The Ultimate Guide to Buying Your First Home in Ireland

Getting a first-time buyer mortgage in Ireland can feel overwhelming, but with the right guidance, you can secure your dream home with confidence. Whether you’re applying directly to a bank or working with a mortgage adviser, understanding the mortgage process, legal costs, and financial requirements is essential. In this guide, we’ll walk you through every step, from mortgage approval to getting your keys—helping you make informed decisions along the way.

While this guide is designed to help you manage the home-buying process independently, working with a QFA-qualified mortgage adviser from Family Cover can make the journey significantly easier, ensuring that you secure the best mortgage deal available and avoid costly mistakes.

Step 1: How to Secure a First-Time Buyer Mortgage in Ireland

Before you start house-hunting, you need to get mortgage-ready.  It is very uncommon for a First Time Buyer to NOT require a mortgage! Lenders will assess your financial stability based on several key factors:

1.1 Saving for a Deposit

• The minimum deposit required is 10% of the property price for first-time buyers.

• Consider the Help to Buy (HTB) scheme, which allows eligible first-time buyers to claim up to €30,000 toward their deposit.

• Aim to have additional savings beyond your deposit to cover legal fees, stamp duty, and potential furnishing costs.

1.2 Demonstrating Repayment Capacity / AKA Demonstrated Repayment Ability

Lenders will look at your ability to manage mortgage repayments. This is vital.  All mortgage applications MUST meet this criteria, irrespective of your salary level. The basics of DRA is that you must be able to prove that you could comfortably handle your proposed new monthly repayment for a period of at least 6 months, prior to submitting your mortgage application:

• Regular savings and rent payments demonstrate good financial discipline.  Between rent & savings, this amount must at least match your proposed new monthly mortgage repayment.

• Banks typically require proof that you can afford repayments at a higher rate than current mortgage rates (stress testing).

• Avoid taking out new loans or increasing credit card debt before applying.  If you have existing loans, it is vital that payments have been maintained within the terms of the agreement.

1.3 First-Time Buyer Mortgage Requirements & Lender Rules in Ireland

Applying for a first-time buyer mortgage in Ireland requires an understanding of borrowing limits and lender requirements.  The Central Bank of Ireland has strict rules about how much an individual or couple can borrow:

• For first-time buyers, the maximum loan amount is generally four times your combined annual income.

• Exceptions are possible, with lenders allowed to approve a limited number of applications exceeding this limit. However, these exceptions are not guaranteed and depend on the lender’s risk assessment and your financial profile.

• It is essential to discuss your options with a Family Cover mortgage adviser, who can explore whether an exception may be possible for you.

• The first-time buyer mortgage process in Ireland can vary depending on your income, credit history, and loan-to-value ratio.

1.4 Loan-to-Value (LTV) and First-Time Buyer Mortgage Rates in Ireland

• The loan-to-value (LTV) ratio is the percentage of the property’s price that you are borrowing.

• Borrowing less (e.g., a lower LTV, such as 80% rather than 90%) may qualify you for lower interest rates, as you pose a lower risk to lenders.

• Many lenders now offer green mortgages with lower interest rates if the property meets certain energy efficiency criteria.

1.5 Documents Required for Your Mortgage Application

PAYE Employees:

• Six months’ bank statements

• Three months’ payslips

• P60 or Employment Detail Summary

• Salary certificate from employer

• Proof of deposit and savings history

Self-Employed Individuals:

• Two to three years of audited accounts

• Revenue tax clearance certificate

• Six months’ business and personal bank statements

• Accountant’s reference

The above lists are not definitive.  Additional documents may be required depending on your own circumstances.

Step 2: Getting Mortgage Approval in Ireland

2.1 Securing Approval in Principle (AIP)

• AIP is a conditional mortgage approval from a lender, giving you a budget for house-hunting.

• It is usually valid for 6 months.

• Having an AIP strengthens your position when bidding on a property, as sellers and estate agents see you as a serious buyer.

2.2 Comparing Mortgage Offers

• Different lenders offer varying interest rates and terms, so shopping around is crucial.

• A mortgage adviser from Family Cover can compare all options to find the best fit for you.

Step 3: Finding and Bidding on a Property

3.1 House-Hunting Tips

• Consider location, public transport, schools, and amenities.

• Get a structural survey done if buying a second-hand home.

3.2 Placing an Offer

• Start with a competitive yet reasonable offer.

• Be aware of bidding wars and your budget limit.

• Once your offer is accepted, you will need to pay a booking deposit (refundable until contracts are signed).

Example: Breakdown of a Typical Property Purchase

• House Purchase Price: €400,000

• Booking Deposit (1-2% of price): €5,000 – €8,000 (Paid within a few days of offer acceptance)

• Contract Signing Deposit (Total 10% less Booking Deposit): €40,000 – €8,000 = €32,000

• Stamp Duty:

  • 1% on the first €1 million (€4,000 on a €400,000 property)

  • 2% on the portion between €1 million and €1.5 million

  • 6% on any amount above €1.5 million

• Solicitor Fees: €1,500 – €3,000 + VAT

• Valuation Fee: €150 – €300

• Surveyor’s Fee: €300 – €600

Step 4: The Legal Process & Costs

4.1 Hiring a Solicitor

• You will need a solicitor to handle contracts and legal matters.

• Legal fees range from €1,500 to €3,000 plus VAT.

4.2 Stamp Duty & Legal Costs When Getting a First-Time Buyer Mortgage in Ireland

• Stamp duty is 1% on properties up to €1 million, 2% on the amount between €1 million and €1.5 million, and 6% on any amount above €1.5 million.

• Surveyor’s fee: €300–€600.  You must get a surveyor’s report on your new home if the property was built > 100 years ago.

• Valuation fee: €150–€300.  A valuation report is required for all mortgages.

• Mortgage protection insurance: Required by lenders

• Home insurance: Mandatory before drawdown

Step 5: Mortgage Drawdown & Getting Your Keys

5.1 Signing Contracts

• Your solicitor will review the contracts and ensure all legal checks are completed.

• Once signed, you will be committed to purchasing the property.  Your solicitor will not allow you to sign the contracts until they have a copy of the full loan offer from your lender.  They must ensure that you are financially in a position to complete the purchase.

5.2 Mortgage Drawdown

• Once all conditions are met, your lender will transfer funds to the solicitor.

• Your Family Cover Adviser and your solicitor will ensure that all documents are in place with your lender within sufficient time to make sure your loan cheque issues in time for the closing date.
• The closing date is the date that you and the vendors of the property that you are buying agree to swap money for keys.  This is usually agreed to by the solicitors and is usually 6 to 8 weeks from when you went Sales Agreed.

5.3 Getting Your Keys

• The solicitor transfers the funds to the seller, and you officially become a homeowner!

Final Thoughts

Buying your first home is a milestone, but it comes with complexities that require careful planning. Whether you navigate the process independently or seek expert guidance, being informed is key to making the right decisions.

At Family Cover, our QFA-qualified mortgage advisers can guide you through the entire process, ensuring that you secure the best mortgage and avoid common pitfalls.

Need help? Book a consultation today!