbours are the reason for the move. An additional 3% of female respondents want to be closer to family or relatives.
Discussing the research, Dara Deering, Executive Director and Head of Retail Banking, KBC Bank Ireland:
“The market is certainly more buoyant at the moment and our research indicates a strong level of movement by 25 - 40 year old home owners over the next year. Having been through the process already, this cohort tends to be very savvy in terms of shopping around and they know what they want in relation to a property, area or mortgage. Significantly, the research shows that consumers in this group are thinking long-term with lifetime savings a big deciding factor when it comes to choosing a mortgage.
For those moving property or trading up, KBC has a great range of mortgage options designed to help with the move. We recently announced changes to our range of competitive fixed and variable rate mortgage options for both new and existing customers resulting in significant savings for mortgage holders. Customers can also opt for a 0.20% lifetime discount on their variable rate with a KBC current account. In addition, for mortgages drawn down before 31st December this year, customers can also avail of 50% off KBC Home Insurance for a year.”
While mortgage (75%) and savings (47%) emerged as the primary sources of finance for purchasing a property, male respondents (65%) are in a significantly better position to fund the move from their savings compared to female buyers (40%). A further 15% of respondents plan to use a financial gift (8%) and or their inheritance (7%) to cover the cost.
Eight out of ten (79%) respondents cited a range of factors holding back their property purchase. Chief among these were rising property prices (44%) and being unable to find a suitable property (31%). More women (35%) than men (20%) said they haven’t yet found a property that they like. One in five (21%) said that they are being outbid in the process, and this was most evident among male bidders (30%) compared to their female counterparts (18%). A further 13% highlighted cash buyers as an issue, again affecting more male (25%) than female purchasers (9%).
Of those who recently purchased property, four in five (82%) plan to carry out some form of renovation or redecoration work at home. The most common jobs include small cosmetic improvements (41%) and a fresh paint job (41%), followed by the installation of a new kitchen (35%). One in four (24%) said their property needs a complete makeover, with this the case for significantly more male respondents (33%) than females (18%) – perhaps suggesting that these male purchasers were more willing to buy property in need of major modernisation.
The research also revealed that almost three in ten (28%) home insurance policies are reviewed and switched when moving or trading up, with males more likely (50%) to do so than female buyers (18%).
The research was conducted by iReach on behalf of KBC Bank Ireland using a nationally representative survey of 500 adults.