Mortgage price war set to encourage more homeowners to switch lenders

The mortgage price war among banks on interest rates is set to prompt more people to switch as they realise they are being overcharged.

More houses are out of negative equity, which will also encourage more people to move mortgage provider, according to brokers MyMortgages.ie.

The brokerage estimates that families could save between €40,000 and €100,000 over the life of the loan by moving to a better-value lender.

Joey Sheahan of MyMorgtages.ie said he expects a surge in mortgage switching in the next year as banks rump up the interest-rate price war, and more households will move into positive equity.

"With the still curtailed new house building, banks are struggling to hit their mortgage targets and so are turning to the switching market. This is creating an opportunity for many homeowners to make considerably savings," Mr Sheahan said.

He said many people assume that once they have taken out a mortgage with a lender for 20 or 30 years, then that’s the end of the decision-making process.

But mortgages are just like any other financial product – they should be reviewed every three years to ensure you are not paying over the odds, he said.

Mr Sheahan said he has no sympathy for some borrowers who complain that they are paying high rates.

"There are lots of homeowners needlessly paying more than 3.6pc in interest, but a large portion of these people can easily switch lender once they have 10pc equity in their property.

"There are less and less people in negative equity due to the unprecedented recovery in property values over the past few years."

Recent research commissioned by the Competition and Consumer Protection Commission, the State agency that promotes consumer interests, found that small numbers switch mortgages.

Just one in seven mortgage holders have thought about switching, or actively engaged with their lender in the last five years.

And despite the savings that can be made, only 2pc of mortgage holders actually switched provider in the last half decade.

Mr Sheahan said large numbers of people are struggling financially under the weight of these rates. “We deal with clients on a daily basis who are unaware that switching could even be an option for them – many believe they are simply ‘locked in’ to the contract with their current lender.

"And of those who have heard of switching, most just think it’s ‘too much hassle’."

He said consumers do not realise that most banks will give cashback which will more than cover this from €1,500 up to 2pc of the loan amount.

Savings of close to €300 a month can be made by moving from a mortgage provider charging 4.20pc for a mortgage to one with a rate of 2.75pc, on a €350,000 mortgage.

Research from the Central Bank in 2015 showed that one in five mortgage holders could make savings by switching their mortgage.

Compensation to be paid 'by Christmas' for tracker victims

BANKS at the centre of the tracker mortgage scandal will begin paying compensation to their victims by Christmas, the Government believes.

Representatives from Bank of Ireland, Permanent TSB and KBC Bank will meet with Finance Minister Paschal Donohoe today in what Government sources are building up as a “showdown”.

Over the course of the week, CEOs of eight other institutions that overcharged customers will be hauled in for meetings, including Ulster Bank tomorrow and AIB on Wednesday.

Sources told the Irish Independent the vast majority were expected to agree to a demand to begin compensating customers before the end of the year.

However, it is understood one bank is showing resistance to the Government’s intervention.

“There seems to be movement with all of them except one but we’ll see what the meetings bring. If they don’t co-operate, then we will insist on enforcement action immediately,” said a source familiar with the process.

The source pointed to the case of Springboard Mortgages which was last year fined €4.5m for overcharging customers for their tracker mortgages.

The lender agreed to pay the penalty, which had been imposed for breaches under the Central Bank’s consumer protection codes.

“The reality is enforcement isn’t about the fine. It’s about reputational damage for the bank,” a source said.

At least 20,000 customers are believed to have been wrongly denied a tracker mortgage in that they paid thousands of euro more in interest than they should have.

Fianna Fáil has estimated the ultimate cost of redress and compensation could amount to €500m.

Ahead of Mr Donohoe’s meeting, Junior Finance Minister Michael D’Arcy has offered the lending institutions “some friendly advice”, saying they need to fix the situation or they will be heavily affected by Government action.

He said “the well is empty” in terms of patience with the banks, and all options are on the table.

Mr Donohoe will brief the Cabinet on his discussions when ministers meet this evening. The meeting has been brought forward from tomorrow because Taoiseach Leo Varadkar is travelling to France to meet with President Emmanuel Macron.

Mr Varadkar said “less than half of people have been compensated”.

“That’s not good enough. We’d expect compensation to be under way at the very least by the end of the year.

“We’re very frustrated with the lack of progress to date. We’re certainly not ruling out further regulations, further sanctions or additional taxation of the banks.”

However, speaking at Fine Gael’s presidential dinner over the weekend, he refused to criticise Central Bank Governor Philip Lane for his performance at an Oireachtas committee last week.

Prof Lane said the Central Bank was asking banks to write to people they refuse to give trackers back to, and told victims they can either go to the courts or ombudsman. This is despite the fact the Central Bank has warned there will be “substantial” numbers in addition to the 20,000 tracker-denial cases already disclosed.

Asked whether Prof Lane’s statements failed to meet expectations, Mr Varadkar said he would “rather see the pressure and focus being put on the banks over the next week or so”.

But Environment Minister Denis Naughten last night told the Irish Independent that the Central Bank “must review its own handling of this entire issue from start to finish”.

He expects the banks’ CEOs to bring a “concrete timetable for the restoration, redress and compensation plans for customers”.

“These customers have been unfairly and unscrupulously targeted by financial institutions and, as a result, have exposed an underlying culture which clearly still exists within the financial services sector,” he said.

Donohoe admits pension hit to women is 'bonkers'

Finance Minister Paschal Donohoe has admitted it is "bonkers and unbelievable" that women are losing out on pension payments due to a recent change in the rules.

Thousands of women are getting smaller pensions because they left the workforce before 1994 to care for children.

Others are taking a pensions hit because they once had a summer job or worked part time for a while.

It is estimated that 23,000 females have been hit with lower payments due to changes to State pension eligibility rules in 2012.

Wrong

Changes made by then social protection minister Joan Burton in the previous government make it more difficult to qualify for a full pension.

Retired women are losing more than €1,500 a year on average, according to calculations by advocacy group Age Action.

The rule change also means that the women affected will not get the full €5 increase in the State pension announced in the Budget and due from the end of March.

Mr Donohoe admitted it was wrong that women were being affected in this way.

He was reacting to a caller to the 'Today with Sean O'Rourke' show, whose wife is losing money due to the change.

Eamon Tynan, a pensioner from Co Longford, said the situation was costing her €35 a week in her pension payments.

His wife had a summer job in the 1960s when she was a secondary school student before joining the civil service.

As a result, "her contributions are now averaged out and divided by 50", he said.

The problem was a "huge issue for women retiring around now in their 60s", Mr Tynan said.

The minister responded that it was "bonkers and unbelievable" that women who worked and obeyed the law by paying pension contributions were now getting lower pensions.

"I think it is wrong the way they were treated. It was wrong then and it is wrong now," he said.

Mr Donohoe said: "It just seems incredible that we live in a country that required women to leave their jobs and what we are living with now is the consequences of that.

"The advice I have available to me is that if we were to look to try to rectify this issue in one move in a single Budget, it would cost hundreds of millions of euro for me to do," he added.

"Over the next few years, we are going to try to move to a pension system, which takes into account the entirety of people's contributions. We're aiming to do that for around 2021." The Department of Social Protection said it estimated it would cost €60m next year to revert to the previous system. In 2012, the then government changed the eligibility criteria for the contributory State pension.

It moved to an "averaging rule" to calculate the number of contributions made by a worker.

Those entitled to a full pension were unaffected, but large numbers of those who would have been in line for smaller pensions lost out.

Suffering

Under the old system, if you had an average of 20 contributions a year, you would be entitled to full State pension.

But the changes introduced in 2012 meant someone with 20 contributions a year got €35 less a week in pension.

Justin Moran, of Age Action, said that the failure to respond to the plight of tens of thousands of pensioners suffering because of the 2012 cuts was one of the biggest disappointments in the Budget.

"These changes have punished pensioners who took time out of the workforce to raise children and to care for their loved ones. Many have lost more than a €1,000 a year because of this.

"It's also important to remember that not every pensioner is going to get the €5 announced on Tuesday."

National Women's Council director Orla O'Connor said she was disappointed the issue was not addressed in this week's Budget.

Charlie Weston: Ten things women need to know about pensions Females will have 38pc less than men to live on at retirement

Women get a raw deal on pensions. Fewer of them work outside the home, and they often get paid less when they do take up paid employment. Many work only part-time.

All this means that the gender pay gap feeds into the pension issue. So when they get to retire they typically have a third less to live on than men.

A pensions gap of 38pc exists, according to the Irish Human Rights and Equality Commission.

But there are ways women can make the best of a bad situation by ensuring they maximise the value from the State pension, and any supplementary scheme, whether they are in the workforce or not.

Here are 10 things women need to know about pensions.

1 The State Pension

The State contributory pension is regarded as relatively generous. For those who have 48 annual PRSI contributions, the weekly payment is €238.30. This is the payment for people who qualified for pensions before September 2012. You get it from the age of 66. The means-tested State pension non-contributory is a payment for people aged over 66 who do not qualify for a State contributory pension or who qualify for only a reduced contributory pension based on their insurance record.

2 But women often get less than men

Women are losing large amounts of money from their retirement payments due to austerity cuts. A recent report from Age Action estimated that 23,000 females have been hit with lower payments due to changes to State pension eligibility rules in 2012.

Changes made by the previous government make it more difficult to qualify for a full pension. On average, retired workers have lost more than €1,500 a year, with women suffering the biggest hit, according to Age Action.

In 2012, the then-government changed the eligibility criteria for the contributory State pension. It moved to an "averaging rule" to calculate the number of contributions made by a worker.

Those entitled to a full pension were unaffected, but large numbers of those who would have been in line for smaller pensions lost out.

"Under the old system, if you had an average of 20 contributions a year, you would be entitled to €228.70. But after 2012, this dropped to €198.60, a cut of more than €30 each week," Age Action's Justin Moran said.

3 Homemaker scheme worth checking out

The homemaker scheme makes it easier for women who have spent time outside the workforce caring for children to qualify for the contributory State pension. The scheme protects your contributions by disregarding any years spent providing full-time care for a child under 12, or a disabled person over the age of 12.

Up to 20 years can be disregarded when the yearly average number of contributions for a contributory pension is being calculated, which can help you qualify for State pension, or a higher rate of pension. Typically, you won't have to apply for it. If you are already claiming child benefit, carer's allowance or carer's benefit, or a respite care grant, you will automatically be entitled to it.

4 Low pension coverage among women

Just a third of women own a pension, according to research. This means that two-thirds of women do not have a supplementary pension. This is despite the fact that women make up almost half of the workforce. Men are much more likely to have a pension. Part of the problem is that women are far less likely to discuss retirement planning with friends.

5 Most women don't know how to start a pension

A worrying 71pc of women don't know how to start a pension, according to a survey commissioned by Standard Life. There are two options in the private sector. If you are a PAYE employee your company may have an existing occupational pension scheme. Typically, the employer makes a contribution to this on behalf of the employee.

Large companies often contribute between 5pc and 9pc of annual salary to the pension. If you are earning €50,000 a year this works out at between €2,500 and €5,000 a year. Alternatively, the employer has to offer you access to a pension scheme even if it doesn't contribute to it. That's the legal requirement and has been for the past 15 years. Most women are unaware of this extremely important point, according to Aileen Power of Standard Life.

6 the Pension age has gone up

The State pension is now 66, up from 65 previously.

For those retiring from 2021 on it goes to 67.

For those retiring from 2028 the State pension will not be paid until 68.

However, many employers are still sending employees into retirement at the age of 65.

That is why the Citizens' Assembly called recently for the abolition of the mandatory retirement age.

7 You may have to work until you are 70

People should not get the State pension until they reach the age of 70, a State-supported think tank has recommended. Moving the statutory retirement age to 70 would counteract a fall in the workforce and the rise in the number of pensioners, the Economic and Social Research Institute said recently.

The chances are that this will be introduced. Currently, there are around six workers for every pensioner. Over the next 30 years this is due to fall to around two workers for every pensioner, adding to the costs of State pensions.

8 Maternity leave should not affect pension rights

If you get maternity benefit, you will get State pensions credits automatically. But this ends after 26 weeks. This means that if you take further unpaid leave, you will need to get your employer to complete the application form for maternity leave credits when you get back to work.

If you are taking parental leave, you should also be entitled to credits. But you have to apply for these.

9 You may get a spouse's pension

If you are married but do not qualify for a pension, you may be entitled to what is called a "qualified adult" pension. This can be up to €213.50 for those over the age of 66. The payment is means-tested.

However, the concept of women being dependent on their husband in retirement is not appealing for women. If your husband has died and was a member of a defined-benefit pension scheme, you are likely to be entitled to a spouse's pension, usually half the amount he got in retirement.

10 Pensions adjustment order

A court may make a pension adjustment order in the case of judicial separation, divorce and dissolution proceedings. This designates part of the pension to be paid to a spouse and dependent children.

The judge decides how much of the pension should be designated, according to the Courts Service.

The effect of such an order is that the designated part of the pension remains in the pension scheme but is payable to a spouse and children when the other spouse reaches pension age or dies.

Over 10,000 contact new empty houses database with vacant property data across Ireland

Over 10,000 people have contacted a new national database aimed at recording and utilising Ireland's stock of vacant houses.

The VacantHomes.ie was launched last month, a digital resource that invites submissions from local communities providing information on the empty properties in their area.

The Mayo County Council initiative then uses the data garnered from these anonymous submissions so that local authorities can get in touch with the owners and determine if the property can be re-used quickly and converted into social housing.

Borne out of the council’s commitment to the Government's vacant housing strategy, the initiative has seen a surge of interest with 1,000 properties countrywide registered to date.

According to Census 2016, 183,312 homes are currently vacant in Ireland, not including 62,148 vacant holiday homes.

Fianna Fáil leader, Micheál Martin has said that there are now 5,187 adults, 1,400 families, and over 3,000 children homeless here.

Tom Gilligan Director of Services, Mayo Co Council has called for Irish citizens to log onto vacanthomes.ie and list any property they think could be utilised to help tackle the housing crisis.

"We want to ensure that vacanthomes.ie is an on-going initiative and a relevant resource for local authorities, aiding them in getting as many of the 183,312 unoccupied properties back in use by the people that need them most," he said.

Some 58pc of properties logged on the new database are located in Leinster,  where demand is highest while other vacant properties were recorded in Munster (23pc), Connaught (15pc) and Ulster (4pc).

The most recorded property type is detached at 34pc, with semi detached accounting for 29pc of the submissions on the database. 

Housing Minister Eoghan Murphy has repeatedly said that more radical measures need to be taken to stem the flow of people into homelessness and to stimulate the housing market.

Following a housing summit with the heads of the country's local authorities the Government announced a new suite of measures to tackle the housing crisis.

The minister announced that government will offer homeless families from Dublin the chance of a house in rural counties, in a radical bid to ease the current crisis.

Those wishing to move to other parts of the country will be assisted under the first part of this new housing strategy. 'The Place Finder Service' was previously discussed in the Programme for Government talks.

The Housing Minister said an extra 200 extra emergency beds will be delivered for homeless people by December.

He also pledged to build an extra 800 social homes next year bringing the total from 3,000 to 3,800.

A further €10m in funding for more Family Hubs is being ring-fenced, as demand arises from Local Authorities, to be drawn this year.

Minister Simon Harris plans to increase his department's annual social inclusion budget for homelessness to €36m in 2018.

Mortgage wars: Rival banks expected to reduce rates in response to AIB cuts

Mortgage lenders will now have to cut their rates in response to AIB reducing its variable, fixed and loan-to-value rates, experts said.

Stockbroking analysts said AIB has now put huge pressure on Bank of Ireland and Permanent TSB, in particular.

AIB's move to cut its variable rates by 0.25pc to 3.15pc from November will mean a huge gap emerges with the Bank of Ireland variable rate.

From next month, AIB's variable rate will be 1.35 percentage points lower than the Bank of Ireland one.

Bank of Ireland has a strategy to win mortgage business by offering up to 3pc of the value of mortgages in cash-back to new customers. It may now decide to weather it out, or only slightly tweak its fixed rate offering, analysts said.

But Permanent TSB is likely to be under pressure to respond to AIB's rate cut.

The move by AIB to cut fixed rates, and reduce its overall interest rate margins, also means there is now no expectation of a rise in European Central Bank rates until 2019 at the earliest, analysts said.

"AIB's move potentially puts more pressure on the other banks to respond," analysts at Goodbody Stockbrokers wrote in a note to investors.

Experts also say that AIB's move to cut its fixed rates from Monday by up to 0.5pc will help it protect its leading market position in a growing market.

Cuts are expected in the coming weeks from EBS and Haven, which are both AIB subsidiaries.

And the reductions are also likely to raise further additional competitive pressures across the market in due course, Goodbody said.

Investec's Philip O'Sullivan said that the European Central Bank and wholesale market rates of zero are set to continue next year.

It will be 2019 or 2020 before the "interest rate environment begins to normalise", according to Mr O'Sullivan.

Fianna Fáil finance spokesperson Michael McGrath said the AIB move shows that banks can afford to cut rates and still achieve more than healthy profits.

The onus now is on other banks to introduce further rate cuts if they don't want to lose market share, Mr McGrath said.

He also called on Bank of Ireland, Ulster Bank, Permanent TSB and KBC to introduce rate cuts.

Meanwhile, the AIB Group has been called upon to immediately cut the mortgage rates at its EBS and Haven subsidiaries.

There are indications the banking group may lower EBS rates in coming weeks, but the failure to announce EBS reductions along with the AIB cuts has annoyed mortgage campaigners.

Brendan Burgess of the Fair Mortgage Rates campaign welcomed the AIB reductions, but said a large gap had now opened up with EBS.

The EBS variable rate is 3.7pc compared with AIB's, which is due to fall to 3.15pc at the start of next month.

"EBS customers are furious that they are not benefiting from these rate cuts. EBS is funding its cash-back offers to new customers by charging existing customers more. The quicker the Dáil bans these cash-back offers the better," Mr Burgess said.

Red flags and hidden costs: Need-to-know tips for the first-time buyer applying for a mortgage

Are you trying to save in the hope of securing a mortgage - but confused about what lies ahead?

In the year to date, mortgage approvals for first-time buyers are up 43pc year-on-year, but this doesn't mean it's an easy process.

Independent.ie spoke to the experts about what first-time buyers should be looking for:

What is the main thing to note when you’re shopping for a mortgage?

Managing Director at Bluewater Financial Planning Steven Barrett said the first thing a first-time buyer should look at is the interest rate that lenders are offering.

"It is so hard to get a mortgage these days, there are no myths really, it is actually a very difficult process," Steven told Independent.ie.

"The interest rate is the big thing to look out for, how much you’re going to repay.

"First-time buyers tend to look for the longer term which is better so you can borrow more money to get started. If you’re looking for the longest term, you’re looking to keep down repayments.

"This is new for people to hear, they’re not taught these things about finance or mortgages in school or college."

Independent financial advisor with 52Financial Ross Connolly said he would advise speaking to a mortgage broker.

"Obviously I'm biased but the benefits of having a broker are; we do the shopping around for the client, we build a file which would be neutral and throughout the process we think of which bank we think would be most suitable for the client," he said.

What are the red flags banks look for when you’re applying for a mortgage?

"Overdrafts that are not organised or arranged with any bank are also a big no-no," Ross Connolly said.

"We stay away from overdrafts. You don't want to paint a picture of someone who is living from pay cheque to pay cheque. You don't want to be seen to be gambling or any excessive spending. We would cut that down. The accounts need to be clean."

He said that they advise customers to do an Irish Credit Bureau check on themselves online at www.icb.ie to make sure they haven't missed any old credit card bills or supermarket clubcards they didn't realise they had signed up for.

"The aim is to catch any missed payments at all," Ross added, "just so you have any questions answered before the bank has to ask them."

Steven Barrett of Bluewater Financial Planning said the first thing a bank will do is look at someone's credit rating.

“I’d always advise people to get a copy of their own records so they know what they have, it is the first thing a bank will do," he said.

"My advice to first-time buyers is to make sure the minimum credit card payments are paid off each month because that will affect your credit card rating and make it more difficult to get a loan.

“Missed payments on your direct debts are a big no-no as well. Banks do go through statements line by line. These days, people do spend a lot with their debit card, so your whole lifestyle is showing up on bank statements. If you miss payments, the bank will say, ‘well this person isn’t paying their bills and it is a red flag’.

“You can get declined for repeated missed payments,” Steven added.

What if I have savings or debt in other accounts, like a Credit Union account?

There is no problem having savings in a different account, you can bank and save whatever and wherever you want, mortgage specialist with Mortgage Negotiators Shane Connole advised.

"You can bank and save wherever you want, and you can walk in to get a mortgage wherever you want. Just because you bank with Bank of Ireland doesn't mean you can't shop for a mortgage with KBC," he said.

"The debt on the other hand, you can have your loans wherever you want but this may have a negative impact on your loan approval.

"The debt will absolutely contribute to your credit rating, but it can also have an effect on how much you're borrowing."

Is it true online gambling accounts are a 'no-no' when applying for a mortgage?

The short answer is yes. Steven Barrett of Bluewater Financial Planning describes online betting accounts as a “big no-no”.

“It’s a big no-no if you’re using Paddy Power and other gambling websites on a regular basis.

“When people gamble regularly, they tend to leave the money in the online account if they win and this only goes one way. If they can see that you’re a regular gambler, they will refuse a loan.”

If I’m renting, will the bank take it into consideration for a credit rating?

Banks will take your monthly spend on rent into account for your repayment capacity, Ross Connolly advised.

"When it comes to the savings aspect, the repayment capacity would be the correct label to put on it.

"A couple paying €1,000 a month in rent need to know that this €1,000 will go towards their repayment capacity for a €1,200 a month mortgage, it will be considered savings for want of a better word.

"If you can get a car loan cleared coming up to the application, this can also be considered as repayment capacity."

Can I get a financial gift from a relative?

Mortgage specialist with Mortgage Negotiators Shane Connole said the simple answer is "yes".

"There are no rules around it," he said, "but there are areas to watch out for. No bank likes approving mortgages where your own contribution is a 100pc gift. They would expect for a 10pc deposit, that 5pc of the money is your own savings and the other 5pc could be your gift. An example, you're buying a house for €200,000 and need a €20,000 deposit. You will need to show that €10,000 of that is from your own funds."

The second aspect of receiving a gift is to watch out for tax, Shane Connole advised.

"It's better to receive the gift from a relative in a direct bloodline, based on the tax position. If you're getting a gift from an aunt or cousin, the bank will want to know how you will pay the tax and revenue on it.

"Finally, the bank will want to see the gift money in your own account at a certain stage of the process."

Are there any myths or misconceptions you've come across?

"I wouldn't come across a lot of misunderstandings," 52Financial's Ross Connolly said, "but some people don't understand the reason behind the saving.

"The main reason to save is so you can prove you have the repayment capacity when it comes to your mortgage.

"If your mortgage repayment is €1,000 a month, they may look for €1,200 in repayment capacity in case there is an increase in interest rates.

"People nowadays do seem to be more educated about applying for amortgage.

"It is rare that I come across an online betting shop in a bank statement. There is a high level of advice out there," he added.

If I'm buying a doer-upper, can I get any special treatment?

There are a few things to note if you're investing in a doer-upper, mortgage specialist Shane Connole said.

"The key areas are; do you need planning permission, you need invoices for the work you're doing to the property, and you need to ensure the loan you're applying for does not exceed 90pc of the total end value of the property.

"If you buy a house for €200,000 and do €50,000 worth of work, this does not mean the end value of the house if €250,000.

"The rule is it's 60pc of the value of works. So if I buy for €200,000 and I do €50,000 worth of work, the end value of the house would be €230,000.

"A lot of people fall flat on that. Banks cannot lend more than 90pc of the value per completion.

"You will also need invoices and typically you need a registered builder's invoice."

Shane added that there is not a 'scheme' asuch in place for those buying doer-uppers, but you can receive the money in stages.

"You get the first part of the loan paid down when buying the house, and then your value of works is split into two payments. You receive one payment when half the work is done on showing an invoice, and you receive the second payment when the works are completed."

So, you’ve saved for your deposit – are there any hidden costs?

As well as your deposit, financial experts advise that you have the money aside to pay for the extra costs which include stamp duty, solicitors’ fees and surveying fees.

“First-time buyers will have to have a 10pc deposit saved, but you will also need to show that you can pay for the associated costs,” Steven Barrett said.

“You could be paying up to €2,000 for a solicitor, and when it comes to conveyancing, it does need to be done properly by a qualified solicitor. Cheapest is not always best.

“You are talking another few hundred euro for a surveyor, and you have to be able to show the bank that you have that in addition to your deposit.”

Any expert tips for the first-time buyer?

Bluewater’s Steven Barrett believes a separate savings account is key to securing a mortgage.

“Having regular savings each month is a big plus, having an account where regular money goes in and you don’t touch it,” Steven said.

“If you’re putting in a thousand euro on a regular basis but then taking money out of it, they’ll just say, ‘well, this person isn’t really saving’, even if it’s just every quarter, they’ll discount it or they’ll average it out.”

He continued; “Regular saving is the key. If mortgage rates go up by 2pc you need to show you can afford the higher repayments. If you’re paying rent, you need to show that you’re also regular saving in an account you don’t touch.

“You need to have control over your finances and try not to have any debt.”