Getting a Mortgage in Ireland – How Much Can You Borrow ?

The first questions most people usually ask about getting a mortgage in Ireland are ...

  1. How Much Can I Borrow ?
  2. How much of a deposit do I need ?
  3. How much will the monthly payments be?

Mortgage lending criteria in 2020 are less strict for first-time buyers than they were in back in 2016.
This – combined with the  Help to Buy scheme might make it easier for more first time buyers get on the housing ladder. (Sadly – it looks like it might have just helped to bring about higher house prices.)

Lenders are governed by Central Bank Rules – see here so in general, the most  that first time buyers can borrow is   90% of the House value. This is known as Loan to Value or “LTV” .

There are some exemptions allowed – but only 21 mortgage exemptions on loan to value (LTV) were given to first-time buyers in 2018 . ( This is the rule requiring a 10pc deposit.)

There is also a restriction on mortgages being no more than 3.5 times annual gross income. (This is known as the income multiple)

  Mortgages – How Much can I Borrow ?

Below are typical figures for mortgage amounts allowed for a single earner who is a first-time buyer. (Calculations based on 3.5 times earnings)

Annual Gross
Maximum House
Price possible with
a 10%  Deposit
10% Deposit
€32000 112,000 124,400 12,440
€35000 122,500 136,111 13,611
€38000 133,000 147,780 14,780
€40000 140,000 155,556 15,555
€45000 157,500 175,000 17,500
€50000 175,000 194,444 19,444
€55000 192,000 213,330 21,330
€65000 227,500 252,780 25,278
€75000 263,500 292,780 29,278
€85000 297,500 330,560 33,056
€100000 350,000 388,880 38,885
€110000 385,000 427.775 42,775
€120000 420,000 466,600 46,600

Note: The figures will be exactly the same for joint applications. (Just add the two incomes).

See here for some sample mortgage payment calculations to give you an idea of how much your monthly repayments might be.

Exemptions from Mortgage Income Rules

The banks are allowed to make exemptions in some cases and can lend more than 3.5 times income to up to 20% of first-time buyers.

The exemptions tend to be used up quickly – and it is possible that applications in the first 3 months of the year will have more chance of going over the earnings multiple of 3.5.

In 2018 a total of 2,465 first-time buyers were allowed to breach the 3.5 times salary requirement.

Other Requirements

In general terms – to be accepted for a mortgage offer,  you will need to be permanently employed in  “sustainable employment”. Banks will only lend if they believe your employer will be around in 12 months’ time or more.

If you are self-employed – you will need to have been trading for a minimum of two years.

If you are in contract employment or temporary employment other than in the medical profession, it might be more difficult to secure a mortgage.

You will also need to have evidence of savings built up over at least a 12-month period to show your ability to make the repayments.  A big gift from a parent may not be enough.
If you are renting, banks will usually consider proof of paying rent as similar to saving.

If you have been refused a mortgage by 2 banks – you can then apply for an Affordable Mortgage from your local authority – with rates as low as 2% fixed for 25 years.

Read more here about the Affordable Mortgage Scheme  (Officially known as the Rebuilding Ireland Home Loan Scheme)

See our listings of the Lowest Mortgage Rates

You might also be interested in the legal costs when buying a house in Ireland

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