We’re in the market for a mortgage. We’ve made the decision that renting is no longer what we want to do. The decision is slightly being sped up by news that our apartment complex is being sold, although we have no idea when or how far away that is. It’s a decision I’m happy with – apartment life with a three year old who owns half of Smyths is not ideal. However, neither is the Cork housing market (or the rental market for that matter – it is BANANAS out there at the moment). We’ve become a lot more aware of the campaigns different banks are offering when it comes to mortgages.
Having grown up hearing that blasted Tracker Mortgage ad (and still not knowing what it was), to me it would have seemed that advertising for something as big as a mortgage would be informational, common sense and yes, appealing to the masses. We are no longer in the Ireland of 110% mortgages, but the austere days of the crash where nobody was lending has also gone by the wayside. We’re lucky enough to be able to have a deposit, and permanent employment which will allow for mortgage repayments. I am acutely aware that as a mid twenties couple we are likely the exception in this situation, and understand that it’s a very privileged situation to be in. Our generation, the millennial generation, have been blamed for their fate as unlikely to be homeowners due to our love of avocado toast. However, when you look at the circumstances in which we have entered adulthood and the workforce, the situations are very different from previous generations who are calling us “entitled”.
My first proper burned-to-memory experience of the financial crash was the Northern Rock bank run of September 2007. I was a sixteen year old fifth year Economics student, and the only comparison our teacher could make for us was a scene from Mary Poppins (yes, the Disney film, where the children cause a bank run). Ireland’s own financial crisis was to hit just twelve months later. Our economy was precariously balanced on loan books which were overextended, and while the hit to prevent complete economic collapse was taken by the government, it was more than we ever thought it could have been. Ten years have gone by since we sat in that classroom, being told this was a blip, that surely our economy would be grand. Rehashing the economic events of our country in this post is unnecessary. In short: banks stopped lending, the government started taxing more, jobs vanished, emigration soared. We are now on the upswing of that cycle (and it is a cycle), but it’s unclear whether the mistakes of the last decade have been learned at all.
My generation is filled with those who have managed to get through third level education (and even postgraduate qualifications) to find that they still cannot find work in their own country. The previous “free fees” policies of governments of old have vanished and been replaced by a €3000 registration fee. Zero hour contracts are not only legal but rampant, internships and living on buttons have become a “rite of passage”. We are continually told that we are unlikely to become home owners, but yet hand out significant chunks of our income on rent each month, more than proving our ability to pay a mortgage.
So, what does any of that have to do with Bank Of Ireland and their mortgage ad?
The now deleted tweet received a lot of backlash in the less than 24 hours it was up as an advertisement on Twitter. The text itself is fairly self explanatory, as you’d expect in a format where you can only use 140 characters. Orla and her nameless boyfriend have decided to get out of the rat race of renting to save up a deposit for their mortgage. Great, good for them. Another rental house free for the masses to fight over. This is a reality of many young people – leaving behind the independence they’ve had for sometimes the last decade to go back to their childhood bedrooms to save for a mortgage. Yes, this is reality. But is it really something we should be advertising as the best thing to do?
As someone who that isn’t an option for , it’s easy to shrug it off and go “Well, it’s all well and good for those who can”. When you’ve got a three year old and work on the other side of the country from your family, it doesn’t exactly become a viable saving option. The work issue is a definite problem as far as that’s concerned. Regardless of how much living with Mammy might be considered the best option, when it involves a two hour commute each way every day (not including traffic) it just won’t work. It certainly does work for some people – I have many friends doing the same, knowing just how lucky they are to be in the situation where that works.
But why are Bank Of Ireland happy to present this as a “This should be what you are doing”? Surely, when they are wanting to lend, advertising they are lending and working with new home buyers, infantilising them isn’t going to help. Current lending requirements (set by the Central Bank, not by any bank in particular), state that first time home buyers must have a deposit if 10% of the purchase price of the property. If it’s a second home, or a buy to rent, that goes up to 20%. So far, so generally well known. The bit we didn’t realise before entering this whole process was the more important multiplier – regardless of how much of our deposit we had, we could only borrow up to 3.5 times our combined income. Again, as a couple both earning in full time jobs, we are in a situation better than that of many, but even so, it does hold back a great amount of people.
We are watching the house prices rise and rise and rise. Let me be clear: the prices we are able to watch rising are the asking prices. What these houses actually sell for is something quite dramatically different in many cases, which is terrifying. A year ago when we started pondering buying a house, our “ideal budget” was roughly 100k less than what it is right now. And even now, we are staring at our budget, the amount banks are telling us we are likely to be approved for (but it’s not for certain), and seeing the amount of properties available to us get lower and lower.
The point Bank Of Ireland are also missing (as well as the distance that can be between family and workplace), is that while the ability to pay rent isn’t taken into account when it comes to saving for the deposit, most banks do take ability to pay rent consistently into account when they are assessing if they’ll give you money. So moving home with Mammy and Daddy is often a mistake as far as that’s concerned. I personally know two couples who made this move, and then upon saving the deposit, getting everything in order, were told “Oh no, you have to prove that for 6 months you can actually pay out a certain amount per month”. Since getting a 6 month lease in Ireland (in Cork in particular) is like spinning gold out of grass, it means that those couples are thrown back into the rental market, paying a small fortune for at least a year, and allowing the property prices to rocket up further. It’s absolute insanity.
The other mortgage ad which got me grinding my teeth of late is the AIB “Last Day of My Mortgage” one. Of course, it’s coming from the other end of the spectrum. People with the debt behind them. Mick and Kate are lovely people, I’m sure, but the sense of smug facing us from billboards, ATM machines and every single time the television got turned on was stomach churning. Thrilled for them that they’re no longer contributing to the large pockets of AIB, I am, but there was also the feeling of “Oh right. Our entire lives will have gone by. And the mortgage is still not finished until tomorrow”. Yes, we know this is the reality. In an Ireland where getting a mortgage under 30 is becoming the minority, we’re aware that being in our mid fifties AT LEAST is likely to be when the house gets paid off. And yes, mid-fifties isn’t that old (saying that extra loud so my Mammy can hear me say it). But it does hammer home just how long you’re going to be chained to a financial institution who can potentially take your home from under you. And there we go, the existential fear.
I understand that the basis of advertising is to sell a positive image of whatever product you’re selling. But I think educating instead of talking down to the people you’re trying to sell to is probably a better option. The firestorm which has come from this Bank of Ireland ad in the last 24 hours is understandable – it’s not the ad itself, it’s a culmination of the feeling there from repeatedly being talked down to by the institutions. We are being blamed and talked down to about a situation which we didn’t cause – these institutions are. I don’t feel the anger as much as others, but just surprise that this would seem to be a good idea to pass an advertising board.
Major kudos to Orla and her nameless boyfriend, they’ve managed to save the deposit. But Bank Of Ireland, you’re really not talking to your target market in a way that is respectful or realistic, and hopefully this is a lesson you’ll have learned for future advertising. Talk to us honestly and informatively with information we can ACTUALLY put into place.
(And if anyone could talk to me about a tracker mortgage, that’d be nice too. Just saying.)
BadMammy is on Facebook.