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].

Best Mortgage Brokers, 5 Insider Tips – Ireland 2022

mortgage brokers

Working with the right mortgage brokers can make a huge difference, on an average sized mortgage the cost can vary by over €111,000 depending on the deal your broker recommends (Loan of €240,000, 90% LTV, over 35 Years). 

In this article we give you the rundown on what to look for to pick the best mortgage brokers. 

As someone who ran one of the biggest mortgage lenders in the country at PTSB, I was always surprised that only around half of applications were assisted by brokers. In the UK almost 80% of all mortgages applicants work with mortgage brokers.

Using mortgage brokers to help with your mortgage has many advantages, independent advice, wider choice of rate and having an expert with you every step of the way.

A mortgage broker though can come in many shapes and sizes. Some are tied to just a few lenders, some charge for advice, some don’t stay with you on the home buying journey. 

The mortgage brokers you choose can make a real difference to your finances, your home buying journey and your stress levels. That’s why we have covered the ins and outs of choosing the best mortgage brokers for you below, helping you make the right decision.

  1. Overview, mortgage brokers
  2. Service key features, mortgage brokers
  3. Alternatives, mortgage brokers
  4. In a nutshell, mortgage brokers

We recommend moneysherpa’s own in-house mortgage broker team, the mortgage sherpas, as the best way to get a mortgage. They are free, independent, comprehensive, with a best rate lifetime guarantee and the best online enabled service.

You can get more information about broker options locally here.

Read on to get the lowdown as to what separates a great mortgage broker, from a good one.

mortgage brokers

Overview, mortgage brokers

Working with the right broker can make a huge difference, according to the property price register the average house in Ireland is going for €272,000 (data as of March 2021 [1]), a typical 90% mortgage is therefore over €240,000. 

The average cost of a mortgage in Ireland over a term of 35 years can be anywhere between €371,800 with Avant Money upto €483,304 with Bank of Ireland, a difference of over €111,000

There are 5 key things to look out for when picking mortgage brokers, they are

  1. Are they free to use? Mortgage Brokers get paid by the lender on completion of the mortgage, so shouldn’t need to charge you additional fees.
  2. Do they use the best online tools to take the pain out of the paperwork? Do they offer online upload and e signature.
  3. Are they comprehensive? Do they work with all the main banks and four broker exclusive lenders including Avant Money and ICS who currently have the best rates on the market.
  4. Do they offer support after your mortgage is completed? Rates are always changing does the broker monitor the market for better rates you can switch to.
  5. Do they offer the best service? Do they have a dedicated QFA mobile number, direct video diary access, ongoing support ?  

Not all brokers are experienced, independent or have a comprehensive range of lenders, but there are plenty of brokers that are up to snuff. 

Key service features, mortgage brokers

1. Free to Use, mortgage brokers

There is no difference in rate between going directly to your bank or via a broker. This is because brokers are paid by the lenders out of the fees that the lenders would otherwise splurge on marketing. 

This means that going with a broker who doesn’t charge any application fees is 100% free to you. Sounds almost too good to be true, but that’s just the way the broker model works in Ireland. 

Although all mortgage brokers receive a commission from the lenders, most of the larger brokers also charge the client directly, with typical fees ranging from €100-€500. 

This is to help cover the cost of processing the mortgage with the lenders, which can be costly and time consuming for the broker. WIth paper shuttling back and forth between the broker and the bank.

In contrast the some newer brokers have invested in advanced technology platforms to lower the cost of processing the mortgage, so they don’t have to pass on this cost to customers. They are therefore paid fully out of the 1% commission received from the lender.

2. Online Tools, mortgage brokers

Getting a mortgage still requires a lot of paperwork.

In order to protect you in making such a financial commitment there are multiple documents required to be read and signed.

In order to protect the financial system there are ID documents, bank statements etc.. also required.

The right technology can take a lot of the pain out of this paperwork. Look for mortgage brokers with an online upload capability so you can organise your documents easily. A good one will also give you a dashboard so you always know where you are on the journey to getting the mortgage.

Another big help is if you can find a broker who uses e signature. This saves all the bother of printing and scanning or even worse posting documents. Many brokers are now able to complete the whole mortgage journey online.

3. Comprehensive, mortgage brokers

There are four banks and three broker exclusive lenders that offer mortgages currently in Ireland. Most brokers offer three or four lenders on their panel.

Many of the smaller brokers are tied to just one lender and are not able to advise on alternatives. This can make a big difference as not only do lenders have different rates, but also very different lending policies.

ICS for example let public sector workers borrow more than those employed in other sectors, whilst some lenders are more flexible than others in extending credit to some applicants or don’t offer loans for self build etc..

By having an independent broker in your camp they can not only find you the best rate, but also make an experienced assessment of which lender is most likely to approve your application. 

For an average mortgage, Bank of Ireland’s lowest mortgage rate of 3.7% APRC costs €57,000 more than Avant Money’s equivalent rate. There are in fact over 20 deals from the other lenders that are better value.

4. Post Mortgage Support , mortgage brokers

Mortgage rates are changing all the time, what may be a great rate one year might not be the year after. Staying on the best rate throughout your mortgage term can save you thousands. So once you have your mortgage how do you make sure you are still on the best rate?

Make sure the broker you choose monitors the market for you after they get your mortgage. A good broker will get in touch with you automatically if there is a deal that would save you money and switch you to that deal. This guarantees you stay on the best rate all the time.

By choosing the right broker you effectively get “mortgage rate insurance”, a guarantee that as rates change in the market you will know what they mean for you and have help to switch if the new deal saves you money.

5. Best service, mortgage brokers

Using a broker beats going direct to a bank hands down, you gain from years of experience working with different lenders and they can scan the whole market on your behalf. 

Make sure though that your mortgage brokers are all Qualified Financial Advisors (QFA), authorised by the Central Bank, with at least a few years of experience. 

You should also get a dedicated mobile number to contact, plus the option to contact via video calls with flexible hours.

This makes everything more reliable, faster and easier than the approaches used by other brokers and banks.   

Alternatives, mortgage brokers

Go direct to the banks

Obviously you can always go to a bank directly for a mortgage, the biggest advantage of this option is they may already have access to your transaction history so you don’t have to dig out your bank statements. 

With open banking even this advantage has recently disappeared, based on new legislation to help make banking more competitive, moneysherpa and some of the other larger brokers can now access your bank transactions on your behalf if you choose.

The downside of going with your bank is you are practically guaranteed that you will pay thousands more than you need to for a worse level of service than via a broker.

Go to your local mortgage brokers

If you want the help of a broker, but want to sit down face to face rather than over a video call then going through a local mortgage broker is an option. 

As local brokers tend to be smaller though they usually don’t have as many lenders to choose from or as much pull with the lenders. Unless they charge additional fees or are missing the leading lenders from their portfolio, they will usually have access to the same rates as the bigger brokers. 

Obviously though they won’t have the same rate guarantees or technology tools as the new wave of brokers like moneysherpa.

Go to another online broker

There are a number of nationwide brokers in the market who could also be an option. These usually have the advantage of being independent and having a good selection of lenders available. Some also have online tools to help ease the process.

The big drawbacks are they aren’t usually free to use, charging between €100 and €500 a pop and they don’t offer the lifetime best rate guarantee available with moneysherpa.

Daragh Head Shot

Daire McConnon (QFA), mortgage sherpa team lead

In a nutshell, mortgage brokers

Using a mortgage broker has many advantages, independent advice, wider choice of rate and having an expert with you every step of the way.

Working with the right broker can make a huge difference, with the cost of the mortgage over 35 years varying by over €111,000 depending on the deal your broker recommends. 

moneysherpa’s in house mortgage broker service, the mortgage sherpas, is the best way to get a mortgage. Free, Independent, Comprehensive, with a lifetime best rate guarantee and best online enabled service. 

The two things that make the mortgage sherpa offering really stand out from the crowd however are:-

  • The lifetime best rate guarantee. You will always get the same deal as if you went direct and your mortgage deal is constantly monitored to switch you to the best possible rate for the lifetime of your mortgage.
  • The easy to use digitally enabled service. The sherpa fills in the paperwork for you on a videocall and you simply digitally upload all your documents and signatures. Making the process a whole lot easier and faster.

Next Steps

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 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.

You can book a free, no obligation video chat with the mortgage sherpa team here.

You can get more information about broker options locally here.

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?

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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?

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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?

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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?

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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

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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.

Mortgage switching costs, 4 great legal fees and cash back tips

best mortgage rate
mortgage switching costs

Don’t let mortgage switching costs put you off switching. Switching mortgage improves your financial shape more than anything else bar winning the Lotto. In fact, if you bought after 2008 you will probably save over €20,000 by switching to lower rates.

That said, there are some upfront costs you need to know factor in, read on to find out what they are, how you can cover them with cash back and why switching still makes loads of sense.

  1. What are mortgage switching costs and switching mortgage legal fees?
  2. How much are mortgage switching costs, switching mortgage legal fees and how much is it to switch?
  3. Which banks cover mortgage switching costs, switching mortgage legal fees and what options are there?
  4. Does it still make sense to switch after mortgage switching costs and switching mortgage legal fees?

What are mortgages switching costs and switching mortgage legal fees?

The good news is that switching your mortgage is much less stressful, easier and nowhere near as costly than buying a new home. That said there are still some solicitor and estate agent upfront mortgage switching costs.

Don’t panic though these costs are usually much less than the savings from switching and with some lenders switching mortgage legal fees and estate agent costs are fully covered with upfront payments.

There are no land registry or search fees involved with switching, but you will need a solicitor to do a bit of paperwork for you. Switching mortgage legal fees cover the solicitor costs to:

  1. Request your house deeds on behalf of the new bank from your current bank
  2. Review and advise you on the terms of the loan the new bank is offering you
  3. Witness and process the loan agreement for the new bank

These steps give everyone involved in the switch peace of mind, the bank knows your ownership of the property is kosher and you understand the deal being offered to you by the bank.

As well as switching mortgage legal fees, the other mortgage switching cost is a valuation fee. An estate agent selected by the bank will also value your home, this allows the lender to make sure you are on the right mortgage rate.

How much are mortgage switching costs, switching mortgage legal fees and how much is it to switch?

So how much are the mortgage switching costs all in?

Switching mortgage legal fees range from about €1,000 to €1,500 excluding VAT at 23%. Typically solicitors in Dublin will be at the higher end of the range.

moneysherpa have agreed an all in switching price of €1,200 including VAT for customers switching with one of their mortgage sherpas [1]. As well as the VAT this all in fee includes

  • Legal Fees
  • Bank Fees
  • Search/Land Fees
  • Declaration Fees

The other mortgage switching cost is the valuation fee which is much less at around €150.

So if you shop around, your all in costs should come in well below the €2,000 mark inc VAT.

Which banks cover mortgage switching costs, switching mortgage legal fees and what options are there?

Many of the lenders don’t want these costs to put off potential switchers so pay an upfront cashback incentive. These incentives usually cover mortgage switching costs including mortgage legal fees with cash to spare.

Ulster, AIB and KBC offer €1,500, €2,000 and €3,000 to cover mortgage switching costs.

PTSB, EBS and BoI offer 2% and 3% of the mortgage loan as cashback. So on a typical loan size of €200,000 that’s €4,000 to €6,000 into your hand, covering your legal fee costs and then some.

These deals are really useful if you can’t afford to cover the mortgage switching costs, but would save by switching. They also are a great option if you are looking to switch multiple times, as under EU law lenders can’t stop you taking more than one cash back.

That said, if you can afford to pay the mortgage switching costs upfront and are looking to get on the best long term deal, you should us the APRC rate rather than the cash back deal to choose your mortgage provider.

In our latest mortgage market review the  Avant Money 7 year fixed rate product came out on top, despite having no cash back at all. The 7 year fixed rate is €6,775 cheaper than the best cash back product available on a typical loan size of €200,000.

That’s why you are often better to ignore cash back if you can and cover the mortgage switching costs yourself if you can afford it.

Does it still make sense to switch after mortgage switching costs and switching mortgage legal fees?

If you bought your house after 2008 you are probably on rates of 4% plus.

The rates for switchers right now are at an all time low at around 2%.

This big difference in rate means that you would save over €25,000 by switching on a typical mortgage size of €200,000.

This means that even after you factored in the mortgage switching costs including the legal fees, you would save over €23,000 over the lifetime of the mortgage.

The really great news is that comparing rates and switching is easier than ever thanks to services like moneysherpa.

moneysherpa have agreed an all in switching price of €1,200 including VAT for customers switching with one of their mortgage sherpa. Our recommended solicitor panel cover the majority of the country and are experts in property conveyancing, so if you choose to work with one of our mortgage sherpa’s we will point you in the right direction.

You can calculate your savings and book an appointment online instantly here.

One of our mortgage sherpas will also handle all the paperwork and answer all of your questions for free.

You can read our founder’s latest piece for extra.ie on the big mortgage switch and how much you will save here. Or you can check out our handy switching mortgage guide here.

If you want to find out more about switching, you can read our ultimate guide to switching here or our review of the best mortgage deals here.

Need mortgage help? Meet the sherpas

moneysherpa team

What is a mortgage sherpa?

Our team of mortgage sherpas will help you navigate your mortgage journey. Because we know mortgages inside out we can help you get the best deal from the lenders.

 

Ireland 2
moneysherpa rated Best in Ireland

You don’t have to take our word for it, we are rated the No 1 Mortgage Broker in Ireland by the comparison site Best in Ireland.

Our mortgage sherpas are experienced and fully qualified mortgage advisors, who have worked for all the major lenders so know the landscape inside out.

Best of all they are free to use. Our sherpas do all the hard work for the lenders, so they pay us direct when you receive your loan.

We work with all the major lenders, so can give you independent advice and you get exactly the same rate from lenders as you would if you went direct. Win Win.

Our sherpa’s will handle the mortgage application for you, taking the pain out of the paperwork. We have even partnered with expert property solicitors to offer the best conveyancing prices exclusively to moneysherpa customers. 

Plus, we are the only provider offering rate insurance for free, monitoring the whole market and letting you know when there is a better deal out there. So you don’t pay a single cent more than you have to.

To get started on your journey, read on.

LMC 9672

Want to bag yourself a sherpa? – Here’s how.

You can schedule a free, no obligation video call with one of our sherpas here. 

If you prefer you can also use our on line tools below to get started on your own. Once you are on your way, our sherpas will guide you through the assessment, offer and drawdown journey. Ending with your new mortgage

 

1. Apply

Schedule your video call at a time that suits you here.

2. Assess

Our moneysherpa mortgage team will then run the numbers and help you pick the best deal.

3. Offer

We will then handle the full application for you and if all looks good, we will email you a loan offer.

4. Draw down

If you are happy with your new deal, we get your new mortgage up and running.

You have your new home and mortgage. The lender pays us directly and we can bask in the warm glow of another happy homeowner.

Plus, with our free rate insurance offering we will monitor the market for you and if a deal comes up that will save you money, help you switch again. 

Our sherpa’s are the gift that keeps on giving, why not schedule a free mortgage check up call right now!

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