Managing Debt - Cost of credit
Cost of credit
The following example, estimates the impact a financial arrangement* may have on the total cost of credit on your mortgage.
This illustration is based on a typical €100,000, 20 year standard variable rate mortgage at 4.8% APR, with the cost per month of €640.77 excluding insurance. The total amount repayable is €153,784.80. **The total cost of credit (total amount repayable - mortgage amount) is €53,784.80. If rates increase by 1% an additional €55.62 would be payable monthly. The total cost of credit with a 1% increase is €67,133.60.
This example shows a mortgage that was drawn down two years prior to an arrangement being put in place.
| Arrangement | Term | Monthly payment prior to the deal | *Monthly repayment during the period of the deal | Monthly payment when the deal ends | As a result of this temporary arrangement, the total cost of the credit may increase by |
|---|---|---|---|---|---|
| Interest only | 12 months | €640.77 | €363.94 | €664.87 | €1,570.15 |
| Payment reduced by €340 | 6 months | €640.77 | €300.77 | €655.13 | €959.84 |
| Moratorium | 6 months | €640.77 | €0.00 | €667.83 | €1,808.92 |
| Term extension | 5 years | €640.77 | €541.83 | €551.94 | €14,568.57 |
* Flexible payment options may appear cheaper in the short term but could be more expensive over the life of the mortgage and are subject to approval.
** The total cost of credit is the total amount repayable less the amount of the original mortgage value. For illustration purposes it is calculated using a variable interest rate and is therefore subject to change. Rates and repayments are correct as of the 30th November 2012 and are subject to change.
WARNING: YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP PAYMENTS ON A MORTGAGE OR ANY OTHER LOAN SECURED ON IT.
VARIABLE RATE LOANS: THE PAYMENT RATES ON THIS HOUSING LOAN MAY BE ADJUSTED BY THE LENDER FROM TIME TO TIME.
