The Help to Buy and First Home Schemes are used by our clients purchasing new build homes to help buy their first home or self build. The First Home Scheme can also be used to purchase a home your landlord is selling under the Tenant Purchase Scheme.
Here are some examples of how the schemes work together in practice and some of the rules that apply –
Total Income: €84,000
Deposit: €40,000
Mortgage Eligibility under standard macro prudential lending rules €336,000 (4x inccome)
Mortgage Eligibility with an exception to standard rules, up to €399,000 (up to 4.75x income)
Purchasing Power:
- Second hand home = €400,000
Restricted by deposit as you must have a 10% deposit.In this case mortgage would be €360,000, deposit €40,000.
- New Build Home using the Help to Buy = €470,000
You can use an exception with the help to buy €399,000 + €40,000+€30,000 help to buy if eligible for full rebate.
- New Build using both the help to buy & first home schemes = €480,000.
No exceptions to mortgage rules as you must stick within standard rules when availing of the first home scheme. Mortgage €336,000 + €40,000 deposit + €30,000 help to buy + €74,000 from the first home scheme = €480,000.
Note min loan to value for the help to buy to apply is 70% so keeping to this level in the example above (€366,000/€480,000).
Another example:
CSO figures show that the average income in Ireland is €44,202.
A Couple with a household income of €88,404, subject to affordability and credit policy, can look to borrow up to –
Standard mortgage level €353,616
Mortgage exception up to €419,919
Assuming deposit is €30,000 then –
Max second hand purchase price restricted to €300,000 as 10% deposit €30,000 and mortgage then would be €270,000.
Second hand home – if deposit wasn’t restricted then €414,919 max lend would mean purchase price at min 90% loan to value = €467,000. Deposit required €46,700.
New build figure of €480,000 assumes eligibility for max help to buy €30k.
Help to buy is a rebate of the tax you have paid over the last 4 years. Mortgage exception €419,919 + deposit €30,k + help to buy €30,k = round up to €480k
New Build using help to buy & first home scheme –
Including the first home scheme could bring closer to €500,000 (subject to location as ceiling caps apply) but loan to value needs to be minimum 70% for the help to buy to apply.
Note you cannot avail of a mortgage exception if utilising the first home scheme.
The rules may seem confusing but that’s why we are here to help. Supply of affordable homes is a constant challenge for our home buying clients.
The above figures are illustrative only and do not constitute advice or an offer. Ceiling prices exist for the first home scheme based on location.
Understanding options open to you is important – our team can help set out your purchasing power based on the schemes and you personal circumstances – Start Here!
Read more about the schemes here – Schemes to support homebuying
How to Apply for the Help to Buy Scheme – How to Apply?
Everything you need to know about the first home scheme – Find out Here!
