IPS Financial Advice has specialist expertise in assisting Irish people living abroad in purchasing their dream home in Ireland. We can provide our dedicated mortgage service completely online without the need to meet at all. You may check out and download our Check list to give you an idea of what is required to apply.
Key questions that most clients have when considering a mortgage are:
- How much can I borrow?
- How much will it cost me? – ongoing and once off expenses, and
- How long will it take to arrange everything?
We will try to answer those questions for you now.
But first let me clarify, these mortgage terms and rates are based on you qualifying to purchase a ‘holiday’ home in Ireland. The mortgages are with leading Irish based banks and are subject to Irish Central Bank directives and guidelines. The banks and IPS Financial Advice (us) are regulated by the Central Bank of Ireland.
How Much Can I Borrow?
There are a number of criteria, or factors that will limit the amount that you can borrow:
- To qualify for these mortgages, you must have evidence of a deposit of 35% of the purchase price having been saved, plus disbursements – stamp duty, valuation, engineer, legals.
- Central Bank rules dictate that a mortgage should not exceed 3.5 times gross single or combined incomes, this may be further limited if you have other financial commitments such as loan repayments, maintenance payments or indeed children or other financial dependents.
- The minimum mortgage approval for this is €175,000 so you would require a deposit of €95k, allowing for a property purchase of €270k.
- A key determinant for loan approval is a proven ability to actually save the amount of money that you will need to repay the loan, and this is stress tested for both exchange rate deterioration and interest rate rises. If you are consistently saving €X per month, divide that figure (X) by €8 and that is an indicator of the repayment capacity calculator per €1000 borrowed.
As with all these rules, there are exceptions, so please do talk to us about your individual circumstance.
Exchange Rates vary, but guide rates are US$ 1.0555, £stg.0.84998 and UAE Dirham 3.8835.
So simply put, if your salary is US€8,000 per month, this equates to $96k pa. Your loan repayment capacity would be €336,000, so you need to demonstrate savings of €2,688 per month consistently.
To borrow that full amount of €336,000 (65%) would require a deposit of €181,000 allowing a house purchase of €517,000.
How Much Will It Cost Me?
The interest rate on these holiday home loans is 3.3% which matches KBC, AIB, Haven and Pepper variable Loan-to-Value rates and is below BOI at 4.2% and PTSB at 3.9% and below all market standard variable rates.
Although stress tested at a repayment rate per €1000 borrowed at €8 per month, the actual repayment will depend on the term of the loan.
In all cases, we get approval for a maximum term loan. The maximum term loan is 25 years to a maximum age 65 years.
Using our previous example for a loan amount of €336,000:
Amount of Loan Term Cost Per €1000 borrowed Monthly Repayment
25 years €4.90 €1,646
20 years €5.70 €1,915
15 years €7.05 €2,369
In all cases, we will require house insurance and life assurance.
As a general guideline, these very roughly approximate 0.015% per month of the value insured, so for a healthy person borrowing €336k, the life insurance will be about €50pcm, and the house insurance about €60 per month.
The once off costs will include Stamp Duty (1% of first €1m, then 2% thereafter), Valuation fee €127, engineer’s costs (optional but €3-5k) and legal fees (€2K+).
How Long Will It Take to Arrange Everything?
2 weeks for you to gather the information required and to complete the application form.
2 weeks for us to get approval in principle
How long for you to choose a home?
If you would like to find out what you can save, just call our Mortgage Department, Aisling, Philomena or Vicky on 061 513076 or email firstname.lastname@example.org