HOMEOWNERS will pay an extra €50,000 by extending the term of their mortgage by 10 years.

Also as banks clamour to claw back control over interest rates, mortgage holders have been told to shop around now more than ever for the best deal.

This is according to the director of the Irish Mortgage Corporation, Frank Conway who said the cost of variable rate mortgages today versus where they were 12 months ago is far greater, despite much stability having returned to interest rates.

The cheapest Standard Variable Rate (SVR) is from AIB (2.25%) and the most expensive is from Bank of Scotland (5.9%).

"Banks have taken back control with the introduction of SVRs, which they can adjust as needed. Also the wide gap between the least and most expensive lenders is unmatched in recent years.

"Now, more than ever, consumers must come to evaluate the market and the cost of borrowing from various lenders," said Mr Conway.

Mr Conway also said that on a €250,000, 3% mortgage a homeowner will pay €1,054.01 a month on a 30-year term and €894.96 on a 40-year term.

However the 40-year mortgage will cost €50,000 more over the full term of the loan.

"It is important consumers understand the long-term cost of credit and do not use the option simply based on the attractive reduced monthly repayments," he said.

A paper released by David Duffy of the ESRI reported that Irish mortgage borrowers in negative equity may more than triple in the two years through 2010. Mr Duffy estimated that 196,000 borrowers may have debt higher than their house price at the end of 2010, compared with 116,000 by the end of this year and 57,000 at the end of 2008.

Meanwhile Irish housing registrations fell 67% to 212 in September from a year earlier, according to Homebond, which registers new developments, 71 were in Cork, 21 in Dublin, five in Limerick and two in Kerry.

THE IRISH EXAMINER, Niamh Hennessy