The amount of the deposit required largely depends on what type of buyer you are, and what type of property you are buying.
First Time Buyers (FTBs)
FTBs require a deposit of 10% of the purchase price (note: banks are allowed to have up to 5% of annual mortgage lending to FTBs above 90% loan to value (LTV), but in practice no lender currently offers mortgages above 90% of the purchase price). However, don’t forget that you will also need to budget 1% for stamp duty, and around €2,500 for legal fees. For example, if you are buying a property for €300,000, then you will need to have a total of €35,500 available to cover the deposit and associated costs.
If you are unsure whether you are classified as a first time buyer, or if you are planning a joint application where one borrower is a first time buyer, please refer to our related article, Am I a First Time Buyer?
Second and Subsequent Buyers (SSBs)
SSBs require a deposit of 20% of the purchase price (plus stamp duty and legal fees). However, banks are allowed to lend up to 90% of the purchase price to SSBs, with each lender subject to a quota of 20% of annual mortgage lending above 80% LTV. Such exceptions are subject to availability and to each lender’s own criteria.
It is possible for non-resident Irish borrowers to get a mortgage for a holiday home, investment property, or a family home which they intend to move home to in the following couple of years. That said, the options are extremely limited. Generally, the maximum LTV is 65%, i.e. a deposit of at least 35% is required. Beyond that, the lending criteria are very strict. One such example is that applicants earning in a non-euro currency will have their discounted by 20% to allow for possible adverse currency fluctuations. Contact us for more details, and we can quickly advise whether you may be eligible for a non-resident mortgage.
Investment or buy-to-let mortgages require a larger deposit. Investors must contribute a deposit of 30% of the purchase price. Again, lenders are allowed to make some exceptions, whereby a maximum of 10% of buy-to-let mortgages can be above 70% LTV. However, in practice, the banks currently limit the maximum loan to 70% LTV.
MMPI is an award-winning Irish broker offering you expert mortgage advice. Our experienced and qualified team will advise you on the best options suited to your specific circumstances.