While there is a wide variation in circumstances surrounding a mortgage application, certain basic credit points are common to most successful applications in Ireland.
Central Bank of Ireland Macroprudential Lending Rules
The Central Bank enforces key macroprudential limits across all Irish mortgage lenders:
1. Loan-to-Income (LTI) Limits
- First-Time Buyers (FTB): Maximum borrowing limit of 4× gross annual income.
- Second & Subsequent Buyers (Movers): Maximum borrowing limit of 3.5× gross annual income.
- Lender Exceptions: Lenders are permitted to issue a limited quota of exceptions above these income limits each calendar year.
2. Loan-to-Value (LTV) Limits
- First-Time Buyers: Maximum 90% LTV (minimum 10% deposit required).
- Movers & Switchers: Maximum 80% LTV (minimum 20% deposit required).
- Buy-to-Let Investors: Maximum 70% LTV (minimum 30% deposit required).
Demonstrating Repayment Capacity
Lenders require empirical proof that you can comfortably service the monthly mortgage repayment over a 6-month period prior to application:
- Consistent monthly savings: Regular transfers into a dedicated savings account.
- On-time rent payments: Documented bank transfers verifying uninterrupted rent history.
- Debt clearance: Clearing existing personal loans, car finance, or credit card balances.
- Stress testing: Demonstrating capability to afford repayments if interest rates rise by 2 percentage points.
Employment & Credit Verification
- Employment Status: Minimum 6-12 months continuous employment with current employer (out of probation), or 2+ years of audited accounts for self-employed applicants.
- Central Credit Register (CCR): Clean credit report without late payments, defaults, or missed loan installments over the past 5 years.
