Buying your first home can be an exciting yet stressful time, and it is important to get to know the mortgage schemes that are available for first time buyers in Ireland, especially in the current housing climate.
There are a number of schemes available for those property hunting, including the Help to Buy Scheme, which was extended in Budget 2025, aimed at helping first time buyers either purchase or self-build a new home.
But one question that many of those wanting to get keys to their own home for the first time is: what are the requirements for mortgages for first time buyers in Ireland?
Understanding this is key to making crucial decisions such as where to begin searching for a house, and the types of properties that you will be looking at.
The answer to the question depends on the loan to income ratio – with different loans offered depending on your earnings.
If you have never owned a home or had a mortgage before, or had financial interests in a property, you’ll qualify as a first time buyer.
This is important as first time buyers can borrow up to 4 times their gross earnings. Those who have previously had a mortgage or owned a property i.e., non first time buyers, can borrow 3.5 times their gross annual salary.
While some buyers won’t need to borrow so much – recent trends suggest first time buyers are borrowing an average of 3.37 times of their annual income to get on the ladder, and first-time buyers have recently dominated the mortgage market – making up around 60% of approvals in recent months.
The average amount borrowed has also been increasing, with the average amount standing at just under €320,000.
This is the highest it has been since the height of the Celtic Tiger back in 2007.
With an average age of 36, first time buyers in Ireland are two years older than the UK average, and 2 years older than they were in 2020, highlighting the challenges associated with the housing shortage in the country in the past few years.
One of the main considerations is saving that initial 10% or more to get mortgage approval, and this can be tricky given annual increases in the cost of living.
As always, the quicker you can find a way to get started the better and if you save €3,000 to €4,000 annually over a decade, you might find yourself in a financial position to qualify for a mortgage for your first home, and finally get keys to your own front door.
One piece of advice that is often given to first time buyers is to shop around for their mortgage, and to fully understand their current and future financial situation before making any decisions.
A great way to get started is to use some of the smart technology like mortgage calculators that are out there on free information websites, as well as getting expert advice from mortgage advisors, who can make mortgage approval much easier from the get go.
