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Mortgages in Ireland

Written By:
Myles Robinson - Expert Finance Advisor

Posted: Feb 8, 2023

Mortgages in Ireland

Famous for its coastline towns and villages, lush landscapes, and traditional Irish pubs, Ireland is a beautiful place to live. Also known as the Emerald Isle, the country boasts vast greenery, complemented by national parks and farms, hence why many UK residents are flocking to this beautiful region to put down roots.

So, how do you get mortgage loans in Ireland? In this article, we’ll be investigating how a non-resident can get a mortgage in Ireland, how mortgages work in Ireland, and Ireland’s stress test for borrowers, among other topics.

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The situation in Ireland

It’s a bit of a tricky situation in Ireland. Many banks won’t lend to borrowers who don’t earn Euros. And while finding a UK lender is possible, you won’t have a lot of options. Along with this, the Irish Central Bank has many strict rules on borrowing to ensure lender and borrower sensibility.

Non-resident mortgages in Ireland

In Ireland, foreign investors are welcomed. Although, as a non-resident, you won’t get as good a mortgage deal as a resident might. Your LTV will likely be around 65%, but it might even be 60%. Remember that there has been a high volume of mortgage requests in Ireland, so it is competitive.

If you delay your move to Ireland, you may get a better deal from your lender. And as we’ve already mentioned, if you can’t pay in Euros, you may go through a stricter stress test (we’ll explain this in detail later), meaning that they’ll also account for potential currency fluctuations.

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Types of mortgages in Ireland

Choosing the type of mortgage you will commit yourself to is an important decision. You might spend over two decades paying off this same loan, so we recommend that you carefully consider your options.

You can also call our expert team at Loan Corp, and we can advise you on what mortgage is right for you based on the information you provide. You can contact us at 0808 301 9509 or fill out this form for a quote and a talk with one of our mortgage professionals.

Fixed-rate mortgage

Fixed-rate mortgages ensure you’ll spend the same monthly repayments for a specific period. This could be anywhere from two to ten years (and then renewed as needed). Because of the stability granted by this kind of mortgage, you may have to pay slightly higher rates if the variable rates are currently relatively low.

However, it’s a great way to make sure that you always have money to make your mortgage payments.

Variable-rate mortgages

How much you pay month-to-month depends on the Central Bank of Ireland’s rate (also known as the prime rate). However, depending on the lender, it may not align precisely with the rate. They may use their own standard variable rate. This is a better option if you’re willing to take a chance that the interest rates will remain low.

However, it’s not a great choice if your interest rates fluctuate or you need a secure and set amount to pay each month.

Tracker mortgages

Getting a tracker mortgage for your property in Ireland might be an excellent choice. It works a lot like a variable-rate mortgage, except it “tracks” the changes in the Central Bank very closely and sticks to the rates there. Your lender may not change the rate based on their own preferences.

Interest-only mortgage

This is the perfect choice for investors with large portions of their wealth stored away in investments that they’re waiting to mature. Interest-only mortgages require you to pay just the interest up until the end of the mortgage term, after which you’re expected to pay the mortgage in full.

An interest-only mortgage might be risky if, for instance, you rely on your investments, and they fail. This could put your home at risk of repossession.

How mortgages work in Ireland

In Ireland, borrowers can lend up to 3.5 times their gross income, which is, unfortunately, quite limiting. Mortgage lenders may make exceptions to this, to varying degrees:

  • First-time buyers: a maximum of 20% on the mortgage value.
  • Second (or more) time buyers: a maximum of 10% of the mortgage value.
  • Buy-to-let buyers: a maximum of 10% of the mortgage value.

Borrowers are required to have life insurance to protect the mortgage. This is unless the property will not be your primary residence, or you can show that you’ve been declined for life insurance or that it’s costly for you.

Mortgage approval application process

The first step you should take is to determine how much you’re able to borrow. This could be through a mortgage calculator (such as our mortgage calculator to assess the affordability of your mortgage repayments), but you’d also benefit from speaking to one of our mortgage professionals.

Next, you should ensure that you have enough money to make a mortgage deposit. Remember that you may not get a 90% LTV, so factor that in. Additionally, you may have to pay insurance, legal costs and stamp duty.

Finally, you should begin your mortgage application and compile all the required documents, which could include the following:

  • A copy of your identity document.
  • Your credit rating.
  • Bank statements, income statements, or equivalent.
  • Details about whether you will be borrowing jointly or on your own.
  • Whether you have a guarantor or not.
  • And any other documents as required by the lender.

After this, we at Loan Corp will take you through precisely what else you need as you work with one of our many mortgage lenders. Our mortgage loan professionals are experienced and able to help you get the best mortgage.

Ireland’s mortgage stress test

Most Irish mortgage lenders will require borrowers to pass a stress test. This assesses whether you’re someone financially responsible and capable of handling a mortgage. It works by considering your income streams, debts, and spending habits.

You’ll generally have to provide 12 months of bank statements to fully assess your eligibility.

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The Help to Buy mortgage scheme

As a first-time buyer or someone buying a new build, you may qualify for the Help to Buy scheme. This scheme can help you get a refund on your income tax paid in Ireland over the past years. You can then use this money towards your mortgage deposit.

You might also get the option to pay a reduced deposit.


Getting a mortgage if you have bad credit

Getting a mortgage in Ireland is possible even if you have bad credit. However, your options may be limited, and you’ll have to pay a larger deposit and, quite possibly, higher interest rates.

Even if you’ve been declared bankrupt but were later discharged, you’ll be able to find a lender, although your choices will be limited.


Buying a holiday home in Ireland

As a non-resident, you’ll be able to purchase a holiday home in Ireland. It shouldn’t be an issue if you are willing to make a reasonable deposit and pass the affordability checks.

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Is it hard to get a mortgage in Ireland?

How difficult it is for you to get a mortgage in Ireland depends on many variables. For example, if your credit history is poor, you’re a first-time buyer, you’re a non-resident, or you earn an unsteady income, finding a lender becomes much more difficult. A guarantor can make this easier for you, though.

What are the average mortgage rates in Ireland?

The average mortgage rate in Ireland is around 2.5-3.5%, but it does fluctuate. This is a much higher interest rate when compared with other countries, which average around 1.69%.

What do banks look at when applying for a mortgage in Ireland?

Banks look at many things when considering whether you’re eligible for a mortgage in Ireland. They’ll consider your income history, your credit history, if you have any pre-existing debts, your age, and whether this will be the first property that you’re buying or not.

How much of a deposit do I need for a mortgage in Ireland?

Typically you’ll have to deposit 20% of the home’s purchase price as a first-time buyer. However, this rate can be higher depending on numerous variables, like your credit rating. Buy-to-let properties also have higher requirements, where you’ll need to deposit at least 30% before beginning your mortgage term.

What is the age limit for a mortgage in Ireland?

In Ireland, your mortgage term must not exceed the age of 70. This means that if you’re 45 years old and looking for a mortgage, you’d not be able to request mortgage terms higher than 25 years.


Contact us for further information

At Loan Corp, we’d love to help you get the perfect mortgage deal in Ireland. Our mortgage experts are available for a call at 0808 301 9509. Alternatively, you can also leave us a message, and we’ll get back to you within 2 hours on working days and 4 hours during the weekend or bank holidays.

Contact us now to get started on your Irish mortgage application

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