The first questions most people usually ask about getting a mortgage in Ireland are ...
- How Much Can You Borrow ?
- How much of a deposit do you need to buy a house ?
- How much will the monthly payments be on a mortgage ?
Mortgage lending criteria in 2022 are less strict for first-time buyers than they were back in 2016.
This , combined with the Help to Buy scheme, might make it easier for more first time buyers to get on the housing ladder.
Further changes in 2023 will mean that buyers will
Mortgage lenders in Ireland are governed by Central Bank Rules – see here.
In general, the maximum that first-time buyers can borrow is 90% of the House value. This is known as Loan to Value or “LTV” . There are some exceptions 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).
This earnings multiple is to be increased to 4 times annual income for first time buyers in January 2023. (Non first time buyers will still be limited to 3.5 times earnings after Jan 2023)
How Much Can You Borrow?
Below are typical figures for mortgage amounts allowed by lenders in 2022 for a single earner who is a first-time buyer. (Calculations based on 3.5 times earnings)
| Annual Gross Income | Maximum Mortgage | Maximum House Price possible with a 10% Deposit | 10% Deposit Required |
|---|---|---|---|
| €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 |
Figures For January 2023 (based on 4 times earnings). Figures will apply to all home buyers (not just first time buyers) .
| Annual Gross Income | Maximum Mortgage | Maximum House Price possible with a 10% Deposit | 10% Deposit Required |
|---|---|---|---|
| €32000 | 128,000 | 142,222 | 14,222 |
| €35000 | 140,000 | 155,555 | 15,555 |
| €38000 | 152,000 | 168,888 | 16,888 |
| €40000 | 160,000 | 177,777 | 17,777 |
| €45000 | 180,000 | 200,000 | 20,000 |
| €50000 | 200,000 | 222,222 | 22,222 |
| €55000 | 220,000 | 244,444 | 24,444 |
| €65000 | 260,000 | 288,888 | 28,888 |
| €75000 | 300,000 | 333,333 | 33,333 |
| €85000 | 340,000 | 377,777 | 37,777 |
| €100000 | 400,000 | 444,444 | 44,444 |
| €110000 | 440,000 | 488,888 | 48,888 |
| €120000 | 480,000 | 533,333 | 53,333 |
Note: The figures will be exactly the same for joint applications. (Just add the two incomes).
Changes to the Definition of First Time Buyer.
From January 2023 anyone who is formally separated or divorced will be considered a first-time buyer if they no longer have a financial interest in their former home. The same applies for people who have gone through bankruptcy or insolvency in which they have lost their home.
If you want to check out some more detailed figures based on your personal circumstances you should check out this handy calculator.
See here for some sample mortgage payment calculations to give you an idea of how much your monthly repayments might be.
Exceptions to the Mortgage Income Rules
The banks are allowed to make exceptions in some cases and can lend more than the maximum income multiple up to 20% of first-time buyers.
However this is being reduced to 15% from January 2023
These 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 /
Banks can apply exceptions over Loan-to-Income (LTI) caps on up to 20pc of their mortgage business for first-time buyers and 10pc of second and subsequent buyer applications.
From Jan 2023 – lenders will have allowances to permit 15% of their lending above these limits for FTB and second and subsequent buyers .(SSB)
In 2018 a total of 2,465 first-time buyers were allowed to breach the salary requirement.
Free Mortgage Advice
Sometimes a good mortgage broker can assist you in getting a bigger mortgage or a lower interest rate.
The mortgage specialists at Money Sherpa can talk to you about your options. You can book a free callback from their mortgage team to help you find the best deal and make the paperwork painless. There is NO obligation to use them and they don’t charge fees.
By using a broker, you will have access to some of the lowest mortgage rates that are only available through brokers. (For example, mortgages from Avant, Haven and Finance Ireland can only be obtained through a broker.)
Other Mortgage 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 apply for an Affordable Mortgage from your local authority – with rates as low as 2.745 % 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