Renters are paying €282 more monthly than mortgage holders in Co. Tipperary.
That’s according to moneysherpa.ie who have based their finds on the latest DAFT Rental Price Report.
Renters in the Premier County are paying €1001 while the homeowners are paying €719 in monthly mortgage payments.
The data shows that there’s a growing gap between buyers and renters both locally and nationally.
The figures show renters will pay €101,389 more than people paying for mortgages in Co. Tipperary – this is over a 30-year period.
The Irish Central Bank imposed lending limit of 3.5 times salary is one of the strictest lending caps in Europe, with would-be buyers being forced to continue renting as they are unable to get a mortgage due to the bank’s rules.
The combination of ‘trapped’ renters and a shortage of new rental supply has led to the spiraling rent inflation seen in the recent DAFT.ie report, with rents up 10.3% year on year on average across the country.
The moneysherpa.ie analysis takes the DAFT.ie rent data and compares it to the equivalent monthly mortgage repayment. Based on the 30 year fixed rate mortgage available from Avant Money for a home of the same value assuming a loan to value of 90%.
Commenting on the analysis Mark Coan of moneysherpa.ie said
“This analysis raises some significant questions about the current Central Bank lending rules, which are in effect creating a chasm between those who can afford property and those that can not.”
“Those that can meet the current lending rules, will pay over €100,000 less to live in their home for 30 years and create an asset that they can pass onto the next generation. “
“Those that can’t, even though they are paying a monthly rent that would be more than their mortgage repayments, are €100,000 worse off and will accumulate no assets after paying 30 years of rent.
“With fixed mortgage rates now available for 30 years there is less risk of current renters defaulting on their mortgage than on their rapidly rising rents. The Central Bank lending rules have to change and change soon to reflect that new reality.”
“The idea that relaxing the rules will inflate housing costs further is misguided, housing cost inflation is due to lack of supply and is already here in the form of rising rents. Relaxing the rules will simply allow more people to own their own homes and help become financially secure”
Moneysherpa.ie has also developed a free online calculator that can be used to calculate how your own monthly rent would compare to a mortgage repayment.
