First-time buyers in Ireland

The 4× rule is a ceiling, not a target

For standard first-time-buyer lending, the Central Bank's LTI limit is 4 times gross income. A proportion of lending can exceed the standard limit, but that does not mean a buyer is entitled to the maximum.

Deposit

First-time buyers generally need a minimum 10% deposit under the standard LTV limit. On a €350,000 home, that is €35,000. You also need to budget for buying and moving costs, so the cash target should normally be higher than the deposit alone.

Buying costs

Possible costs include stamp duty, solicitor/conveyancing fees, valuation, survey, mortgage protection and home insurance, moving costs and any immediate work the property needs. Stamp duty on residential property is currently 1% up to €1m, 2% on the portion above €1m up to €1.5m, and 6% above €1.5m.

Affordability after the purchase

Don't judge the property only by the mortgage approval. Allow for property tax, insurance, maintenance, utilities and the rest of your normal spending. Stress-test the mortgage at a higher rate before choosing your ceiling.

A simple planning example

Suppose a household earns €80,000 gross and is a first-time buyer. The standard LTI ceiling gives a simple starting point of €320,000. At 10% LTV, a €355,556 property would require roughly €35,556 deposit, but that does not mean the household should spend that much. Existing debts and lender affordability can reduce the mortgage amount.

FAQ