Your Guide to Preparing for a Mortgage in Ireland
Buying a home is one of the most significant financial decisions you’ll make. Whether you're a first-time buyer or have bought before, being mortgage-ready means organising your finances, paperwork, and expectations. This guide outlines the essential steps to get ready for a mortgage in Ireland.
Step 1: Understand What Lenders Look For
Irish lenders assess your mortgage suitability based on several factors:
- Income: Both guaranteed and variable income streams.
- Employment Status: Ideally, you should be in permanent employment and have completed any probationary period. A minimum of six months in continuous employment is recommended.
- Outgoings: Including loans, credit cards, childcare, and other commitments.
- Lifestyle & Living Expenses: Your ability to manage monthly costs while repaying a mortgage.
- Credit History: A clean credit record is essential. You can check your credit report via the Central Credit Register.
Step 2: Know Your Borrowing Limits
Under Central Bank of Ireland rules:
- First-time buyers can borrow up to 4 times their gross annual income.
- Second-time buyers are limited to 3.5 times their income.
- There can be exceptions to both of the above limits, which may be available from different lenders. Talk to your Mortgage Broker if you feel you need a higher amount.
- A minimum deposit of 10% is required for most buyers.
Use tools like Sherry FitzGerald’s mortgage calculator to estimate your borrowing capacity and monthly repayments.
Step 3: Build Your Deposit
Saving for a deposit is one of the biggest challenges. Here’s how to strengthen your position:
- Create a savings plan: Demonstrate consistent savings over at least six months.
- Keep your savings consistent — large, unexplained deposits can slow down the approval process.
- Explore government supports: First-time buyers may be eligible for the Help-to-Buy scheme, which offers a tax rebate of up to €30,000 on new builds and can be used towards your 10% deposit. Additionally, consider other available schemes, such as the First Home Scheme, which helps buyers bridge the gap between their deposit and the price of a new home. There may be other supports available, so it's beneficial to research thoroughly or consult a mortgage advisor to explore all your options.
Step 4: Prepare Your Paperwork
Gather the following documents in advance:
- Recent payslips (usually 3 months).
- Bank statements (6 months) for all bank accounts, both in Ireland and overseas.
- Salary Certificate – Your Broker can provide a template for your Employer to complete.
- Employment Detail Summary for the previous year. If you have a variable income, you will need 3 years of Employment Detail Summaries.
- Proof of savings.
- Photo ID and proof of address.
- Details of any existing loans or credit cards.
- Credit checks for any country outside of Ireland that you hold an account in or have resided in recently (3-5years).
Having these ready will speed up your application and reduce delays.
Step 5: Budget for Additional Costs
Beyond the deposit and mortgage repayments, consider:
- Stamp Duty: 1% up to €1 million; 2% thereafter.
- Legal Fees: Vary by solicitor; budget at least €2,500.
- Valuation & Survey Fees: Typically, €150–€500.
- Insurance: Mortgage protection and home insurance are mandatory.
Step 6: Avoid Common Pitfalls
- Leaving it too late to speak with a mortgage advisor can lead to avoidable delays.
- Not disclosing bad credit history or issues that may arise throughout the process.
- Changing jobs mid-application.
Step 7: Seek Expert Advice
Mortgage advisors, like those at Sherry FitzGerald Mortgages, can:
- Assess your eligibility across multiple lenders.
- Flag potential issues before you apply
- Help you choose the best mortgage product for your needs.
They work for you — not the banks — and can guide you through every stage of the process.
Final Thoughts
Getting mortgage-ready means more than saving money; it’s about demonstrating responsibility and financial stability to lenders. With proper preparation and guidance, you can confidently navigate the home-buying process.
