Your complete guide to mortgages in Ireland
Whether you’re buying your first home, switching your mortgage, or moving home, this guide has everything you need to help you prepare for your mortgage journey.
How mortgages work in Ireland
A mortgage is a loan that you use to buy a property.
Mortgages can last much longer than other personal loans and you can borrow larger sums because they’re secured against the property’s value.
You can get a mortgage on your own, or you can apply for a joint mortgage with someone else.
You’ll need to pay for part of the property yourself; this is known as a deposit.
How much are you allowed to borrow?
Our guide How much you can borrow with a mortgage? breaks down the rules on mortgage lending in Ireland, but the amount you can borrow depends on several things, including your:
How are mortgages paid back?
You’ll repay your mortgage in monthly instalments over a set period. How much you pay back each month depends on:
- How much you borrow
- The term of your mortgage
- The type of mortgage you get
- The interest rate you pay
How much deposit do you need?
The amount you’ll need to fund depends on what type of buyer you are:
- First time buyer: If you’re buying your first property, you’ll need a 10% deposit.
- Second or subsequent buyer: If you’re looking to move home or buy another property, you’ll need a 20% deposit.
- Buy to let investor: If you’re buying an investment property to rent out, you’ll need a 30% deposit.
If you already own a property and your equity has increased, you can use some of this towards your deposit. Find out how mortgage deposits work and get tips to help you save for one.
Types of mortgages in Ireland
Different types of mortgage suit different circumstances, for example, you may be a first time buyer, switcher, or investment buyer.
Repayment and interest-only mortgages
This affects how the loan is paid back and whether you’ll need a separate plan to pay off the mortgage balance.
- Repayment mortgage: Pay the mortgage and interest each month so your balance is zero at the end of the term.
- Interest-only mortgage: Only pay the interest you owe on your mortgage balance each month and pay a lump sum at the end of the term.
Interest-only mortgages are less common and aimed at buy to let property investors.
Our guide, Should you get an interest only mortgage? compares the two mortgage types in more depth.
Interest rate types
Choosing a fixed rate or variable rate mortgage will affect your repayments and whether they’re set for a period of time or changeable. Some lenders offer discounted or capped variable rate mortgages.
What is the standard variable rate?
A standard variable rate is the lender’s variable rate that you’ll switch over to when your fixed rate period ends. It’s usually very expensive, so shop around and switch to a cheaper deal.
Other types of mortgages
This type pays out a cash lump sum once you draw down your home loan. The money can help pay for moving expenses, like legal fees and are popular with first time buyers.
These are discounted mortgages for those with energy efficient homes and a Building Energy Rating (BER) of B3 or better. First time buyers, switchers, movers, and self builders are all eligible.
Buy to let mortgages
These are mortgages for property investors or landlords. Brokers and lenders may offer interest-only or a mixture of repayment and interest-only loan options. These mortgages tend to be more flexible with a lower LTV.
With a self-build mortgage, you draw down the money in stages - for each stage of the build - and only pay interest on the amount you’ve borrowed, rather than the whole loan amount.
Borrowing with a mortgage
Find out how much you can borrow and use our mortgage calculator to get the best rates.
Applying for a mortgage
Find out how to apply for a mortgage and maximise your chance of success.
Approval in Principle
Once you’re ready to apply, obtaining a mortgage Approval in Principle (AIP) is usually the starting point.
This will give you a good indication of what the lender could lend to you, but it isn’t guaranteed.
Our guide: How to get a mortgage Approval in Principle in Ireland explains the process more fully and what to do if you’re not approved.
What happens once you have Approval in Principle?
Once you have your AIP in place, there are several more steps to take before you’ll be ready to move into your new home:
1. Search for a new home
2. Get insurance in place
It can take a while to sort out mortgage protection insurance - which is compulsory, so ideally you should apply for a policy before you’re at the offer stage on a property.
3. Make an offer on a property
Once your offer is accepted on a property, let your lender know. They’ll help you arrange a property valuation and finalise your mortgage details.
Your solicitor will also arrange a structural survey of the property to check for any unseen damage. It’s not too late to pull out of the sale at this stage.
4. Get a letter of offer
You’ll need to provide your lender with any outstanding documentation shown in your AIP so they can then issue you with a formal letter of offer. This is likely to include:
- Six months of bank statements
- Three months of credit card statements
- Three recent payslips
- Stamped employment status report
- Most recent Employment Details Summary
Requirements are different if you’re self employed.
You should review the offer carefully which contains details of things like the mortgage rate, term, total balance, before signing it.
5. Exchange contracts
This is the stage where you pay your deposit and sign and exchange contracts.
You’ll need to buy buildings insurance if you haven’t already. It’s compulsory and you may have to prove you have it before the funds can be released.
6. Release your mortgage funds
Your solicitor will arrange to transfer the remaining balance on the property in exchange for the title deeds.
You can now move into your new home!
How long does it take to get a mortgage?
You can usually get an Approval in Principle (AIP) within 10 working days, but a mortgage offer will take longer, depending on the situation.
If you’re buying a property, it can take several months from when you apply for a mortgage, to completion. Read our guide How to prepare for a mortgage application to ensure the process is as quick and smooth as possible.
Not every mortgage applicant is the same and everyone has unique borrowing needs, so we’ve created some helpful guides to fit different circumstances.
How to switch your mortgage
Why switch your mortgage?
If you’re on a fixed rate mortgage you’ll be moved to the lender’s standard variable rate when the term ends, which is more expensive.
The main reason for remortgaging is to get a better interest rate and save money.
Mortgage switching can help you:
How much could you save?
You could save thousands of euros over the duration of your loan if you switch to a cheaper mortgage.
Savings made by homeowners switching their mortgage have doubled in the past six months to an average of up to €7,000 according to the latest doddl.ie Mortgage Switching Index.
You’ll have to pay legal and valuation fees, but choosing a cashback deal or similar could offset those costs.
To work out how much you’ll save take these steps:
- Compare mortgages and look for the lowest interest rates
- Note monthly repayments and total savings
- Find out the legal and valuation costs, plus any other fees to pay
- Deduct any charges or fees from the saving you’ll make over the term
What does it cost to remortgage?
Fees vary depending on the lender and solicitor you use. If you stay with the same lender costs will be lower, but savings may be smaller.
Several Irish lenders offer cashback as an incentive to switch, which in many cases, could help cover legal costs and any extra fees.
An Early Repayment Charge (ERC) may be applied if you end your fixed-rate term early, so if you are still within your term check any early exit charges with your lender.
What happens when you switch?
Once you’ve chosen the right deal, you can apply to the lender for a mortgage Approval in Principle (AIP).
If your application is approved, you can progress to a formal offer letter by producing any ID and documents the lender requires e.g. bank statements and payslips.
You’ll need to appoint a solicitor for the legal work and ensure you have mortgage protection insurance and buildings insurance.
Once everything is in place, your solicitor will arrange for a funds transfer between lenders and ensure your new mortgage is ready to draw down. Remortgaging can take between four and twelve weeks.
Switching your mortgage to a better interest rate could save you thousands of euro.
Other mortgage matters
Here’s more about some of the other things you may need to consider like insurance, using a mortgage broker and remortgaging.
What insurance do you need?
Certain types of insurance are compulsory with a mortgage like
There are other insurances that are worth considering too as they can offer additional protection to you or your biggest financial asset.
Check out our guide What insurance do you need with your mortgage? to help you decide what you need.
Do you need a mortgage broker?
No, you don’t have to use a mortgage broker (mortgage credit intermediary) but a broker can be really helpful when you are starting out on your mortgage journey.
In circumstances where it’s harder to get a mortgage, for example, if you have poor credit a broker can find specialist mortgage lenders that are more willing to lend.
A mortgage broker can access the mortgage market for you, but you can use our mortgage search to compare them yourself. Our mortgage guides have useful tips and advice to help you find the right mortgage.
What help can first time buyers get?
There are some government schemes available that could help to reduce costs for first time buyers.
Are you moving home?
If you are moving and plan to remortgage your property, you’ll need to decide whether to stay with your current lender or switch to a new one.
Keeping your current lender could mean avoiding additional checks or fees but you could miss out on a lower interest rate.
Compare mortgage rates & deals
Find a range of first time buyer and home mover mortgage deals in Ireland using our comparison.
Popular mortgage questions
Can I get a mortgage without the minimum deposit?
It’s likely that you’ll need some sort of deposit but you may not need the full minimum deposit, if you meet all the other lending criteria.
The Central Bank allocates a percentage of mortgages that can have a deposit lower than the minimum, at the lender’s discretion. The allocation is for the year, and once it’s been used up, no further exceptions can be made.
Find out more about these guidelines and exceptions in our guide: How much can you borrow with a mortgage?
How do I qualify for a mortgage exemption in Ireland?
The Irish Central Bank’s lending rules limit the amount you can borrow. E.g. First time buyers borrowing over 4x their income, or more than 90% of the value of the home.
Each year, mortgage providers can lend a certain amount above the limits. This is known as a mortgage exemption.
As of January 2023, 15% of first time buyer and second time buyer lending is exempt from the limits, and 10% of buy-to-let lending.
Here’s some steps that may help you apply for an exemption.
- Apply early in the year: applying earlier in the year means it’s less likely the lender will have filled their 15% quota.
- Prove you can afford it: show you can comfortably afford to repay your mortgage. Lenders will look at things like repayment capacity, net disposable income, and your ability to comfortably repay with interest rate rises.
- Check your credit record: ensure you have a clean spending history with no gambling or credit card debt, and show you have been saving regularly.
Can I get tax relief on my mortgage?
Mortgage interest relief ended on 1 January 2021. It was a tax relief based on the mortgage interest that you paid on your home in a tax year. Mortgages taken out after 2012 don’t qualify for mortgage relief.
The Help to Buy Scheme gives a refund of the income tax and Deposit Interest Retention Tax (DIRT) you have paid in Ireland over the previous 4 tax years.
Do I qualify for a public sector mortgage?
Several brokers in Ireland offer mortgages for public sector workers. You’re a public sector employee in Ireland if you work in the civil service, or public healthcare, social care, education or law enforcement.
To qualify for a public sector mortgage only one spouse must work in the public sector to be eligible.
You can be a first time buyer, switcher or buy to let investor, but the property must be in Ireland.
As with all mortgages, you must pass affordability checks and have a good credit history.
Should I overpay my mortgage?
Overpaying your mortgage will reduce the term and the total interest you pay. However, your mortgage type affects how much you can overpay and when.
If you’re on a variable rate mortgage, overpaying is flexible, so you can overpay as and when you like. With a fixed rate deal, you’re often restricted to overpaying 10% of your balance a year penalty-free.
If you are planning to remortgage, an overpayment could positively affect the deals you can switch to because it will reduce your loan to value (LTV).
To learn more about overpaying, read Should you overpay your mortgage?