Mortgages & property2 min read
How much can you borrow? Ireland's mortgage rules explained
Two Central Bank rules set the most you can borrow: one based on your income, one on the price of the home. Here is how they work together.
By Irish Fintax
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Before a lender looks at your bank statements, two Central Bank rules have already put a ceiling on what you can borrow: one based on your income, and one based on the price of the home.
Loan to income
First-time buyers can usually borrow up to 4 times their gross annual income. Second and subsequent buyers can borrow up to 3.5 times. For a couple, it is your combined income.
Loan to value
The second rule caps the loan as a share of the price. If you are buying a home to live in, you can borrow up to 90% of the price, so your deposit is at least 10%. For a buy-to-let the limit is 70%, so the deposit is at least 30%.
A worked example
A couple buying their first home earn €90,000 between them.
| Rule | What it allows |
|---|---|
| 4 times their income | A loan of up to €360,000 |
| 90% of the price | A €360,000 loan needs a price of at least €400,000 |
| Deposit at that price | €40,000 |
If they buy a home for €350,000 instead, the 90% rule limits the loan to €315,000 and their deposit is €35,000.
Lenders can make exceptions to both limits for a limited share of their lending each year. Most also set a maximum term of around 35 years, with the loan repaid by about age 70.
Fixed or variable?
- Fixed rates stay the same for an agreed period, such as 3 or 5 years, so your repayments are predictable.
- Variable rates can move up or down at any time, but usually let you overpay or switch without a penalty.
- When a fixed period ends, the loan moves to the lender's variable rate unless you choose a new fixed rate, so that is a good moment to compare again.
Compare repayments across Irish lenders, including cashback and the rate after the fixed period, in the mortgage calculator.
General information only, not financial, tax or legal advice. Rates and rules change and your own situation matters, so check with Revenue or a qualified, regulated adviser before acting on a big decision.
Reviewed by Arif Bhuiyan, FCA, ACA, MBA, MSc, and a group of Ireland-based finance professionals who want to make financial literacy easier for people in Ireland.
