Three weeks ago, NAMA said that it had sold €21m of Irish residential property offered with its so-called “negative equity” mortgage – that’s the mortgage which protects you against future declines in the value of your property, up to 20% over five years. NAMA had offered a cumulative total of 285 homes with the product, and this morning it has announced it is widening the scheme with an additional 100 homes offered for sale with the product.
The new offerings are in counties Dublin, Cork, Limerick and Wicklow. They range in size from two-bedroom apartments to five-bedroom houses, with prices ranging from €95,000 to €370,000. But remember, NAMA has in the past slashed the asking prices for some of these schemes, so don’t take these as fixed prices even if there is a negative equity promotion. NAMA has even produced a little brochure available here.
NAMA says today that its sales total under the scheme have gone up to €22m representing 120 homes or an average of €183,000 each.
NAMA reiterates today what the 80:20 initiative is, as follows
NAMA does not own the properties and is not itself issuing the mortgages.
This is a targeted initiative aimed solely at potential home buyers who may have a
concern that house prices may fall further and are consequently postponing their
The product will protect buyers from decreases of up to 20% in the value of their
property over the next five years.
Three banks – Bank of Ireland, AIB [through its subsidiary EBS] and permanent tsb bank
– are participating in the initiative. Buyers should approach these banks to obtain a
mortgage, which will be subject to typical lending criteria.
80% of the agreed sale price of the property is paid upfront. The remaining 20% will only
be due in five years’ time. How much, if any, of that 20% is then due will be calculated
on the basis of an independent assessment of the property’s value at that point (see
As normal, each of the three lenders will require buyers to part-fund their purchase with
a deposit of at least 10% of the value of the house.
A key benefit for buyers is that, for the first five years, their repayments can be
calculated based on a mortgage that includes the deferred payment element. If the price
of their house falls over the five years and they may not be liable for the deferred
payment element, they will have, in effect, been accelerating their mortgage repayment
and achieving considerable savings on the interest accruing on their mortgage.
This is a targeted, limited initiative supported by NAMA.
The initiative is not aimed at buyers who cannot get a mortgage or at investors.