A Guide to Understanding Mortgages in Ireland

by | Jun 18, 2024 | Mortgages, Back to Blog

Are you taking that first step onto the property ladder in Ireland?

The dream of owning your home is exciting although the challenge of getting the right mortgage can feel overwhelming. With various interest rates, repayment structures, and lender options, choosing the right mortgage can feel like deciphering a complex code. The good news is, that by understanding the different types of mortgages available in Ireland, you can then explore the best path towards securing your dream home with the perfect financial fit for you.

Mortgage Ireland Sign Hanging Beside White Miniature Advice First Financial House

General Mortgage Types

Are you feeling overwhelmed by the range of mortgage options available? Don’t worry guys! At Advice First, we’re here to break it down for you, Donegal-style. Let’s dive into the world of mortgages, Donegal-style.

Fixed-Rate Mortgages

Imagine it’s like choosing your favourite Irish or Donegal whiskey – you know exactly what you’re getting, maybe a Crolly or a Silkie. A fixed-rate mortgage ensures stability and predictability by keeping your interest rate constant for a predetermined period of time. But remember, while you’re protected from rate rises, you might miss out if rates drop.

Variable-Rate Mortgages

With a variable-rate mortgage, your interest rate can go up or down, depending on market conditions. It’s like riding the waves of the Wild Atlantic up at Ballywhoriskey – exciting, but unpredictable.

Tracker Mortgages

Picture yourself on a treasure hunt, tracking the best rates in the market. Tracker mortgages follow the ECB European Central Bank rate, with the intention of giving you a fair deal. Just keep an eye out for any sneaky clauses!
Note: Tracker Mortgages are not available in Ireland anymore for new mortgages.

Are You a First-Time Buyer? Here are some Tips!

Are you dreaming of owning your first home in beautiful Donegal? Let’s make those dreams a reality with some insider tips!

Saving for a Deposit

Saving up for a deposit is like planting seeds in your own little patch of Donegal soil – it takes time and patience, but the rewards are worth it. Use our handy savings calculator to keep track of your progress and watch your pot of gold grow!

Help to Buy (HTB) Ireland

Some luck could be on your side with Help to Buy (HTB) Ireland. This current government scheme offers first-time buyers a helping hand by providing a tax rebate of up to €30,000.
Terms and conditions do apply, so seek some independent advice. Ask us about it.

Sample Timeline

Taking on your first-time buyer journey is like traveling & exploring the Wild Atlantic Way – exciting but full of twists and turns. Call us for an estimate of your likely timeline to get a sense of what to expect along the way. From saving for a deposit to getting the keys to your new home, we’ve got you covered every step of the way.

Our Mortgage Offers in Ireland

First Time Buyers

Are you dipping your toes into the property market for the first time? Congratulations! Being a first-time buyer comes with some exciting perks. From cash back incentives to special rates, lenders like Haven Mortgages, AIB, BOI, and PTSB offer attractive offers to make your first purchase a little sweeter. Let’s explore how you can make the most of these opportunities.

Self Build Mortgage 

Dreaming of building your own home in beautiful Donegal? With a self-build mortgage, you can turn that dream into a reality. Imagine having the freedom to design and create your perfect space, from the ground up. Lenders like Haven Mortgages, AIB, BOI, and PTSB offer “interest only” self-build options for up to 12 months, giving you the flexibility and financial support you need to bring your vision to life.


Feeling like it’s time for a change? Whether you’re looking to lower your monthly payments, consolidate debt, or fund home improvements, a remortgage could be the solution you’re looking for. By refinancing your existing mortgage, you can release equity in your house, unlocking its full potential and freeing up cash for whatever life throws your way.


Struggling to save for a deposit on your first home? The Help to Buy (HTB) scheme is here to lend a helping hand. This government incentive offers first-time property purchasers a tax rebate of up to €30,000, making it easier than ever to take that first step onto the property ladder. Let’s explore how you can benefit from this game-changing scheme.

Public Sector Mortgages Donegal Diverse Professionals

Are you a proud member of Donegal’s diverse public sector? From teachers to healthcare workers, the Public Sector Mortgages Ireland program is designed with you in mind. Provided by ICS Mortgages & Finance Ireland, this specialised mortgage product offers exclusive benefits for first-time buyers in the public sector. Let’s discover how you can access these unique advantages and make your homeownership dreams a reality.

Mortgages for An Garda Síochána Donegal

Protecting and serving the community is no small feat, and members of An Garda Síochána deserve a home that reflects their dedication. With mortgages tailored specifically for members of the force, you can access higher loan amounts and favourable terms. Let’s explore how you can secure the home you deserve with a mortgage designed for the guardians of our community.

Mortgages for Teachers

Teachers play a vital role in shaping the future of our nation, and they deserve a home that supports their important work. With mortgages for teachers in Ireland, offered by disruptors like ICS Mortgages, educators can access lending criteria that recognise their unique financial circumstances. Let’s dive into how teachers can benefit from these innovative mortgage solutions.

Senior Equity Release

Retirement is a time to relax and enjoy the results of your efforts. If you’re a homeowner over age 60, senior equity release could provide a welcome source of additional income. By unlocking the equity in your home, you can access funds to supplement your retirement income, fund home improvements, or even fulfil lifelong dreams. Let’s explore together with a short chat how you can make the most of your golden years with senior equity release.

Mortgage Glossary of ‘Terms’

Or words to Demystify Your Home Loan Journey (Donegal Edition)

Feeling overwhelmed by mortgage jargon? Don’t worry! This glossary, drawing from reliable Irish sources, will translate or help you navigate key terms with confidence:

LTV (Loan-to-Value)

The ratio of your loan amount to the property’s value. For example, with a €200,000 house and a €160,000 loan, your LTV is 80%. Higher LTVs often require mortgage protection insurance (Source: Central Bank of Ireland).

APR (Annual Percentage Rate)

The true cost of your loan, including interest and fees, expressed as an annual percentage. Compare APRs across lenders to find the best deal (Source: Irish Financial Services Regulatory Authority).

Exit Fees

Charges levied by your lender if you repay your mortgage early. Yes that is a thing. Check your loan agreement for details (Source: Consumer Financial Protection Bureau).

Fixed-Rate Mortgage

Your interest rate stays the same throughout the loan term, offering predictability in repayments. And it offers peace of mind (Source: Central Bank of Ireland).

Variable-Rate Mortgage

Your interest rate fluctuates based on a benchmark, impacting your monthly payments. This one can be a rollercoaster. (Source: Central Bank of Ireland).

Tracker Mortgage

Your interest rate tracks a benchmark (often the ECB European Central Bank rate) with a fixed margin added (Source: Central Bank of Ireland)..

Green Mortgage

Offers lower interest rates for energy-efficient homes, promoting sustainability (Source: Sustainable Energy Authority of Ireland).

Help to Buy (HTB) Scheme

A government initiative offering first-time buyers a tax rebate on a portion of their purchase price (Source: Revenue Commissioners).

First Home Scheme

Provides first-time buyers with low-deposit mortgages and cashback incentives (Source: Housing Agency).

Living in Rural Ireland

Supports homeownership in designated rural areas through grants and low-deposit mortgages (Source: Department of Rural and Community Development).

Mortgage Stress Test

Ensures borrowers can afford repayments even if interest rates rise by 3% which is the stress figure usually applied (Source: Central Bank of Ireland).

Income Protection

Provides you with income if you’re unable to work due to illness or injury, safeguarding your mortgage payments and your home (Source: Irish Life).

Life Cover

Pays a lump sum to your beneficiaries upon your death, helping them manage outstanding debts like your mortgage (Source: Irish Life).


This glossary is for informational purposes only and does not constitute financial advice. Consult a qualified independent mortgage broker like Advice First Financial for personalised recommendations based on your unique circumstances.


  • Central Bank of Ireland
  • Irish Financial Services Regulatory Authority
  • Consumer Financial Protection Bureau
  • Sustainable Energy Authority of Ireland
  • Housing Agency
  • Department of Rural and Community Development
  • Irish Life
  • Aviva
  • ECB European Central Bank

Bonus Tip: Bookmark this glossary for quick reference throughout your mortgage journey!

I hope this comprehensive, but fairly simple glossary empowers you to understand mortgage terms with more confidence and you can make informed decisions for your Donegal homeownership journey. Feel free to ask if you have any questions! Thats what we are here for.

Remember: A mortgage advisor can help you craft a personalised mortgage options & strategies tailored to your unique circumstances.

Disclaimer: This blog is for informational purposes only and should not be considered financial advice. Please consult with a professional financial advisor before making any Mortgage decisions.

Get Advice

Talk to us now and make an appointment with one of our Letterkenny team of QFAs. We are here to help with your Financial Planning Concerns. Ask us questions on Retirement & Pension, Life Insurance & Protection, Mortgages, and Investment Advice. Get in touch here or give us a call at 074 91 03938.

Financial Services firms in Ireland are regulated by the Central Bank.

For the latest updates and financial news, connect with us on Facebook and LinkedIn.

If you have any other questions on Mortages in Ireland, please get in touch.

Mortgage Ireland FAQ’s

Why Should I Pay for Independent Financial Advice?

There are quite a few options for you to consider when it comes to getting a Mortgage. You want to ensure that you get the one that suits you best personally, not necessarily the cheapest or the one that is easiest to get.

Every mortgage provider has their own terms and conditions, which need to be considered.

Also your personal finances will be different to others, so certain mortgage offers will suit you better than others.

When it comes to completing the paperwork around the applications for a mortgage, your advisor will be able to complete this with or for you, because they do it every day. You might only do it once in a lifetime.

Because they are Indepenent they are there to work in your best interests. Whereas any lender is there to sell their own products exclusively. 

Your Mortgage Advisor is there to look at all your finances, to make sure that you do not over commit to a lender.

What exactly is a mortgage?

A mortgage is simply a long-term loan that’s used to pay for a house.

How do I start the application process?

There are a number of easy ways to begin your application:
Get in touch with a mortgage broker, who will do all the work for you or get in touch with the lenders directly. Obviously, we would recommend the mortgage broker route as they will shop around all the lender and provide you with the best options for you. I would suggest dealing with a fee-based broker though. If the broker is not charging a fee, then they will only deal with lender who pay them a commission, which means you only get options from a select number of lenders rather than the entire market.

Here are some tips on getting mortgage ready

What’s a fixed rate mortgage?

With a fixed rate mortgage, your interest rate and monthly repayments are fixed for a set time as agreed between you and the lender. You can choose the best time frame for you.

Although a fixed rate means your repayments cannot increase for a set period of time, your repayments will not fall during the fixed rate period. As a result, you could miss out on lower interest rates and lower repayments. Fixed rates may cost more over the long run, but they offer peace of mind as you know your repayments will not rise during the fixed rate period.

We would recommend speaking with a mortgage broker though, you can discuss all rate options and they will help you decided whether a variable rate fixed rate is right for you. They will also be able to do market research for you on the best rates available for you.

What’s a variable rate mortgage?

Variable rates offer the most flexibility. They allow you to increase your repayments, use a lump sum to pay off all or part of your mortgage or re-mortgage without having to pay any fixed rate breakage fees.

However, because variable rates can rise and fall, your mortgage repayments can go up or down during the term of your loan.

How much will my repayments be every month?

Your repayments will depend on how much you borrow, the term or length of your mortgage as well as the interest rate that you’re charged. See this handy online Mortgage Calculator for an indication of how much your monthly repayments might be. We would recommend speaking with a mortgage broker though, you can discuss all rate options and they will help you decided whether a variable rate fixed rate is right for you. They will also be able to do market research for you on the best rates available for you.

What’s the minimum amount I can borrow?

The minimum loan amount you can borrow for a mortgage approx. €40,000. The minimum loan amount for a top-up, can also be called a further advance, is €25,000.

What’s the maximum amount I can borrow?

When giving you a mortgage, lenders use different criteria to decide how much they are willing to lend you and they must follow specific Central Bank of Ireland rules when doing this.

The Central Bank of Ireland’s rules apply limits to the amount that lenders in the Irish market can lend to mortgage applicants. These limits apply loan-to-income (LTI) ratios and the loan-to-value (LTV) ratios for both family homes and buy-to-let properties and are in addition to the lenders’ individual credit policies and conditions. For example, a lender may have a limit to the percentage of your take home pay that can be used for mortgage repayments.

How long will my mortgage last for?

Every mortgage has a life span or term. The minimum term would be 5 years and you could also possibly qualify for the maximum term possible which is 35 years. For a family home the maximum term of the mortgage is determined by your age. The maximum to have the loan repaid is age 68 with some lenders and age 70 with others. For Buy to Let mortgages have a maximum term of 25 years.

A shorter term means you’ll pay your mortgage off quicker, but it also means your monthly repayments will be higher. It is good advice to clear your debts, including your mortgage, as quickly as you can, it is also important to have a life and have to money to do all the other things in life that are important. So, striking the right balance is very important.

What documents do I need to make a mortgage application?

You will need certain documents when you apply for a mortgage, and you should keep a copy of anything you give to a lender or broker.

Proof of ID, proof of address and proof of your Personal Public Service Number (PPSN)

Proof of income: latest P60, payslips, certified accounts if self-employed

Evidence of how you manage your money such as current and loan account statements for the last three to 12 months, depending on the lender

Her is Permanent TSB’s full list of documents required here.
Her is AIB’s full list of documents required here.
You can see that the lists are very similar, which is the same with all other lenders.
These lists will not be complete for everybody as they do not take account of your individual circumstances.

What’s a loan-to-value (LTV) ratio?

LTV, or loan-to-value, is all about how much mortgage you have in relation to how much your property is worth. It’s normally a percentage figure that reflects the percentage of your property that is mortgaged, and the amount that is yours (the amount you own is usually called your equity).

For example, if you have a mortgage of €150,000 on a house that’s worth €200,000 you have a loan-to-value of 75% – therefore you have €50,000 as equity.
So, the lenders set LTV limits, which means you need to have a deposit of a certain amount before you can get a mortgage. There are different limits in place depending on what category of buyer you are.

  • First-time buyers need to have at least a 10% deposit
  • Second and subsequent buyers need to have at least a 20% deposit
  • Buy-to-let buyers need to have at least 30% deposit

Lenders have a limited amount of discretion when it comes to these limits and in a calendar, year can make exceptions for:

  • 5% of the value of mortgages for first-time buyers
  • 20% of the value of mortgages to second and subsequent buyers
  • 10% of the value of buy-to-let mortgages

These rules don’t apply to switcher mortgages and housing loans for restructuring mortgages that are in arrears and pre-arrears.

What is the Loan to income limits?

As of Jan 2023 the limit of 4 times your gross annual income applies to applications for a mortgage for a family home. This limit also applies to those in negative equity applying for a mortgage for a new property, but not those borrowing for a buy-to-let property.

Lenders have a certain amount of discretion when it comes to mortgage applications. For first-time buyers, 20% of the value of mortgages a lender approves can be above this limit and for second and subsequent buyers 10% of the value of those mortgages can be above this limit.

How much can you afford to borrow?

When making a mortgage application it can be tempting to apply for the maximum amount possible. However, you need to make sure you will be able to cope with future events such as an increase in interest rates, having children, redundancy or illness.

You can use this budget planner to work out what you can afford to repay each month and make sure to include a regular amount for ‘unforeseen expenses’. You can use our mortgage calculator to see how much your monthly mortgage repayments would be.

If you have other loans or debt, your lender may offer you a lower amount, ask that you pay off these loans or refuse your application.

The shorter the term of your mortgage, the higher your monthly repayments, but you will pay less interest in total. With a longer-term mortgage your monthly repayments will be lower, but you will pay more in interest over the lifetime of the loan.


€200,000 20 years 3% €1,109 €66,206
€200,000 25 years 3% €948 €84,526
€200,000 30 years 3% €843 €103,554
Difference in cost of credit between 20- and 30-year terms €37,348

Even a small difference in interest rates can have a big impact on the overall cost of a mortgage.

€200,000 20 years 3% €1,109 €66,206
€200,000 20 years 2.5% €1,059 €54,353
Difference in cost of credit between interest rates €11,853

When you apply for your mortgage, and over its lifetime, it is important to get the lowest rate possible as it can lead to significant savings.

As well as mortgage repayments there are other costs to consider when it comes to buying a home

What are the other Mortgage fees and charges?

When buying a property, or switching your mortgage, it is not just your regular mortgage repayments you need to think about. There are a number of other costs involved which you should be aware of and ask your lender about. Some of these can be reduced or avoided by shopping around.

They include:

  • Brokers’ fees – some brokers charge a fee to arrange your mortgage or for mortgage advice. This might be a percentage of the mortgage amount or a flat fee. Not all brokers charge a fee so if you are planning to use a broker it is important to ask about this and to shop around. If a broker is not charging a fee, check with them what lenders they advise on. They may only work with lenders who pay them commission and you may not get a full market comparison.
  • Estate agent fees – if you are selling a property and using an estate agent you will have to pay a fee for this service. It is usually between 1% and 2.5% but can also be a flat rate.
  • Solicitor’s fees – to look after the legal aspects of your mortgage a solicitor will charge a flat fee or a percentage of the mortgage amount, typically 1% to 2%. It is worth shopping around a few solicitors.
  • Valuation fee – this is paid to a professional valuer to estimate a property’s market value and is required by the lender as part of your mortgage application. A valuation is valid for a short period of time, typically four months. You will need to get an up-to-date valuation of your property if you want to switch mortgage. Valuation fees typically run between €150 and €185.
  • Structural survey fee – a structural survey is done to find out the condition of a property. If any issues arose during the valuation of the property or it is very old, your lender may insist on a structural survey. Even if your lender does not require it, you may want to get a survey anyway to be sure there are no problems with the building. The amount you will pay can be dependent on the type, age and location of the property. It is not always a requirement for the lender, but it is always recommended to have a structural survey done for your own peace of mind.
  • Stamp duty – this is a tax payable on documents when you transfer ownership of a property. For residential property it is charged at 1% of the property value up to €1 million and 2% for anything above that.
  • Local Property Tax – this tax, collected by Revenue, is charged on all residential properties and came into effect in 2013. It is a self-assessment tax, and you calculate what is due based on your own assessment of the market value of your property. It can be paid in a lump sum or spread out over the year.

You should take the above into account when you are working out how much you will be able to borrow.

What is the stamp duty payable on mortgages?

Stamp duty is payable at 1% on properties up to the value of €1 million euro and 2% on properties over this amount.

What are lenders' normal lending criteria for a mortgage?

Every lender will look at various criteria before deciding whether to approve a mortgage. Some of the main factors that are taken into account are:

  • A good credit history.
  • Being aged 18 or over.
  • Age not greater than 70 at the end of the mortgage term. With some lender this age is 68.
  • Ability to repay – as a guide mortgage repayment on all loans including your mortgage should not exceed 35% of your net income
  • Secure employment.
  • Continuous employment at least 12years.
  • Self-employment for at least 2 years, some lenders require 3 years.
  • Good bank account management

With all lenders the primary focus is on your repayment capacity.

How much of a deposit do I need?

All lenders must follow Central bank deposit rules, which require a 10% deposit for first time buyers. So, if the value of your property is €200,000, you’d need a deposit of €20,000. This deposit can come by way of a gift, or part gifted, if you are lucky enough to have some-one willing and able to help you out. Borrowing for your deposit will not be acceptable to your mortgage lender, no matter where you are borrowing for.

What else should I bear in mind when taking out a mortgage?

You’ll generally need to arrange home insurance and mortgage protection before drawing down your loan.

Home insurance is a property insurance which covers private homes, buildings and contents. The cost of home insurance often depends on what it would cost to rebuild your house and how much it would cost to replace all of the contents of the house. The replace value of your property may be more than the purchase price.

When taking out a mortgage you’ll also need to consider how it’ll be paid off in the unlikely event of your death before the mortgage has been fully repaid. When you get a mortgage to buy your home, you’ll generally be required by your lender to take out mortgage protection. This is a particular type of life assurance taken out for the term of the mortgage and is designed to pay it off on the death of the borrower or joint borrower before the end of the mortgage term.

What is the timeline for the mortgage process?

Wherever you are on your mortgage journey, whether you’re ready to make an application, or just want to ask some questions – we’re here to support you so book an appointment today with our mortgage team!

We’ll outline the mortgage process and the required documents you’ll need for your application and you can then gather and submit the documents required at a time that suits you, allow 1-2 weeks for gathering these documents.

Once the lender receives your application and supporting documentation, they will get back to you in 3 working days to let you know if it’s ready to go to our underwriting team for a full assessment, or if they need any further documents or information from you first.

Once they submit the documents to their underwriting team for full assessment, they will let you know if they can approve your application within 10 working days. In the rare event that they can’t come to a decision in that timeframe, they will be in touch to let you know and to inform you of when they will have a decision.
If you are using a mortgage broker the lenders will communicate this update to them who will in turn communicate with you.

Once your application for credit is approved, (called approval in principle, AIP) and you have found your home, you will be required to arrange for a valuation of your property. A credit check will also be undertaken on all applicants of the mortgage, and you will need to arrange Life Insurance and Home Insurance. Your lender will issue the loan offer to your solicitor and once you sign the documents, your solicitor will arrange the transfer of funds and collection of your keys to your new home.

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