It is now virtually impossible for people in their 20s to get a mortgage.
The average salary for graduates in their mid 20s is €28K. Under current mortgage lending caps (3.5 times salary), this means that a bank can only give a maximum of €98,000 in a mortgage to an average single young earner starting out. Even when you add the deposit, there are not many places for young people to buy at that level.
To make a mortgage even possible, young couples will now more than likely have to go in together in order to meet the salary cap. Before, the problem was making up a deposit. But the 3.5 times salary cap means that it is virtually impossible for single or young people to get a mortgage on their own.
Most (sensible) people would not want to make such a big financial commitment with another person unless they were married. The average age for men now marrying in Ireland is 35.
If the average 35 year old (now finally married and mortgage ready) takes out the standard 35 year mortgage with a partner, he will be 70 by the time the mortgage will be paid off.
Already this year, we heard how public servants can work until they are 70. I am beginning to understand why. If people are forced out of the labour market at 65/66, they will face severe financial trouble paying off the remaining few years of their mortgage.
We, as a society, are kicking mortgage repayments into our later years. I believe that the banks and government should do more to make it attractive again for young people to take out mortgages and be able to enjoy life more in their later years.