First Time Buyers
Rules for first time buyers
Before you start there are some specific rules that apply to first time buyers in Ireland that you should be aware of.
To get a foot on the property ladder you’ll need a minimum 10% deposit.
There is also a cap on what first time buyers can borrow based on:
These are called loan to income (LTI) and loan to value (LTV) limits – you can find out more about how these work by reading our guide to how much you can borrow there’s also a handy calculator to help you estimate the most you might be able to borrow.
First time buyers guide
Below is a basic guide for first time home buyers in Ireland. Before you can compare your mortgage options you will need to know the following:
Have you savied deposit?
The deposit is the amount of money you put towards purchasing your home.
When you’re buying your first home in Ireland you need a deposit of at least 10%.
For example, if you were buying a property worth €200,000 you would need a minimum deposit of €20,000.
However, the best mortgage rates tend to be available to borrowers who have a sizeable deposit, this is because they are less risky than borrowers with less money saved.
If you are looking a buying a new build home and you haven’t saved the entire deposit but you can evidence affordability with rental payments you could also avail of the Government’s Help-to-Buy Scheme where you could claim up to a maximum of 10% of the value of the property or €30,000 – whichever is lower. It is important to note though that the rebate is only available on properties valued at €500,000 or less.
See how much can you borrow?
(LTI) Loan to Income Limit – The Central Bank’s mortgage lending rules limit the maximum amount someone can borrow to 3.5 times their annual income, regardless of how much they earn.
(LTV) Loan-to-Value Ratio – The second major mortgage lending rule relates to the loan-to-value ratios which is based on the percentage of the property’s value that you can borrow and how much of it you must pay for upfront in the form of a deposit.
However, in any one calendar year, lenders can approve a small percentage of mortgages for first and second time buyers above this cap or below the deposit level. In these cases, often called ‘exemptions’, up to 4.5 times an applicant’s income or require a lower deposit amount.
Whether you get an exemption will depend on your credit history, the quality of your mortgage application and whether the lender still has room to give out an exemption.
Exemptions are often all used up by the middle of the calendar year, so if you want to apply for one, the earlier in the year that you apply for your mortgage the better.
Mortgage lenders also tend to give exemptions to people on higher incomes based on disposable income levels, which means around €50,000 or above for a single applicant and €75,000 and above for a joint application.
Choosing a Fixed or Variable Rate
Most mortgages offers either variable or fixed interest rates, and before you look for the best deal you need to decide which works best for you.
If you want help finding the right mortgage you could also choose to speak to a mortgage broker, they’ll be able to review your specific circumstances and recommend some suitable options.
Before you decide, make sure you speak to our mortgage specialists.
Help for first time buyers in Ireland
There are a couple of schemes that could help you buy your first property, these include:
If you are living in social housing and want to buy your first home you may also qualify for:
First Time Buyer application process
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