Common mortgages questions

What percentage can I borrow?

Central Bank rules apply limits to 
mortgage lending by regulated lenders in the Irish market.

They apply
to Loan to Value (LTV), and Loan to Income (LTI), on both PDHs
(Principal Dwelling Homes), and buy-to-let mortgages.

The limits are
in addition to lenders’ own credit policies, and a lender will also
consider affordability when assessing mortgage applications.

What are LTI (Loan to Income)
 Restrictions?

LTI restrictions mean that you can only
borrow up to a maximum of 3.5 times your annual gross income when
 applying for a mortgage for a PDH.

This limit also applies to you if
 you’re in negative equity, but does NOT apply to housing loans for
 buy-to-let properties.

What are LTV (Loan to Value)
 Restrictions?

For first-time buyers, the LTV limit is 
90%.

If you’re a first-time buyer, this means you’ll need a minimum 
10% deposit.

Due to the amount of time that sales can take,
valuations that you have carried out on houses will be valid for four
 months.

If you are a non first-time buyer, you
 are limited to 80% LTV, so you can borrow up to 80% of the value of 
the property, and you’ll need a 20% minimum deposit.

These LTV limits
don’t apply to borrowers in negative equity applying for a mortgage
for a new property.

For buy-to-let mortgages, the LTV limit
is 70%. This means you’ll need a minimum deposit of 30% for a
 property you intend to rent out.

For switcher mortgages, or housing 
loans for restructuring mortgages in arrears, or pre-arrears, these
 rules do not
 apply.

How
 much can I afford to borrow?

Use
 budget planning tools to work out a comfortable repayment each month.


Be aware that you will need to include amounts for ‘unforeseen
’ expenses in your budget.

How
 much can I afford to borrow?

Use
 budget planning tools to work out a comfortable repayment each month.

Be aware that you will need to include amounts for ‘unforeseen
’ expenses in your budget.

Commonly
 available mortgage calculators can indicate the cost of your monthly
mortgage repayment, but many lenders will also require that you have
 no other outstanding loans at the time of application.

The 
term of your mortgage affects the amount to be repaid.

The shorter
 the term, the higher the monthly repayments, and lower interest
payment overall.

The reverse is true for longer mortgage terms.

additional costs
  • Valuation 
fee, used to give your lender an estimate of a property’s market
 value. These must be done by a professional valuer. Valuation
 fee, used to give your lender an estimate of a property’s market
 value. 
  • Solicitors 
are required to look after the legal aspects of your mortgage. Each
 solicitor differs in how they structure their fees (flat rates,
percentages, etc), so check with the solicitor regarding their
 professional fees before you make your choice.
  • Stamp
 duty, which is currently charged at 1% of the value of the property
 up to €1,000,000 and 2% above that limit.
  • Fees 
must be paid to the surveyor or engineer who inspects the house
 prior to purchase.
  • And
 finally, many properties will not only require furnishing, but may
 not include white goods in the sale.