A cautious twenty per cent down?
Hell no.
The Central Bank will offer some relief for first-time buyers under revised rules on mortgage lending. Prospective home-buyers will have to save bigger deposits under the regulations. Banks will only be able to lend up to a maximum of 80% of a property’s value for most owner-occupiers.
However, they will be able to lend up to 90% of the value of the home to first-time buyers up to a limit of €220,000.
This means that first-time buyers will need a 10% deposit for the first €220,000 of their property’s cost and 20% of whatever is above this limit.
For buy-to-let mortgages, the figure is 70%.
90% loans for first-time buyers under new rules (RTÉ)
(Photocall ireland)
Sponsored Link
great if you live down the country, not so great for dublin.
WHAT DO WE WANT?
A PROPERLY REGULATED BANKING SYSTEM!
WHEN DO WE WANT IT?
ah jaysus, we didn’t mean *that*.
The 20% rule should be 25% for buy-to-lets and any ‘professional’ landlords.
€220k though… if the shoebox fits.
the article seems to imply it’s actually 30%, am I wrong about that?
you’re not wrong, it is indeed 30% for buy to lets.
Great stuff, delighted to hear it.
Sorry for the oversight ! :)
never apologise for oversight. overlooking however, that’s unforgivable.
Should be 50% for buy to lets (which it effectively is right now).
Relief? This is entirely against the interests of buyers.
what about those already approved by their banks? signed documents with part deposits paid, does this now affect what they’ve already signed?
No. According to antoin savage on the radio this morning, reading from some paper….. Cold hard facts – i know :)
Harsh. I don’t believe honest and realistic buyers should pay the price for irresponsible borrowers and reckless lenders. A 20% deposit on a Dublin property is a tough amount for an individual to save without a windfall.
Don’t live in Dublin? Its a kip anyway.
Except that this will bring prices down, meaning it’s 20% of less. Sensible move by the Central Bank.
In that RTE article it quotes Central Bank Governor Patrick Honohan
“He also said that about half of the houses being bought by first-time buyers in Dublin are below the figure of €220,000”
Really? Half of the FTB sales were less than 220k? Where are they buying these houses? (Generally curious, as a former Dublin resident)
https://www.propertypriceregister.ie/ and set the date to January 2014 and Dublin. You can’t search by first-time or buy-it-and-set-it or anything, but it gives an idea of the prices being paid.
I did… and averaged it…. 601 properties sold in Dublin in January 2014… average price works out at €300,276 + change
1,541 properties sold in December 2014, average price is €329,049 + change
The above is obviously averaged from all sales. What needs to be known is what does Honohan consider a ‘first time buyer home’….
It’d be lower anyway (without checking for first time buyers) if you look at the half below the median, as opposed to the average price.
apparently those selling with negative equity LTV does not apply – does anyone know if the LTI of 3.5% does?
“90% LTV only for house prices up to €220k” sounds like most FTB housebuyers are getting killed, but when u do the maths on it, a house valued at 440k will still get an 85% LTV mortgage, which is probably a fair compromise between the 80% and 90% camps in terms of actual average house prices.
Bigger issue is for people trading up.
Can someone explain this trading up remark. I’ve heard it in a few places and I’d like some clarity on it.
1. Are we talking about people trading up right now or people trading up in the long run (is there a difference)?
2. When the original measures came out (was it last year alreday?), people complained that FTBs would never be able to get on the ladder, now people complain that up-traders are trapped in their properties. I would have understood that if you are not a FTB then you are most likely someone trading up. How come when people complained about FTB the first time around they didn’t vocalise their concerns about up-traders?
3. In the long run, if someone had a mortgage €220k mortgage (where they only were required to put down €22k becuse of FTB status) and wanted to buy a €440k property (under the false assumption of non property price movements) how long would they have to be paying their mortgage before they had an additional €22k paid off the mortgage and therefore would net €44k when selling their €220k property?
Bigger issue for trader-uppers at a personal level, but less so I suppose for a ‘society’ level (they already have a house, so I suppose we’re more concerned with those that don’t have a house).
To clarify, if I am a first time buyer, and I want to buy a home for 220k, I need only a 10% deposit (22k) and can get a 198k mortgage. Further, if I was a first time buyer, and wanted to buy a 440k house, I could get an 85% LTV mortgage (374k) with only a 15% (66k) deposit.
If I am an existing property owner, and already have a house worth 220k, but with no equity in it (ie mortgage also 220k), and now looking to trade up to a 440k house, the rules would seem to suggest that I’ll need to save a deposit of 20% (ie 88k), as I can only get a mortgage of 352k.
thanks.
from the mirror
Property buyers who already have a mortgage approval will still be able to get the mortgage they were approved for, but if they need to re-apply the new rules will kick in.