First Time Buyers Ultimate Guide Ireland 2022

First Time Buyers Ireland
First Time Buyers Ireland

With house building ramping up and new homes starting to come on stream, many are starting to dream of owning their first home once again.

By using a combination of the grants available to you, equity release from the family home and the right mortgage lender, that new home might be closer than you think.

Times are still tough for First Time Buyers due to rising prices and some of the tightest lending rules in Europe.

Don’t despair though, with the right approach First Time Buyers may still be able to get a foot on the property ladder.

By using the Help to Buy grant, plus a gift from your parents funded through equity release you can increase the size of your deposit and steal a march on other would be buyers.

In our First Time Buyer Ultimate Guide Ireland 2022, we’ll give you the full run down on everything you need to know if you are a first time buyer, plus some insider tips to help you get your dream home.

1. Who qualifies as a First Time Buyer? First Time Buyers Ireland 2022

To qualify as a First Time Buyer you can’t have had a mortgage before.

If you have ever taken out a mortgage under your name either in Ireland or overseas, you are no longer considered a First Time Buyer.

The good news though is you still count as a First Time Buyer if you previously inherited a house or bought outright. It’s only taking out a mortgage previously that disqualifies you from being a First Time Buyer.

Importantly if there are two people going on the mortgage, both must never had a mortgage before to qualify as a First Time Buyer.

2. How much can I borrow? First Time Buyers Ireland 2022?

The amount you can borrow is set by two things. First the Central Bank lending limits and secondly your mortgage lender’s credit policy.

Central Bank Lending Limits

The Irish Central Bank’s lending limits are some of the tightest in the world, so these are usually the biggest hurdle that needs to be overcome. [1]

The absolute maximum you can borrow under Central bank limits is 4.5 times your annual gross household income, however lenders are only allowed to go this high on 20% of mortgages. These are known as exceptions, 80% of mortgages must be under 3.5 times annual gross household income.

Typically lenders want any loans over 3.5 to go to what they see as the lowest risk customers. So these ‘exceptions’ go to people later in life who are the very highest earners and have lower living expenses than most First Time Buyers.

For the vast majority of First Time Buyers then, the maximum you can lend will be 3.5 times your annual gross household income. So this is how it usually works.

  • Kate earns €34,000 gross per annum, €24,000 basic and €10,000 last year in bonuses
  • Liam earns €30,000 gross per annum, €20,000 basic and €10,000 in commission last year

So their joint gross annual income is €64,000 per annum.

The Central Bank limit of 3.5 will allow them to borrow up to a maximum of €224,000.

Lender Credit Policy

On top of the Central Bank limits lenders apply a second set of rules to assess if you will be able to repay the mortgage.

These differ significantly from lender to lenders. By way of example some lenders discount bonus and commission payments completely and others bump up salary contributions if you are in certain professions with job security.

More generally the lender looks at your earning and spending history in the last 6 months to work out how much income will you have left over after you have covered your commitments.

The more money they think you will have left over the more they are likely to lend you.

This makes picking the lender who maximises your earnings and maximising how much you put by in the 6 months before applying for a mortgage really important.

It can even help you get hold of one of those precious mortgage exceptions.

Look for a mortgage broker who has access to all the lenders in the market as some lenders are only available via a broker.

3. What Deposit do I need for a First Time Buyer mortgage? Ireland 2022

The minimum amount of deposit you need to buy is also set by the Central Bank of Ireland.

The good news is that as a First Time Buyer you only need to put down 10% of the properties purchase price upfront. Second time buyers have to stump up a whopping 20% for the deposit.

That said it still makes sense to maximise your deposit if you can.

Ramping up the deposit reduces the mortgage size, which can knock thousands off the interest you will pay or may even help you afford a property that the Central Bank rules may have put out of reach.

With spiralling rents eating into your savings, how can you maximise your deposit?

4. What are the latest help schemes for First Time Buyers? First Time Buyers Ireland 2022

The Help to Buy scheme allows first time buyers to claim 10% of their property value to help them pay a deposit on newly built homes.

It’s a Government tax refund scheme and in order to claim, you must have paid the equivalent amount of 10% of your property value in tax in the previous 4 years before moving into your new home. 

In order to claim from this scheme, your home must be valued at €500,000 or less. 

The most you can claim is €30,000, so if your home is valued at more than €300,000, you still can only receive €30,000 max.

You may be able to bump up your deposit further with a gift from friends or relatives. The usual route for first time buyers is through their parents, commonly known as the ‘bank of mum and dad’.

It’s unlikely that your parents have fifty grand lying about the house, but they may have equity tied up in the family home that they can access to provide cash for a deposit via a process known as equity release. Equity release allows home owners who have paid down part of their mortgage to get a tax free cash lump some to fund a deposit for their family members or others.

By releasing equity on the family home parents can gifts their kids up to €330,000 tax free, this may be an attractive option for them if the kids are still taking up room on the family couch or wasting thousand of euro’s in rent.

5. Insider Tips for First Time Buyers Ireland 2022

  1. Work with a mortgage broker who will match you with a lender that maximises your mortgage
  2. Reduce your outgoings in the 6 months before applying for a mortgage to maximise your loan
  3. Save as much as you can yourself for a deposit
  4. Top up your deposit with the Help to Buy scheme
  5. Consider equity release as an option to further increase your deposit and purchasing power

By maximising your deposit and working with a broker with access to all potential lenders, first time buyers will make the most of their chances of securing their dream home.

Next Steps – First Time Buyers Ireland 2022

Are you a first time buyer wanting to find a mortgage for your new property? Contact one of our mortgage sherpas today free of charge!

Trying to save money as a first time buyer? Check out our top ten saving tips in Ireland here!

Want to learn more about the first time buyers help to buy scheme here or equity release here.

If you have any questions about lenders or switching mortgages feel free to contact our QFA mortgage sherpas here at moneysherpa.

Buy or Rent? Increasing Gap Between Buyers & Renters

Buy or Rent

Based on the most recent Daft DAFT Rental Price Report moneysherpa.ie analysed how rents now compare to the equivalent monthly mortgage payments on the same properties region by region. 

moneysherpa.ie found that in over three quarters of the country monthly rents tot up to over €100,000 more than the equivalent mortgage repayments over 30 years. With West County Dublin showing the highest difference at €297,000 more in rent paid over 30 years versus the monthly repayments with a 30 year fixed rate mortgage.

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moneysherpa.ie analysis of Monthly Rent v Mortgage Payments

The region with the lowest gap between monthly rents and mortgage repayments was South County Dublin, however even there renting was over €37,000 more expensive than buying.

The Irish Central Bank imposed lending limit of 3.5 times salary is one of the strictest lending caps in Europe, with would-be buyers being forced to continue renting as they are unable to get a mortgage due to the bank’s rules. 

The combination of ‘trapped’ renters and a shortage of new rental supply has led to the spiraling rent inflation seen in the recent DAFT.ie report, with rents up 10.3% year on year on average across the country.

The moneysherpa.ie analysis takes the DAFT.ie rent data and compares it to the equivalent monthly mortgage repayment. Based on the 30 year fixed rate mortgage available from Avant Money for a home of the same value assuming a loan to value of 90%. 

Commenting on the analysis Mark Coan of moneysherpa.ie said 

“This analysis raises some significant questions about the current Central Bank lending rules, which are in effect creating a chasm between those who can afford property and those that can not.”

“Those that can meet the current lending rules, will pay over €100,000 less to live in their home for 30 years and create an asset that they can pass onto the next generation. “

“Those that can’t, even though they are paying a monthly rent that would be more than their mortgage repayments, are €100,000 worse off and will accumulate no assets after paying 30 years of rent.

 “With fixed mortgage rates now available for 30 years there is less risk of current renters defaulting on their mortgage than on their rapidly rising rents. The Central Bank lending rules have to change and change soon to reflect that new reality.” 

“The idea that relaxing the rules will inflate housing costs further is misguided, housing cost inflation is due to lack of supply and is already here in the form of rising rents. Relaxing the rules will simply allow more people to own their own homes and help become financially secure”

moneysherpa.ie has also developed a free online calculator that can be used to calculate how your own monthly rent would compare to a mortgage repayment.

Average regional rents, house prices and monthly mortgage repayments over 30 years. 

RegionHouse PriceMonthly RentMonthly MortgageMonthly DifferenceTotal 30 Year Difference
South County Dublin€625,801€2,258€2,154€104€37,380
Monaghan€208,932€925€719€206€74,089
Donegal€177,740€826€612€214€77,102
Leitrim€158,246€779€545€234€84,340
Kilkenny€262,027€1,162€902€260€93,613
Mayo€185,864€915€640€275€99,075
Tipperary€208,980€1,001€719€282€101,389
Cavan€183,454€934€631€303€108,902
Galway€241,335€1,138€831€307€110,615
Wicklow€383,508€1,630€1,320€310€111,552
Longford€168,327€897€579€318€114,327
Roscommon€171,621€912€591€321€115,645
Clare€219,745€1,087€756€331€119,009
Limerick€215,172€1,085€741€344€123,956
West Meath€244,409€1,192€841€351€126,245
Offaly€225,152€1,126€775€351€126,349
Carlow€228,590€1,146€787€359€129,288
Waterford€270,703€1,300€932€368€132,541
Sligo€172,192€961€593€368€132,578
Laois€218,219€1,146€751€395€142,140
Wexford€256,295€1,300€882€418€150,396
Cork€255,576€1,300€880€420€151,287
Kildare€307,638€1,544€1,059€485€174,611
Meath€301,992€1,525€1,040€485€174,768
Kerry€229,574€1,300€790€510€183,509
Louth€249,525€1,396€859€537€193,345
South City Dublin€446,415€2,145€1,537€608€218,997
North County Dublin€352,134€1,897€1,212€685€246,551
North City Dublin€370,992€2,006€1,277€729€262,422
City Centre Dublin€354,432€1,996€1,220€776€279,343
West County Dublin€329,858€1,962€1,135€827€297,556

Data based on Q4 Daft.ie House Price and Rent report and latest mortgage rates from moneysherpa.ie.

moneysherpa.ie is an independent personal finance websitend regulated by the Central Bank of Ireland and was founded by Mark Coan who previously held senior positions with the Irish Independent and Permanent TSB.

Best Mortgage Protection Insurance Ireland 2022

Mortgage Protection

Our analysis of the best mortgage protection insurance Ireland 2022 includes all the rates available on the market from the main 5 mortgage protection providers in Ireland. 

Our winner as Best Mortgage Provider Overall is Zurich Life. You can sign up to Zurich here now or read our full market review and other recommendations below.

If you got your protection through your bank or haven’t switched recently you will probably save around €3,600 by switching. As life expectancy has increased life and mortgage protection costs have dropped, a win win for all!

The beauty is you will likely get a better policy, save money and have it all done and dusted in less than 20 minutes. We have the best tools, the best experts and aren’t tied to any provider. So read on to get the full lowdown on how much you could save.

  1. 4 Things to Look Out for When Picking the Best Mortgage Protection – Best Mortgage Protection Ireland 2022
  2. Our best mortgage protection by type – Best Mortgage Protection Ireland 2022
  3. Best mortgage protection insurance, the verdict – Best Mortgage Protection Ireland 2022

4 things to look out for when picking the best mortgage protection – Best mortgage protection insurance Ireland 2022

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At its core Mortgage Protection Insurance does what it says on the tin. It pays off your outstanding mortgage if you die. That’s why lenders insist you take out a mortgage protection policy before giving you a mortgage in the first place. [1]

If you are in good health a competitive policy on typical mortgage of around €200,000 should come out at around the €20 a month mark.

That said all sorts of bells and whistles can be tacked on by providers to jack up the price and if you got your mortgage protection from the bank when you took out your mortgage you will definitely be paying over the odds.

Providers will quote you the non discounted price or try to up sell you to a full life insurance package that insures more than your mortgage, when most people only want no frills mortgage protection.

So apart from the rate, what does matter when you are picking your mortgage protection?

Dual Mortgage Protection Insurance

Unlike some of the other add ons, dual mortgage protection can make a lot of sense for most couples.

If you have a standard single or joint protection policy, only the mortgage gets cleared if you both die. If you have a Dual policy however, you get two payments. One to clear the mortgage the other to your remaining family.

The reason that this makes sense is that the cost of a Dual policy is only slightly more than a Single/Joint policy. So if you were thinking about a life policy anyway to pass on something to the kids this can be a very cost effective way to do it.

Conversion Option or Guaranteed Insurability

One big trap to avoid with life insurance is that after a health scare, premiums rocket or you may not be able to get insured at all.

Think of a Conversion and Guaranteed Insurability options as get out of jail free cards if this happens.

With a conversion option at some point in the future you can turn your mortgage protection policy into a full life insurance policy without having to answer any medical questions.

Guaranteed Insurability works a similar way. You can increase your cover without having to answer any health questions on special occasions such as:

  • A new mortgage – remember you can always switch mortgage so can do this at will
  • The birth of a child
  • A new marriage

New Ireland, Royal London and Zurich offer a conversion option and everyone will offer Guaranteed Insurability. Again either option costs a little more, but having one of these in place to secure a ‘get out of jail free card’ is almost certainly worth it on balance.

Mortgage Protection Premium Waiver

This one is unique to Zurich, they will pay your Mortgage Protection if your injured or too incapacitated to work for more than 13 weeks.

If you are on a lower premium then I’d probably wouldn’t weigh this too heavily, but if you have a very large mortgage or health issues it might provide a welcome parachute option.

Underwriting Approach

If you’re as fit as a fiddle this doesn’t make much difference, but if you have any health conditions or family history then knowing which provider is most likely to underwrite your policy becomes the single most important thing.

That’s where talking to a broker who can match you with the best provider for you really makes sense. Brokers are matching customers with providers all the time and know which providers are likely to give you the best combination of approval odds and price.

The good news is most brokers are free to use as they are paid for by the lender. Make sure they aren’t tied to a particular provider though so can give you the best deal in the market.

Provider BenefitsIrish LifeNew IrelandAvivaZurichRoyal London
Conversion OptionXYXYY
Guaranteed InsurabilityYYYYY
Waiver of PremiumXXXYX
Underwriting ApproachFairGoodFairTightTight

Our Best Mortgage Protection Ireland 2022 by Type – Best Mortgage Protection Insurance Ireland 2022

So what is the best mortgage protection insurance Ireland 2022?

Here’s our recommendations.

  • Best overall mortgage protection insurance – Zurich Life
  • Best no frills mortgage protection insurance – Royal London
  • Best for those with pre-existing health issues – New Ireland

Here’s how the ratings broke down in each of our categories, the key data for the best mortgage protection insurance Ireland 2022 and the key reasons we selected each category winner.

Best Mortgage Protection Ireland overall – Best mortgage protection insurance Ireland 2022

moneysherpa recommended
Best Overall
ProviderBenefitsUnderwritingPriceOverall
Zurich LifeBestBottom 2Top 2Excellent

If you’re in good shape and looking for good value while still getting the key benefits look no further than the Zurich Mortgage Protection Insurance product

Zurich’s mortgage protection has the strongest line up of benefits across all the providers offering all three of the key benefits.

  • Conversion option
  • Guaranteed Insurability
  • Waiver of Premium

Crucially Zurich’s Mortgage Protection offering also scored strongly on price, neck and neck with Royal London’s Mortgage Protection product.

This combination of strong benefits and good value saw Zurich clinch moneysherpa’s top spot as best Mortgage protection provider overall Ireland 2022.

If the extra benefits Zurich offer aren’t for you or you think an existing health condition may make getting mortgage protection difficult read on for our other recommendations.

Best No Frills Mortgage Protection Insurance – Best mortgage protection insurance Ireland 2022

recommended
ProviderBenefitsUnderwritingPriceOverall
Royal LondonAverageBottom 2Number 1Good

If you aren’t that bothered about the extra benefits of the Zurich Life Mortgage Protection package and just want a rock bottom price then we recommend Royal London’s Mortgage Protection Insurance.

Royal London consistently provide some of the keenest pricing in the market, even edging out Zurich Life our overall recommendation.

If you aren’t that worried about covering the costs of future health risks then Royal London’s Mortgage Protection offering fits the bill perfectly.

Best Mortgage Protection for Existing Health Conditions – Best mortgage protection insurance Ireland 2022

recommended
ProviderBenefitsUnderwritingPriceOverall
New IrelandGoodBestBottom 2Good

If you have personal or family health conditions that are likely to be flagged up as part of the mortgage protection health questionnaire, your first priority is to get approved with price and benefits slipping down the pecking order.

A broker will be able to give you the best steer on which provider is likely to suit you best in this case, but generally the more expensive providers tend to have more sympathetic underwriting approaches.

Of these New Ireland is the pick of the pack, with pricing that’s still not the worst out there, supportive underwriting and decent benefits.

Best mortgage protection insurance Ireland 2022, the Verdict

Whether you are looking for no frills, flexible underwriting or big benefits, we hope this article helped you cut through the fog around mortgage protection in Ireland and help you choose the best mortgage protection insurance Ireland 2022.

The mortgage protection policy you have can make a huge difference to your wallet, in the middle of buying a home many don’t give it much thought and then pay over the odds for years.

Overall, the Zurich Mortgage Protection Insurance offering came clearly out on top as the overall best mortgage protection product. Establishing a big lead in the ratings with their market leading benefits and competitive pricing.

For those looking for no frills we recommend Royal London and for those who need a flexible underwriting approach New Ireland.

Overall you can expect to save over €3,600 by switching your existing provider to one of our recommended providers. Even if you are on one of the providers currently you will still probably save as premiums have come down generally.

You can get a free quote on your own mortgage protection savings from our partner DFP here, it takes less than 20 minutes to switch.

If you want to know more about switching your mortgage you can click here. You can read our founders recent piece for extra.ie on the big mortgage switch we are seeing in Ireland right now here.

Or you can check out our handy switching mortgage guide here.

How Long Does Mortgage Approval Take & How Do I Get Pre-Approval Now – Ireland 2022

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How long does mortgage approval take ireland

Buying a home is probably the biggest financial decision you will ever make and one of life’s most stressful times. So you are probably super keen to know how long does mortgage approval take and can you get pre-approval or approval in principle like yesterday.

Knowing how mortgage approval and pre-approval works in Ireland can help you secure your dream home and reduce your stress levels.

That’s because how you apply makes a big difference to how much you can borrow and how long the whole process will take.

With our Ultimate Guide to how to mortgage approval Ireland 2022, you could borrow up to 4.5 times your joint income and get the whole thing done and dusted in less than 3 months.

Here’s our top 3 how to get mortgage approval Ireland 2022 tips

  • Maximise your savings in the 6 months before you apply to maximise what you can borrow
  • Understand how best to navigate the mortgage approval process to minimise delay
  • Use a broker with a wide selection of lenders to maximise your mortgage approval odds

Use our tool to get Pre-Approved now below.

If you want to find out more before diving in read on to see understand how you can get mortgage approval and maximise how much you could borrow while minimising the hassle factor.

  1. Work Out How Much You Can Borrow – How long does mortgage approval take Ireland 2022
  2. Maximise My Approval Chances – How long does mortgage approval take Ireland 2022
  3. Get Some Help – How long does mortgage approval take Ireland 2022
  4. What Happens Next – How long does mortgage approval take Ireland 2022

Work Out How Much You Can Borrow – How long does mortgage approval take Ireland 2022

The first step is to work out how much mortgage you can get, you might not need to borrow up to your limit, but it will help you to understand your maximum budget in case you find yourself in a bidding war for your new gaff.

To help avoid a credit bubble like the one that went pop back in 2008 the Central Bank sets some absolute maximum limits that no lender can go beyond.

If you are buying your home to live in, the limit is the lower of either

  • Income – 4.5 times your joint gross income per year
  • Deposit – 10 times your deposit

Wait a minute before you rush off and bid on that dream home, the Central Bank only allows 20% of all borrowers in any year borrow up to these limits.

The lenders are therefore very picky about who gets these ‘exceptions’ only putting forward people with squeaky clean credit histories and very high levels of disposable income.

If you fall outside the top 20% of applications then the limits are

  • Income – 3.5 times your joint gross income per year
  • Deposit – 10 times your deposit for first time buyers and 5 time for others

As part of the application process the lenders will also run the rule over your ability to repay the loan. Based on this they may lend you less than the limits above or indeed nothing at all.

For most people the 3.5 times salary limit is the one that applies and gives the best idea of your budget. However if you need an exception to make up the numbers or want to maximise your odds of approval you can use our instant Approval In Principle (AIP) tool below.

Our tool runs the numbers based on your income and expenditure and instantly spits out your odds of mortgage approval across the lenders. Even better we will then automatically email you with a provisional Approval In Principle that you can use to view property and start your house hunting!

Maximise My Approval Chances – How long does mortgage approval take Ireland 2022

Even if you have enough disposable income for mortgage approval on paper based on our provisional AIP calculator we then have to back this up with evidence.

Lenders try to work out, based on information on your application for what’s know as a full Approval In Principle, the likelihood of you not paying back the mortgage in full. If a loan goes south that’s a big hole in their profits, so the more risk they think you are the less they will lend.

This means you can maximise the mortgage you can get by knowing what they are looking for and getting your finances in shape in advance of mortgage approval.

This is why the question how long does mortgage approval take can have a different answer depending on your circumstances. A switcher can be done in 6 weeks as they have solid proof they can make the repayments, while someone who doesn’t have evidence of spare cash left over might have to wait up to 6 months before even applying.

The 6 months before the application is critical as lenders will look at your bank statements in this period to assess your ability to repay the loan as part of the application.

So what are the key things you can do to maximise your approval chances?

  1. Maximise your Income – Many lenders include 50% of overtime, bonuses and commission, so maximising these can be a big help.
  2. Clear your outstanding loans – These eat into your ability to repay and are usually higher interest than your mortgage will be.
  3. Secure your employment – Make sure you have finished any probation period or have a long term contract.
  4. Don’t splurge – Minimise your outgoings, so you show consistent evidence of saving some money at the end of every month.
  5. Delete your Paddy Power app – Any major spend on online gambling is a big no no and don’t try to be smart by moving it to your Revolut account the lenders are wise to that and will ask for statements.

Keep your nose clean for 6 months and you will demonstrate to the lenders you can be trusted and will maximise your mortgage potential.

Get Some Help – How long does mortgage approval take Ireland 2022

So you have 6 months of sparkling clean bank statements and you are sick of living on your mates couch, what do you do next?

You have two choices to kick start the application process.

  1. Apply to one of the lenders directly
  2. Apply to a lender through a broker

Which lender you apply to can make a huge difference to your approval chances and what you will pay over the course of the mortgage. That’s why we recommend using a broker for your application.

A broker can look at your situation and match you with the best lender to maximise your approval chances and minimise your repayments. Brokers are often free to use and are impartial as they get paid the same commission 1% of the mortgage value by all the lenders.

Not all brokers are created equal though. Check out if your broker has:

  • Access to the best lenders for rate Avant Money, ICS, Haven and Finance Ireland
  • No fees or low fees for your type of application
  • An online application process to make the paperwork easier
  • A best rate guarantee

What Happens Next – How long does mortgage approval take Ireland 2022

Once you have chosen your broker you can get the application underway.

Mortgage Customer Journey Final

1. Apply Online

First up you will need to confirm your personal and financial details to get your instant Approval In Principle. You can jump right in below to start the process now.

Once you have your provisional approval you can upload supporting documents like your bank statements and proof of identity onto the brokers application platform.

These documents are needed to help prove you can repay the mortgage and also prove you are who you say you are.

2. Choose Mortgage & Lender

Your broker then reviews your details plus documents and recommends the best lender and mortgage product. As each lenders approval policy is different they will match you with the best one for you.

For example, ICS lend more to public servants and is good for short term fixed rates. Avant Money on the other hand don’t do exceptions above the 3.5 salary, but have the best long term fixed rates.

They will also run you through the other options and why they think they aren’t a fit for you at this point.

3. Get Full Approval In Principle (AIP)

Your broker will then use the documents and details you submitted to apply for approval with the rate and lender you picked. It can take 3 days to 3 weeks to get approval depending on the lender you choose (your broker will fill you in on this).

You can now go bid on a property knowing you have an approval in your back pocket!

4. Get Final Loan Offer

Once your offer has been accepted your broker will have it valued by an independent estate agent. This is so the lender can have confidence that the asset that they are securing the lending on (your new house), is worth what you say it is.

Once the lender has all the details on the property from the broker they issue the final offer, which includes any conditions before you can access or ‘drawdown’ the loan. These are usually things like you must have a life protection policy and home insurance in place, which your broker will help you arrange.

5. Complete House Purchase

Ta Da! The moment you have been waiting for, once the conditions are met the loan is released and you get the keys to your new home!

In a Nutshell – How long does mortgage approval take Ireland 2022

How you apply for a mortgage makes a big difference to how much you can lend, how long it takes and your approval chances.

The first thing to do is to work out how much you can borrow and get your provisional AIP, we have a handy mortgage calculator for that here.

Then you need to make sure all your documentation lines up and if needed clean house on your finances for the 6 months before you apply.

You should then engage with a broker who can guide you to the best lender and help take the pain out of the paperwork. You can check out moneysherpa’s own in house broker teams the mortgage sherpas here.

Finally, make sure you know the process and where you are in it, so you can reduce your stress and maximise your chances of getting your dream home.

We have loads more on help to buy grants, the best rates and mortgage provider reviews here.

If you want to have a chat and talk it through you can click for a mortgage check up with one of our sherpas here.

Avant Logo
  • Rates from 2.02% APRC
  • Fixed for 3-30 Years
  • Tighter approval policy
ICS Logo
  • Rates from 2.78% APRC
  • Fixed for 3-5 Years
  • Flexible approval policy
Finance Ireland Logo
  • Rates from 2.53% APRC
  • Fixed for 3-25 Years
  • Flexible approval policy

You can get more detail on the documents required from the CCPC [1].

Help to buy scheme Ireland 2022- What it is and how you could claim €30,000

Help to Buy scheme Ireland 2021
Help to Buy scheme Ireland 2022

The Help to Buy Scheme Ireland 2022 allows first time buyers in Ireland to claim 10% of the value of their property, which can be anywhere up to €30,000. 

In this article, I will be going into detail about how the Help to Buy scheme works, what you have to do to qualify, how much can be available to you, how to get your taxes refunded, how to get up to date on your taxes so you can qualify, and finally how to apply.

1.How does the Help to Buy scheme Ireland 2022 work?

2. How do I know if I qualify for the Help to Buy scheme Ireland 2022?

3. How much is available to me from the Help to Buy scheme Ireland 2022?

4.How will I receive my tax refund from the Help to Buy scheme 2022?

5.How can I get up-to-date on my taxes for the Help to Buy scheme Ireland 2022?

6.How can I apply to the Help to Buy scheme Ireland 2022?

7. A summary of The Help to Buy scheme Ireland 2022. 

1. How does the Help to Buy scheme Ireland 2022 work?

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The Help to Buy scheme Ireland 2022 is a Government tax refund scheme.

It allows first time buyers to claim 10% of their property value to help them pay deposits on newly built homes.

This incentive offered by the Irish Government lasts until the 31st of December, 2022.

In order to claim from the Help to Buy scheme Ireland 2022, you must have paid the equivalent amount of 10% of your property value in tax in the previous 4 years before moving into your new home. 

This refers to Income Tax and DIRT.  You cannot claim from USC or PRSI. 

Don’t worry too much if you feel that you haven’t paid enough tax to qualify, as in actual fact most people in Ireland likely have paid 10% of their property tax within 4 years and can therefore apply to have their tax refunded for their new home under the Help to Buy scheme. 

2. How do I know if I qualify for the Help to Buy scheme Ireland 2022?

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Even if all your taxes are up to date, there are still some more conditions that you need to take into consideration before applying to this scheme.

In order to qualify, you must-

  • Be a first time buyer in Ireland and outside of Ireland.
  • Be moving in with an applicant who is also a first time buyer if more than one person will be purchasing the home, ie) if one applicant is not a first time buyer then you cannot qualify for this scheme. 
  • Be moving into a newly built or self built home.
  • Be using the property as your principal private residence for 5 years.
  • Be moving into a home that isn’t a conversion or restoration, however a conversion of a non-domestic home into a domestic home can qualify. 
  • Be moving into a home worth less than €500,000.
  • Have a mortgage with a loan to value of 70%. For example, if you are purchasing a home worth €200,000, your mortgage must be €175,000.
  • Not pay for home in cash. 
  • Not be an investor or landlord.
  • Not be using property for investment purposes. 
  • Have a solicitor or contractor registered with the Revenue Commission.

While it may seem that there are many conditions to this scheme, remember that this incentive is to help first time buyers get on the property ladder. 

Therefore if you are a first time buyer and have been tax compliant in the 4 years before moving into your new property, you will most likely be able to qualify for this scheme. 

3. How much is available to me from the Help to Buy scheme Ireland 2022?

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Under the Help to Buy scheme Ireland 2022, first time buyers can claim, 

  • 10% of the purchase price of their new build, for example a home worth €200,000 can claim €20,000.
  • The amount of Income Tax and DIRT paid in the previous 4 years before moving.

Or for self-builds, 

  • 10% completion value of their self-build home. 

In order to claim from this scheme, your home must be valued at €500,000 or less. 

The most you can claim from this scheme is €30,000, meaning that even if your home is valued at more than €300,000, you still can only receive €30,000 max.

Value of propertyRates Total claim received
€300,00010%€30,000
€400,00010%€30,000- cannot receive more than €30,000.

4.How will I receive my tax refund from the Help to Buy scheme 2022?

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So if you qualify for this scheme, your tax refund will be paid to you depending on your property. 

If you buy a new build after 1 January 2017 (4 years ago), the refund is paid directly to the builder.

If you self-build the property after 1 January 2017, the refund is paid to a bank account you hold with your loan provider.

This money can be used to help first-time buyers cover the costs of their deposits.

5. How do I get my taxes up to date for the Help to Buy scheme Ireland 2022?

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In order to claim from this scheme, you must be fully tax compliant and all your taxes must be up to date. 

However if your taxes are not up to date, you must complete a Form 12 if you are a PAYE earner or a Form 11 if you are self-employed.

You must fill out these tax forms in the 4 year period before you move into your new home and pay any outstanding taxes. 

6. How can I apply to the Help to Buy scheme Ireland 2022?

htb 4 1 edited

If you think you qualify for the help to buy scheme Ireland, then you should go to Revenues MyAccount service, where you will be told how much tax refund is available to you as well as apply. 

7. In a Nutshell – Help to Buy Scheme Ireland 2022

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In short, the Help to buy scheme 2022 is a great incentive for new first time buyers who are looking to find their way into today’s housing market.

If you are looking to buy a new home as a first time buyer then this scheme is designed to help you.

That is why we at moneysherpa believe you should check to see if you’re eligible for this scheme and apply as soon as you can before it ends on the 31st of December, 2022.

Next Steps – Help to Buy Scheme Ireland 2022

Wanting to find a mortgage for your new property? Contact one of our mortgage sherpas today free of charge or you get provisional approval in 5 minutes with our instant approval calculator, so you can get going and view some properties!

Want to see how much you could potentially save? Use our savings potential calculator here!

If you have any questions about lenders or switching mortgages feel free to contact our QFA mortgage sherpas here at moneysherpa.

Stamp Duty Ireland 2022- What is Stamp Duty & Why You Need to Know About It

stamp duty

So what is stamp duty Ireland and do you need to pay it? Stamp duty is a tax that is paid when a property has been transferred from one person to another.

Stamp Duty Ireland.

When someone transfers their property onto you, you become the property owner and are charged a stamp duty tax.

Stamp duty is a tax charged on written documents that transfer ownership of land from one person to another. Stamp duty applies to all residential and non-residential properties. 

The amount of stamp duty you pay depends on how much your property is worth; so the more valuable your property, the more stamp duty you’ll pay.

In this article. I am going to be breaking down what stamp duty applies to, how it is calculated, the exemptions to stamp duty, will stamp duty be charged on new buildings, the new higher rate introduced in Ireland in 2022, the charges associated with stamp duty, stamp duty in regards to gifts and inheritance and an overall summary of stamp duty. 

  1. What does stamp duty apply to?
  2. How do I calculate stamp duty?
  3. What exemptions are there to stamp duty?
  4. Is stamp duty charged on new builds?
  5. What is the new higher stamp rate that has been introduced?
  6. What costs are involved with stamp duty?
  7. Do I have to pay stamp duty on a property I was gifted/inherited?
  8. Summary. 

1.What does stamp duty Ireland apply to?

stamp duty 1

Stamp duty will be applied every time you become a property owner. It applies to all properties, whether they be brand new or second hand. However new builds will not be subject to VAT, I go into this in more detail here.

Stamp duty applies to all residential properties such as houses, apartments or sites that will be used for buildings .

It also applies to non-residential property, such as land or housing sites without residential buildings. 

2. How do I calculate stamp duty?

stamp duty 2

In Ireland ,stamp duty is levied at 1% up to €1 million. Any property over €1 million is levied at 2%. 

Here’s an example excluding VAT-

Lets say you have a property worth €2 million. 

First €1 million1%€10,000
Remaining €1 million2%€20,000
Total stamp duty €30,000

For non-residential properties, stamp duty is charged at 6%.

So what is the difference between residential and non-residential properties?

To put it simply, a residential property is one suitable for dwelling, such as a home or an apartment. Stamp duty is charged at 1-2% for residential properties. 

Don’t worry too much about calculating the stamp duty of your own property, as your solicitor will do this for you. 

However, it’s still good to know roughly how much stamp duty you will have to pay before purchasing a property.

3.What exemptions are there to stamp duty Ireland?

stamp duty 3

Of course there are a few exceptions where you don’t have to pay stamp duty. 

There is no stamp duty charged on the transfer of property between-

  • Spouses and civil partners.
  • Former spouses (divorced).
  • One cohabitant to their other cohabitant. 

If you are buying a home under the local authority tenant purchase scheme you will only be charged €100 worth of stamp duty. 

4.Is stamp duty Ireland charged on new builds?

stamp duty 5

For new builds, stamp duty is still paid, however it is calculated differently. For new builds you will be charged stamp duty on the value of the home and VAT will not be included. 

Here’s an example-

The standard rate of VAT is 23%. Let’s say we have a property worth €450,000. 23% of €450,000 is €103,500. This means that before VAT the value of the home was €346,500. Hence our 1% stamp duty tax will be charged on the €346,500, not the €450,000.

This only applies to new builds, not 2nd hand properties. 

5.What is the higher stamp duty Ireland rate that has been introduced in 2021?

stamp duty 6

In July 2021, an act was introduced that charges 10% stamp duty on property owners who have bought 10 or more properties within one year after the 20th of May 2021. 

This act was introduced to stop the bulk buying of homes in Ireland and to discourage investment funds from buying up housing estates, so first time buyers are given a chance to purchase a home. 

This higher rate does NOT apply to apartments. It also does not apply to homes bought for social housing purposes. 

6.What are the costs involved with stamp duty Ireland?

stamp duty 7

Your solicitor will calculate how much stamp duty is due for you before the sale is closed. This stamp duty is paid to the Revenue Commission and a stamp is placed on the deeds of the property. 

Whilst having a solicitor to do all the hard paper work for you is a huge help, it does come at a price.

The price of a solicitor to guide you through this process will vary. Some solicitors will charge a flat fee, whilst some will ask for a % value of the property, such as 1 or 2%. 

You should be prepared to spend between €1000-€3000 in legal fees along with VAT. 

This is why it is important to research a good solicitor that will get the job done at a reasonable price before thinking about transferring properties. Check out more on solicitor fees here.

7. Do I have to pay stamp duty Ireland on a property I inherited or was gifted?

stamp duty 8

According to the Revenue Commission [1] , if you are given a property as a gift that is situated in Ireland and the property has been transferred to you then yes, you will still have to pay stamp duty

However you will NOT have to pay stamp duty on a property that you have inherited, such as a property left to you in a will.

In a Nutshell – Stamp duty Ireland

stamp duty 9

So in summary, stamp duty is a major factor to take into consideration when you are planning on buying a property.

It is important to remember that between buying the property, solicitor fees as well as stamp duty, buying property requires a lot of money. Hence you should thoroughly research how much a property will cost you and put a lot of thought in before you start enquiring.

From this article, you should hopefully have a better understanding of how stamp duty is calculated and what factors you should keep in mind before looking about buying a new property.  

What’s Next?

If you have any more questions about stamp duty or buying a new property feel free to book an appointment with our financial advisors here at moneysherpa free of charge here.

If you want to see what you could save by calculating your repayments and see all mortgage provider rates you can click here.

If you want to know more about other mortgage providers you can click here.

If you want to know more about longer term fixed rates, you can check out our deep dive best fixed rate mortgage piece here or how fixed versus variable compares here.

If you want to know more about switching you can click here. Or you can check out our handy switching mortgage guide here and our remortgaging guide here. If you still have questions check out our switching Q&A here.

If you are thinking of freeing up some extra cash from your home, take a look at our mortgage top up tips here or if you are over 55 our equity release rundown here.

If you want to get your savings started right now, set up a free no obligation video call with a mortgage sherpa here, covering not only the best rate, but also helping choose the lender most likely to approve you and helping take the pain out of the paperwork.

APRC, the Ultimate Guide. What It Is and Why It Could Save You €20,000+.

ICS Mortgages Review
APRC

So what is Annual Percentage Rate of Change, (APRC) ? While it may seem confusing at first, APRC is a helpful tool that shows us the true cost of mortgages, so we can compare them to find the cheapest option. That’s why the CCPC [1] recommends using APRC to compare mortgages.

APRC is a really handy guide that tells us which mortgage is the best value for money if we see it through. APRC takes all costs involved in a mortgage and converts it into a percentage. This percentage shows us how much a mortgage costs after every factor is taken into consideration. 

This is really helpful when trying to find the best mortgage available, as all you have to do is look at the APRC percentage. The lower the percentage, the cheaper the mortgage is if it’s paid off completely. 

In this article, I will be discussing APRC in a bit more detail to help you better understand how it works, why it is useful to us, the difference between APR and APRC, how APRC is calculated and finally, how to get a loan with low APRC. 

  1. What is APRC?
  2. Why is APRC useful?
  3. What is the difference between APR and APRC?
  4. How is APRC calculated?
  5. How to get a loan with low APRC?
  6. Summary

1.What is APRC?

APRC 1

Annual Percentage Rate of Change (APRC) is a useful tool when comparing mortgages. It shows us the total cost of a mortgage when all factors are taken into consideration.

Factors such as fees and interest rates will greatly affect how much your mortgage will cost you overall. 

APRC will take all these factors into consideration to show us in percentage form how much a mortgage with a particular lender will cost us if we see the mortgage through to the end. 

It helps us see at a glance which mortgage provider offers the best mortgage to us after all costs have been taken into consideration. Remember; the lower the APRC rate, the cheaper the mortgage. 

2.Why is APRC useful?

APRC 2

Marketers will often try to persuade homeowners into buying a specific mortgage with attractive offers such as low starting interest rates or cashback. 

However, once you take the different factors into consideration, such as high variable rates introduced after the introductory period is over, you may soon discover that a once appealing mortgage is in reality quite expensive compared to other lenders. 

APRC helps homeowners compare mortgages from different lenders and prevents them from being swayed by attractive starting rates and other misleading factors. 

Let’s look at an example. Say a homeowner wants to mortgage a house worth €150000 and has a deposit down of €30000. APRC will help us see out of these 2 mortgages which is this best value for €120000. 

Mortgage AMortgage B
Starting Rate 0.99% for 24 months 1.39% for 24 months 
Standard Variable Rate 4.99% for 23 years 4.75% for 23 years 
Fees up front €1600

At a glance, many may think that Mortgage A is the best option, as it offers a much cheaper starting rate. 

However, as APRC will tell us, Mortgage B is in fact the better option, as it offers a lower standard variable rate than Mortgage A , as well as no fee up front.  

Mortgage AMortgage B
Overall cost €245,559€238,332
APRC 4.5%4.2%

Because Mortgage B’s APRC percentage is lower, it means that it is the cheaper option, saving you €7,227 over the lifetime of the mortgage.

3. What is the difference between APR and APRC ?

APRC 3

It’s very easy to get confused between APR and APRC, as they are similar in name and in meaning. 

Annual Percentage Rate (APR) works in a similar way to APRC, as it helps us compare the total cost of loans and credit. APR shows a percentage of how much interest the borrower pays on a loan, such as a mortgage, per year. 

Annual Percentage Rate of Change shows a percentage of the total cost of a loan such as a mortgage after all factors are considered.

In comparison to APR, APRC doesn’t just show us the cost of a loan after one year, instead it shows us how much the loan will cost us once it’s paid in full.

4.How is APRC calculated?

APRC 4

APRC takes a variety of different factors into consideration, such as broker fees and different interest rates, to calculate how much your mortgage will cost you for the full period of the loan. 

One vital piece of information that you must remember when looking at different APRC percentages on loans is that APRC takes all factors into consideration assuming that you will see this loan out until it has been PAID IN FULL. 

APRC shows how much you will pay over the full term of the mortgage, meaning APRC is not useful if you are considering moving house or switching lenders. 

So before you decide to look at different APRC percentages to help decide what the best mortgage for you is, consider certain factors, such as how long will I stay in this property? What life events are likely to happen in the near future that will affect my living situation?

If you think that you may be switching mortgages or moving property in the near future, APRC therefore might not be as important. This is because as you are planning to pay off the mortgage early and get a new one when you switch or move the introductory rate will apply for a larger proportion of the loan than shown in the APRC which assumes you will have the mortgage for the full term.

This is why although not making sense for everybody cashback and low introductory rates are a good option for those looking to switch regularly.

5. How do I get a loan with a low APRC?

APRC 5

Getting your loan with APRC is influenced by a variety of factors like:

The amount of available equity in your property– If you have a lot of available equity in your property and apply for a smaller loan, you are less of a risk to your lender, therefore earning a better interest rate bringing your APRC percentage down.

How much you want to borrow– The more you borrow, the lower rate you’ll be paying which again affects your APRC, as APRC assumes you will stay with this mortgage until it is paid in full.

The length of the mortgage- The longer your mortgage is the less you will pay per month, as the payments are stretched across a longer period of time.

Size of deposit– The more money you have in your deposit on a house, the lower the interest rate, as you are not seen as a risk to the lender.

6.Summary – APRC

So to summarise, when you think APRC, remember-

APRC is a tool to help you compare mortgages and find the best mortgage available.

The lower the percentage, the cheaper the mortgage is once it’s paid full term.

APRC shows percentages assuming you will stick with one particular mortgage to the end.

Always predict changes in your living situation in the near future before thinking about using APRC to find the best mortgage.

What’s next?

If you have any more questions about stamp duty or buying a new property feel free to book an appointment with our financial advisors here at moneysherpa free of charge here.

If you want to see what you could save by calculating your repayments and see all mortgage provider rates you can click here.

If you want to know more about other mortgage providers you can click here.

If you want to know more about longer term fixed rates, you can check out our deep dive best fixed rate mortgage piece here or how fixed versus variable compares here.

If you want to know more about switching you can click here. Or you can check out our handy switching mortgage guide here and our remortgaging guide here. If you still have questions check out our switching Q&A here.

If you are thinking of freeing up some extra cash from your home, take a look at our mortgage top up tips here or if you are over 55 our equity release rundown here.

If you want to get your savings started right now, set up a free no obligation video call with a mortgage sherpa here, covering not only the best rate, but also helping choose the lender most likely to approve you and helping take the pain out of the paperwork.

What is a Green Mortgage Ireland and why should I consider applying for one?

Green Mortgage Ireland

Green Mortgage Ireland

Green Mortgage Ireland. As the world is becoming more environmentally conscious, so are mortgage lenders. Green mortgages are slowly becoming more and more popular as they are a great incentive to make our homes more energy efficient, which will help us save money as well as our planet.

Here at moneysherpa, we have looked at the different Green Mortgages Ireland, as well as the requirements necessary for a Green Mortgage in Ireland. We have also put together some useful ways you can make home more energy efficient to impress Green Mortgage providers.

In this article, I will be discussing why you should consider applying for a Green Mortgage, what you have to do in order to apply for one, what you can do to make your home more eligible for a Green Mortgage and overall, are Green Mortgages worth the time and effort required?

1. Why should I consider applying for a Green Mortgage Ireland ?

2. What do I need to do to apply for a Green Mortgage Ireland ?

3. How can I make my home more energy efficient? – Green Mortgage Ireland

4. Final verdict – Green Mortgage Ireland.

1. Why should I consider applying for a Green Mortgage Ireland?

green mortgage ireland

As I have mentioned previously, a Green Mortgage acts as an incentive to encourage people to make their homes more environmentally friendly. Lenders will offer certain rewards such as lower interest rates to homeowners whose homes are considered energy efficient. 

Many lenders such as Bank of Ireland and Ulster Bank all offer lower interest rates for homeowners applying for a Green Mortgage. 

Haven Mortgages have offered a 2.15% fixed rate on homes that they believe to be energy efficient, as well as offering €2000 to cover legal costs.

Haven have stated that homeowners with an existing mortgage of €300,000 on a €350,000 home could save up to €3,204 per year by availing of this 2.15% fixed rate, instead of the usual variable rate of 3.7%.  

2. What do I need to do to apply for a Green Mortgage Ireland?

BER

When it comes to Green Mortgages, your bank will ask you for a document known as a Building Energy Rating (BER), which essentially is a calculation of how energy efficient your home is. BER certificates are valid for up to 10 years. 

The BER measures how energy efficient your home is on a scale of A to G, with A being the most energy efficient your home can be. So what factors will affect your BER rating? Well, there are a variety of aspects affecting your BER, such as adequate insulation, a working boiler, etc..

The vast majority of banks will require a BER rating of at least B3 or B2 in order to qualify and apply for a Green Mortgage. 

Lenders such as AIB, Ulster Bank, Bank of Ireland and Haven Mortgages all provide Green Mortgages in Ireland in 2021.

In order to avail of a Green Mortgage, you will have to receive your mortgage from one of these 4 lenders. However, if you are not with any of these specific lenders, you can contact a broker and switch to one of these mortgage providers to avail of a Green Mortgage. 

3. How can I make my home more energy efficient? Green Mortgage Ireland.

green mortgage ireland

There are many simple and straightforward things that we can do to make our homes more energy efficient, which will increase our BER rating as well as save us money in the long run.

We can take certain easy and affordable measures such as keeping the immersion at 65 degrees or using efficient electrical lighting to make our homes B3 worthy. However, if you are willing to invest in making your home even more energy efficient, you could replace your unproductive boiler with a water pump which renews energy, or look about taking further steps to properly insulate your home. 

All these measures, big or small, will help to maximise the energy efficiency of your home and overall will help make your application for a Green Mortgage more likely to succeed, and may even save you money by reducing your energy bills and making your home cheaper to heat!

Final Verdict: Should I apply for a Green Mortgage Ireland?

Green Mortgage Ireland

Overall, Green Mortgages are a great way to save money on a more energy efficient home. Making your home energy efficient won’t only allow you to benefit from a lower fixed interest rate, but will also help you save money in areas such as heating and electricity.

However, making your home more energy efficient does come at a price, so you should only avail of a Green Mortgage if you are willing to put the time, effort and money required into making your home more sustainable.

So, what’s next? Green Mortgage Ireland.

1. Check with your mortgage provider to see if they offer Green Mortgages and if so, what incentives do they offer for those who avail of this mortgage?

2. Research and find out if your home is eligible for a Green Mortgage and check your BER rating by contacting a BER assessor. 

3. Try and find different affordable ways to make your home more energy efficient and B3 worthy.

If you are interested in switching your mortgage to a green mortgage, you can find out more about mortgage switching here.

If you want to calculate how much you would save by switching to a green mortgage, check out our mortgage calculator here.

If you wish to switch mortgage providers to a lender offering Green Mortgages, feel free to contact one of our mortgage sherpas for a free consultation. 

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