How much deposit you’ll need for a mortgage in Ireland
Before you can get a mortgage to buy a home in Ireland you’ll need a deposit. Here’s how they work and how much you’ll need to save.
What is a mortgage deposit?
It’s the cash you pay upfront when buying a house. The money pays for your property alongside a mortgage.
All lenders require a mortgage deposit when you buy a residential property in Ireland. It protects mortgage lenders if you fall behind on your repayments, and reduces their risk of lending.
The larger your deposit, the less you have to borrow to cover the cost of your home and a low loan to value (LTV) can often help you secure the most competitive interest rates.
How much deposit do you need for a mortgage?
It’s a proportion of the house value, so the deposit amount will depend on the price of the property you want to buy.
You’ll need a deposit of at least:
The size of your deposit and LTV will also affect the deals for which you’re eligible. A small deposit may restrict how many choices you have when you look for a mortgage.
With a larger deposit, a mortgage is more affordable. You can access the cheapest mortgage rates on the market and get the best deals.
In October 2022, the mortgage lending rules changed. First-time buyers can now borrow four times their income, and second-time buyers now need a deposit of 10%.
What does LTV mean?
LTV stands for loan to value, which means how the loan’s size compares to the property’s overall value. So if the house you want to buy costs €300,000 and you need to borrow €250,000, you’ll have an LTV of 83%.
Most mortgage lenders design their deals based on loan-to-value (LTV), and products are priced by LTV bands.
So, for instance you may see different interest rates for LTVs of 60%, 80% and 90%.
The greater your LTV, the higher the interest rate and your monthly repayments become more expensive.
With an LTV of less than 60%, you’ll likely have the best choice of mortgage deals and the lowest interest rates.
Example of LTV
Here’s an example of how your deposit affects your LTV and the interest rate you’re offered. You need to move to a bigger property and plan to buy a house that costs €350,000. Your deposit is €75,000 (21% of the house value).
The size of your deposit means you need to borrow €275,000, so you’ll qualify for mortgage products that require an LTV of 80%.
How to save for a mortgage deposit faster
It can take a little while to save up enough money for a deposit to buy your first home.
It’s worth setting a goal and creating a plan to achieve it. Start by reviewing your income and expenses to determine how much you can afford to save each month.
While there is no ‘best way’ to save up for a mortgage deposit, here’s a few things you can do to speed things up:
- Downsize or move in with friends or family to save money on rent
- Switch your utility suppliers like energy or broadband to reduce bills
- Set up a standing order each month so you save automatically
- Reduce your credit card debt more quickly with a balance transfer
- Check your savings accounts to ensure you’re earning the best interest
- Make small changes to your spending habits e.g. fewer takeaway coffees, less fast food
How long does it take to save for a deposit in Ireland?
Switcher.ie’s Affordability Index reveals the most affordable areas for joint buyers and sole buyers based on how long it would take to save for a deposit in each RPPI region.
- The average time it could take to save for a deposit in Ireland is 4.7 years
- Longford is the most affordable place for first time buyers, taking a couple 1.7 years to save for a deposit
- Dún Laoghaire is the least affordable place and could take a couple up to 21.4 years to save a deposit
Help with your mortgage deposit
Saving a mortgage deposit can take a long time, but there are some ways to get help towards the cost.
First Home Scheme (FHS)
This is a new government-backed scheme to help first-time buyers get on the property ladder.
The FHS is designed to make up any shortfall between the house price and what you can afford to pay with a deposit and mortgage.
It’s a shared equity scheme that pays up to 30% of your house price in return for a stake in your property. You can buy back the share if you can afford to, but you’re under no obligation to do so.
You can learn more about the scheme in our guide The First Home Scheme explained.
Help to buy (HTB)
If you’re a first-time buyer purchasing a new build home in Ireland, you could qualify for the Help to Buy incentive.
The scheme ordinarily offers a tax rebate worth up to 5% of the purchase price of your property.
However, the value of the scheme has been increased to a maximum of €30,000 or 10% of the purchase price of the property, whichever is the lesser, until 31 December 2029.
You can find out more about the Help to Buy incentive and how to apply on the Citizens Information website.
Help from your family
Many borrowers in Ireland get financial help from their parents or other family members to buy their first home.
If you’re getting money from a family member towards your deposit you’ll also need a letter confirming it’s a gift from the person giving you the money. This letter should be signed and include:
- How much money is being given
- The name of the person giving the gift
- A statement that you don’t need to pay back any of the money
- A statement that the person giving the gift will have no claim on the property
It’s also worth checking if there are any tax implications, as large gifts could potentially fall within the scope of gifts and inheritance tax.
Saving accounts for your mortgage deposit
Some banks offer savings accounts with a special interest rate for mortgage customers.
For example, Bank of Ireland’s MortgageSaver Account offers a €2,000 Bonus Interest on savings when you draw down a Bank of Ireland mortgage.
You could also consider a fixed-term savings account, which offers higher rates on a lump sum for a set period, although access to funds may be more restricted.
Are there any alternatives?
Ireland has some of the lowest savings rates in Europe, but you don’t have to save with your lender or bank, and shopping around can help you earn the best interest rate possible.
As well as saving with traditional banks, you can also consider other options:
- Raisin Bank gives access to higher rate savings accounts from banks across Europe
- Digital banks like Bunq, N26 and Revolut offer competitive savings rates
- Zurich offers a Mortgage saver plan
Whether you need the flexibility to withdraw funds or are happy to lock away for savings for a set period, compare account types and savings rates, and pick the one that best fits your financial circumstances and needs.
Next steps
Once you have your deposit saved and you know how much you can borrow, you can start comparing mortgage deals and make preparations for your mortgage application.
Read our Complete Guide to Mortgages to learn more about the housebuying and mortgage process, plus how to boost your chances of mortgage approval.
When do you have to pay the deposit?
You usually need to transfer the deposit funds shortly after signing your contracts. At this point you’ve legally agreed to buy the property and are in the process of completing the purchase.
Compare mortgage rates & deals
Find a range of first time buyer and home mover mortgage deals in Ireland using our comparison.
Mortgage deposit FAQs
Can I get a loan for my deposit?
No, the funds being used as a deposit for a mortgage application in Ireland cannot be borrowed.
All lenders in Ireland check the Central Credit Register as part of the application process, which includes all the details of all personal mortgage, overdrafts, loans, and credit cards, so if you’ve taken out a loan to use for your deposit, they’ll decline your application.
Can I get a mortgage with no deposit?
No, you can’t get a mortgage in Ireland without putting down a deposit.
Central Bank rules require both first time buyers and non-first-time home buyers to have a minimum 10% deposit.
Lenders can make exemptions to these deposit requirements, but there is a limit to the number of exemptions they’re allowed to make so they’re not very common.
If you qualify, the Help to Buy scheme could also help towards your deposit if you’re buying your first home.
- In the original Help to Buy scheme: (house bought between 1st Jan 2017 and 22nd of July 2022) the rebate it offers is equivalent to 5% of the purchase price, effectively reducing the amount you need for a deposit to just 5%.
- In the Enhanced Help to Buy Scheme: (for houses bought between 23rd July 2020 and 31st of December 2029) the rebate is equivalent to 10% of the purchases price.
Can I use a gift for a mortgage deposit?
Yes, you can usually use a gift from friends or family towards your deposit, but there are some rules that you’ll need to be aware of.
Many lenders ask for a gift letter if your deposit funds have been gifted to you, you can download a template gift letter from the AIB website.
What’s the best account to use for my mortgage deposit?
It’s a good idea to use a separate savings account while you’re saving for a mortgage, as this can help you earn the best interest rate possible and keep track on how much you have saved.
When it comes to transferring your funds to your solicitor you may need to move it to your current account first.
