Help to buy a home in 2024
Irelands buoyant labour market has meant that rising interest rates have not dampened demand for mortgages. A record 30,000 First Time Buyers received mortgage approval in 2023.
First time buyers make up the largest portion of the mortgage market and demand from this segment continues to outstrip supply particularly in the new homes market where Government supports such as the help to buy and first home scheme are focused.
Challenge remains the supply of affordable homes. Stats from last year showed that the median –
- age of a first time buyer is now 35 years (in 2004 60% of first time buyers were under 30 years)
- income is €82,000
- mortgage amount €295,000.
For anyone looking to purchase a home in 2024 our top tip is – PLANNING IS KEY.
Here’s where to start –
- Understand mortgage eligibility and rates – not all lenders are the same, infact, there is a significant difference between mortgage levels achievable and also rates in the Irish market.
There are currently 9 lenders in the Irish market with the launch of new lender MoCo.
A big mistake mortgage applicants make is going to one bank only.
- What a bank wants to see when you make a mortgage application –
- Income – sustainable income from permanent employment (or long term contract) or min 2 years self employed
- Deposit – min 10% for all purchasers – banks will look at source of same, savings, gift, help to buy etc.
- Evidence of repayment capacity – proving that you can afford the proposed mortgage – not showing clear evidence of repayment capacity is the most common reason an application will be deferred or declined
- If you are a first time buyer then you need to understand state support schemes available to you.
These apply to new build homes only.
- Help to buy scheme – rebate of the tax you have paid in Ireland over the last four years up to 10% of the purchase price of a new home, capped at €30,000
- First Home Scheme – equity stake of up to 30% taken in your home and contribution by the scheme of equivalent percentage towards purchase – see All you need to know about the first home scheme.
Also, if you are purchasing a new build property or a home with BER of B3 or above Green rates re the lowest rates on the market and you will be eligible for same starting from 3.65% Read more on Green rates.
- Broaden your search beyond new builds – new builds tend to be very popular with first time buyers as the two Government supports are focused on the new homes market. However more second hand homes are mortgaged every year than new homes.
Much of the stock of second hand homes that come to market requires renovation and this can be off putting for first time buyers who in some cases struggle to accumulate the min 10% deposit required to purchase. It is important to be aware that you can finance refurb works as part of your mortgage approval provided you are eligible for the level required to complete the works and provided the completed works add requisite value to your home. Read more on how to finance works to a second hand home.
- Do your research or get market based advice from a broker to ensure you get the best mortgage rate you can achieve
Not only advice for home purchasers but also those with an existing mortgage.
Rates have increased and the gap between the highest and lowest rate on the market has never been as high, it is now 3.3%, the lowest rate is 3.65%, the highest over 7%.
If you choose the wrong rate you will pay needless interest.
The figures are significant – on a €300,k mortgage the difference between the lowest and highest rate is a figure of €7,000 per annum more than you would be paying just because of the higher interest rate.
Take your time, do your research or get market based advice from our team at doddl.
Need any help or guidance be sure to let us know, we assist first home mortgage applicants at all stages from planning right through to when you get your keys. Need advice, just ask that’s what we are here for – Get Started