First Home Scheme Donegal
What is the First Home Scheme (FHS)?
The First Home Scheme Donegal (FHS) was launched as part of the “Housing for all Strategy” announced by the Government in September 2021. The Scheme has been developed in partnership between the State and the the retail banks in Ireland represented by the Banking and Payments Federation Ireland (BPFI), Permanent TSB, AIB, Bank of Ireland, Haven Mortgages, EBS, and Avant Money.
The aim of the Scheme is to bridge the funding gap for eligible first-time buyers & first time self builders between their deposit and mortgage, and the price of the new home (within price ceilings established across the country).
It is what’s known as a shared equity scheme. This means that homebuyers can receive funds from the Scheme in return for the FHS taking a percentage ownership in the property purchased.

Who can avail of the First Home Scheme in Donegal?
The scheme will be available to first-time buyer(s) seeking to purchase a newly built Principle Private Residence (PPR) in a private development anywhere in the country.
From Sept 2023 the scheme was extended to include first time self-builders as well, where the house is their first home.
The Scheme will be available to eligible First Time Buyers, there will be a limited number of exceptions for non-first-time buyers, in accordance with the ‘Fresh Start’ principle announced in ‘Housing for All’.
As of the 17th of April 2023, the scheme is now also available to customers availing of The Tenant Home Purchase Scheme (THPS). The THPS scheme is available to customers currently renting who have been issued a notice of termination from their landlord and they wish to purchase the existing property.
To see if you could qualify for FHS support, use this eligibility calculator.
Who are considered First Time buyers under the scheme?
First Home Scheme Donegal
The following Definition of First Time Buyer is for the purpose of the scheme only. This does not change the First Time Buyer rules the Bank currently have in place for mortgage applicants.
- A person who has not previously purchased or built a dwelling in the state for his or her occupation
- Does not own or is not beneficially entitled to an estate or interest in, any dwelling in the state or elsewhere and,
- Has a right to reside in the state
Not being a first-time buyer shall not render you ineligible as under the below;
Relationship Breakdown:
Where you previously purchased or built a house in Ireland, as your private residence, together with a spouse, a civil partner or a person with whom you were in an intimate and committed relationship, the marriage, civil partnership or relationship concerned has ended, and you are now applying to purchase a dwelling on your own or with a different person, the previous purchase or building of the house concerned shall not render you ineligible for the FHS.
A marriage is deemed to have ended when it is the subject of a decree of judicial separation, divorce or nullity and a civil partnership is deemed to have ended when it is the subject of a decree of dissolution or nullity.
Insolvency:
Where you previously purchased or built a house in Ireland as you private residence but you can demonstrate, in such manner as the State may prescribe, that you have sold, or has been divested of, that dwelling as part of a personal insolvency or bankruptcy arrangement or proceedings or other legal process consequent upon insolvency, then the previous purchase or building of the house concerned shall not render you ineligible for the FHS.
Can future property price changes affect a customer’s Equity Share?
First Home Scheme Donegal
Yes. Property Prices can go up and down. As the equity facility is linked to the market value of the customer’s home, any change in property prices will affect any partial or final redemption amount. If property prices increase/decrease over time, the percentage equity the customer has to redeem will remain the same but the € amount will increase/decrease.
Example of a price increase:
Customer purchases a property for €250,000, availing of €37,500 from the shared equity scheme which equates to 15%.
What interest rate does the First Home Scheme Donegal offer?
There will not be an interest rate applied to The First Home Equity share however, there will be a Service charge that comes into effect after year 5 as per the below table.
Year | Percentage |
0-5 | 0% |
6-15 | 1.75% |
16-29 | 2.15% |
Year 30 onwards | 2.85% |
Will availing of the First Home Scheme in Donegal affect the current amount I am approved for on my AIP with the Bank?
First Home Scheme Donegal
Yes, as The Bank will take into account the service charge that will be applied to the First Home Scheme equity at the start of year 6. So, your affordability will be re-assessed to take into account the service charge applicable to The First Home Scheme and as a result, your approved mortgage amount may change.
Your lender will take into account the service charge that will be applied to the First Home Scheme equity at the start of year 6. The Service charge comes into effect after year 5 with a percentage of 1.75% applicable for years 6-15, 2.15% from years 16-29, and 2.85% from year 30 onwards.
The Service charge will be taken into account on all mortgages where a customer is availing of the scheme and as it is tiered over different terms, the lender will use an average annual service charge rate of 1.7% on the equity share and factor in as monthly repayment over the term of the mortgage.
Can Self-build avail of the First Home Scheme Donegal?
From Sept 2023.
The First Home Scheme (FHS) is open to eligible applicants seeking to build their own home anywhere in the Republic of Ireland. If you have a site, or are purchasing a site, but have insufficient funds to build your home when you combine your deposit and your mortgage, you may be able to bridge the funding gap by availing of the Self-build product subject to meeting the qualifying criteria.
Definition of a Self-build Home
A self-build home is one that is built on a site by the owner(s) of the site either through direct labour (self-managed) or a fixed contractor (construction contract). The home will be the principal private residence of the owner(s)
Self-build House Types
The house you are building can be a detached or semi-detached house. It can be either a single or multi-storey home.
FHS Funding for Self-build Homes
Subject to eligibility criteria, you may qualify for funding of up to 30% of the build cost of your home. The Help to Buy (HTB) scheme is available for self-build homes. If you are availing of the Help to Buy the maximum amount, you may be eligible for from the FHS will be 20% of the build cost.
Self-build Product Eligibility Criteria
There are a number of eligibility criteria to be satisfied, including the following:
- To be eligible for the Self-build product you must:
- be over 18 years of age.
- be a first-time buyer or other eligible homebuyer.
- have Mortgage Approval with a Participating Lender
- borrow the maximum amount available to you from one of the Participating Lenders (up to 4 times your income)
- not be availing of a Macro Prudential Exception (MPE) with a Participating Lender
- have a minimum deposit of 10% of the build cost (equity in your site can contribute to the deposit)
To be eligible for the Self-build Product the property you are building must:
- be in the Republic of Ireland on a site that you own or are purchasing.
- be built as your Principal Private Residence
- be within the local authority property price ceiling for Self-builds.
Who will be providing Equity to Customers under The First Home Scheme?
The scheme will be administered by a nominated third-party operator (TPO) BCM Global, and Homeowners will contract directly with BCM.
BCM will provide you with all information required in relation to the scheme and whether you are eligible or not. You can find out this information on the FHS website www.firsthomescheme.ie
How does the Equity Share work?
First Home Scheme Donegal
The support provided will take the form of a percentage equity share in the home equal to the funding gap between the maximum mortgage available to the customer under the Central Bank rules and the cost of a new home. The customer will be permitted to redeem or ‘buy-out’ this equity stake at any time, but they will not be required to do so unless a trigger event occurs (Property sale, Bereavement, switch to Residential Investment etc.).
Example 1: Home Purchase (private development)
Customer purchases a property for €250,000, availing of €25,000 from the First Home Scheme (FHS) which means the FHS has a 10% FHS equity share in your home.
Sometime in the future you decide to buy out the FHS equity share. The home is now valued at €350,000. As the FHS equity share is unchanged at 10%, you will now need €35,000 plus any accrued service charges payable, to redeem the FHS equity share in the home.
Example 2: Self-build (own site)
Customer owns a site valued at €30,000 and builds a house on that site at a cost of €300,000.
Customer avails of €30,000 from the First Home Scheme (FHS) which means the FHS has a 10% FHS equity share in your house built on the site.
Sometime in the future you decide to buy out the FHS equity share. The property, including both house and original site is now valued at €400,000.
At the time of build, the site value represented 10% of the total value of the home (i.e.€30,000) and this 10% will now be discounted from the current value before calculating the FHS Equity amount to be redeemed (€400,000 less current site value of €40,000, equals €360,000). As the FHS equity share is unchanged at 10%, you will now need €36,000 (10% of €360,000) plus any accrued service charges payable, to redeem the FHS equity share in the home.
Can I pay lump sums off their equity share?
Yes. Up to two separate redemption payments against the equity can be made in any 12-month period. These payments must be at least 5% of the original Equity stake amount provided by the FHS.
Can I avail of the Help to Buy Scheme and First Home Scheme at the same time?
First Home Scheme Donegal
Yes, you can avail of both the First Home Scheme and the Help to Buy scheme to purchase a new home. Where you wish to avail of the Help to Buy Scheme at the same time you can avail of up to 20% from the First Home Scheme as well.
Do I have to have the 10% deposit in all cases?
Yes, you must have their 10% deposit and then can avail of up to 30% from FHS which would reduce your LTV with the Bank to 60%. For second time buyers classed as First-time buyers under the scheme, you must have a 20% deposit under Central Bank rules.
For Self Builds, if you own or are purchasing the site, this can count as your 10% deposit.
Can I avail of an exception from the Bank & also apply for the First Home Scheme?
First Home Scheme Donegal
No, you cannot be approved for more than 4 times Loan to Income (LTI) to avail of the scheme. This is a scheme rule, not a Bank rule to ensure those most in need of funds are being prioritised by the scheme.
If I have been approved for an exception, can I decline it to avail of the scheme?
Yes, you can decline the exception and move back to 4 times Loan to Income (LTI) so that you can still obtain equity from the First home Scheme. Your mortgage amount will decrease by taking this option; however, your First Home Equity stake will increase. You are not required to make monthly capital repayments on the equity stake as they are on their mortgage and as a result this may result in a high lump sum of equity to be paid at the end of the customer’s mortgage rather than if they retained the higher mortgage amount and did not avail of the FHS.
Can I change my mind and not accept equity from the First Home Scheme Donegal?
Yes, you can change your mind at any time. If you wish to purchase a cheaper Home or if you can bridge their funding gap in a different way, then you may not wish to avail of The First Home scheme. In this instance your lender will remove The First Home flag from your application and a new Loan offer will issue.
Can I amend the amount of equity I require from The First Home scheme?
Yes. If you opt to purchase a cheaper Home or if they can bridge their funding gap in a different way, then you may wish to reduce the equity stake they require. Additionally, you may wish to purchase a more expensive house and require a higher equity stake. You can increase their equity stake once the property they are purchasing is within the price caps set out by the First Home Scheme and the equity portion is within the min and max approved for the customer. Where the equity amount changes, The Bank will issue an amended loan offer that the customer will need to share with the 3rd party BCM.
Am I required to use all my savings to ensure that I request the lowest amount of equity from the First Home Scheme?
No, to be eligible for the First Home Scheme you need to have been approved for a max mortgage amount of 4 times Loan to Income and also have your required deposit saved (10% for first time buyers and 20% for fresh start customers).
It is then you choose whether to use additional savings you have towards the purchase of your home or to use it to furnish your property etc. once your required equity is within the minimum and maximum amount approved by the scheme you can decide to utilise a higher First home equity stake or use your savings.
Can I apply for a Top Up on my main mortgage which is flagged as First Home Scheme?
First Home Scheme Donegal
Yes, once you have been given consent to apply for a Top Up by the FHS. If you participate in the FHS you are permitted to apply for a top-up on your mortgage subject to obtaining consent from the FHS and additionally the pertaining criteria and processes of the Participating Lender. This will include top ups to enable a customer to buy-out the FHS Equity Facility.
Can I switch my mortgage from another lender and keep my FHS Equity portion?
Yes, if the new lender is also a member of the scheme.
Switching between mortgage providers is permitted provided the new lender is a Participating Lender in The First Home Scheme. There is no requirement for you to redeem the Equity Facility where you are switching your mortgage to another Participating Lender.
If you want to switch your mortgage to a Non-Participating Lender, you must notify the TPO that they intend to move lender, before they can do this, they need to redeem the equity in full including any accrued Service Charges.
Click If you want to log a complaint in regard to Their Equity portion provided by The First Home Scheme. How do you do this?
First Home Scheme Donegal
You will need to contact the FHS directly. As this is not a regulated product the FHS has its own complaints process which can be outlined to them by the FHS. You do not have the option to refer FHS complaints to the Financial Services and Pensions Ombudsman as part of the FHS complaints process.
The following are the FHS contact points:
- Website – www.firsthomescheme.ie
- Call Centre – 0818 275 662
- Start your application for the First Home Scheme here
Get Advice
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If you have questions or need advice on First Home Scheme Donegal, call 074 9103938 or email now.
WARNING: We strongly recommend that you seek advice from an independent financial adviser and legal adviser if applying for this product.
WARNING: The First Home Scheme is not regulated by the Central Bank of Ireland and the equity product is not governed by the Central Bank and its statutory codes of conduct and/or other regulations to include the Consumer Protection Code. However, this does not affect your rights under consumer law.
WARNING: Property prices can go up and down. As the equity facility is linked to the value of your home, any change in property prices will affect any partial or final redemption amounts. If property prices increase/decrease over time, the percentage equity you have to redeem will remain the same but the € amount will increase/decrease.
First Time Buyers Donegal – FAQ’s
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 for the first home scheme Donegal?
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.
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
Here is Permanent TSB’s full list of documents required.
Here is AIB’s full list of documents required.
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?
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.
Example:
MORTGAGE AMOUNT | TERM | INTEREST RATE | MONTHLY REPAYMENTS | TOTAL COST OF CREDIT |
€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.
MORTGAGE AMOUNT | TERM | INTEREST RATE | MONTHLY REPAYMENTS | TOTAL COST OF CREDIT |
€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 |
Example:
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?
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 a 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 for 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.
Switching Mortgage - FAQs
Can I switch my mortgage?
Yes, is the answer in most cases, but it is the right answer for everyone. So, get advice from unbiases mortgage broker. If
If you decide that switching your mortgage is the right for you, there are different lending criteria for different types of borrowers.
Check here to see which category you fall into:
Switching my mortgage with no additional funds
- Maximum Loan to Value (LTV) of 90%
- Minimum mortgage amount of €40,000
- Minimum term of 5 years
- Maximum term of 35 years
Switching my mortgage and looking to borrow additional funds (via Equity Release):
- Maximum Loan to Value (LTV) of 85%
- Minimum mortgage amount of €40,000
- Minimum term of 5 years
- Maximum term of 35 years
Switching my Buy-to-Let mortgage.
- Maximum Loan to Value (LTV) of 70%
- Minimum mortgage amount of €40,000
- Minimum term of 5 years
- Maximum term of 25 years
Before switching, please make sure to take advice from a mortgage broker to make sure you are getting analysis of the entire marketplace.
There are costs involved in switching your mortgage to a new provided. Some lenders do offer Cashback & Incentives to cover these costs.
Two Reasons why you would consider Switching Your Mortgage.
- Low-Interest Rates
Fixed-rate mortgages are at an all-time low in Ireland, and so the time to switch has never been better. Your mortgage broker will compare the market to find you the best deal based on the outstanding amount owed and the term of your mortgage and provide you with impartial advice on choosing the right mortgage for your home. Make sure the broker you choose is comparing the entire marketplace,
- Release Equity
If you have equity in your home, you could release some of that when switching your mortgage for home improvements or repairs. Alternatively, you could potentially use this opportunity to consolidate other debts into one affordable monthly repayment. Speak to your mortgage broker for advice.
While mortgage switching might not be suitable for everyone (if you have negative equity or impaired credit rating, for example), most homeowners can benefit from switching their mortgage to a new lender. If your current interest rate is more than 3%, there is a good chance that you could save a considerable amount of money, reduce the term of your mortgage, or do both by making the switch.
It’s easy to put things like this on the back-boiler and promise yourself that you’ll do it later, but the earlier you switch, the sooner you’ll start saving money.
Switching mortgage has never been easier, and by employing the services of an unbiased mortgage broker with your best interests at heart, the only thing you’ll have to do is sign on the dotted line to start reaping the rewards of your new mortgage plan.
What fees are involved in switching my mortgage?
As part of the switching process, a valuation of your property will need to be completed. You will also need to appoint a solicitor to take care of the legal work involved. However, the cash back offered by some lenders will go a long way to covering your legal fees!
Before switching, please make sure to take advice from a mortgage broker to make sure you are getting analysis of the entire market-place.
Will I need to pay Stamp Duty?
Property stamp duty is only payable on the purchase of a property and does not apply when switching your mortgage.
What are the timelines for switching?
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), 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, you will have to provide the mortgage protection and house insurance.
A Letter of Approval will then be issued to your solicitor who will your work with your new lender and existing mortgage provider to finalise your switch.
Can I be penalised for switching mortgage provider?
This is a question we get asked to allot. The answer is no, but…
Check is your current rate, if you are on a fixed rate and are looking to switch lender before it’s due to end there may be a break fee to get out the fixed rate. It should be on a sliding scale though.
Other than this you cannot be penalised for looking to switch mortgage provider. This includes anyone who has gotten a ‘cashback mortgage’.
If you received cashback as part of your original mortgage, you do not have to pay any of this money back when switching.
What are the steps involved in switching your mortgage?
Know your current situation.
Find out the following as the lender will need to know
- how much is still owed on your existing mortgage
- the term remaining.
- the interest rate you’re currently paying
You can find all this information on your most recent mortgage statement or by contacting your lender. You’ll also need an estimate of how much your home is currently worth.
With the above info to hand, you can compare mortgage rates to find out who’s offering the best rates and whether it makes financial sense to switch.
You can give us a call to do the comparison for you or this mortgage calculator and comparison service lets you easily compare interest rates, offers and cashback incentives from all of Ireland’s mortgage lenders and will quickly show you what your new monthly repayments would be.
We would recommend using a unbiases Mortgage Broker to do the market research for you. They may charge a fee, but it is worth it.
What are the new Central Bank requirements on mortgage switching?
To make it easier for you to switch your mortgage, the Central Bank has introduced six new measures that lenders have to follow:
- If you have a fixed-rate mortgage, your lender will have to tell you about any cheaper options they have available 60 days before your fixed term is due to end.
- If you have a variable-rate mortgage (other than a tracker) your lender will have to tell you at least once a year if you can switch to a cheaper rate with them based on how much equity is in your home i.e., your loan-to-value ratio.
- Lenders will have to clearly explain the pros and cons of any mortgage incentives such as cashback offers.
- Lenders must give you a comparison of how much your mortgage costs versus other options offered by your lender if you ask for one.
- If requested, lenders must give switchers all the information they need to switch, including how long it will take.
- And when you’re looking to switch your mortgage, lenders must give you a decision within 10 business days of receiving a completed mortgage application.
So, in a nutshell, these changes should make it a whole lot easier for mortgage holders to be able to spot and understand if, and when, they should switch lenders throughout the course of their loan period. And if you do decide to switch, the process should be a little bit easier.
How much could I save by switching?
Big Savings.
Someone who has a mortgage of €150,000 and is paying a 4.5% standard variable rate could save over €180 a month, or over €2,160 a year, by switching to the cheapest rate on the market. And while there are some upfront costs associated with switching mortgage provider, in many cases banks will provide cashback to those who switch or a contribution towards the legal fees.
And while switching may not be an option for everyone or indeed the right advice for everyone, particularly for those who are in negative equity, or on a tracker rate, we’d encourage anyone who’s been with their mortgage provider for a few years to review their options and see whether they could save by switching to a better deal. For more on Switching providers, click here
How can I compare the mortgage rates available?
If you want to check the best rates available to you by switching your mortgage, you can compare interest rates and incentives across all the main lenders in Ireland with this handy Mortgage Calculator. Give it a try: it’s accurate, impartial, and free to use. You can also give us a call.
General Mortgage - FAQ’s
Can I get a mortgage if earning in Sterling?
This is area for confusion for lots of people. Especially for our friends living in or working in Northern Ireland who want to buy a home and live in the Rep. of Ireland. This is very prevalent for people around the border areas of Derry and Tyrone wanting to move to Donegal, where property prices are cheaper.
Firstly, can I stress that Mortgage lending is available to cross border workers, contrary to some information being given.
Whilst lending is available there are a couple of issues for those earning Sterling to be aware of, these apply whether you currently live in the Rep. of Ireland and working in Northern Ireland or the UK or those living in Northern Ireland and wanting to move to Rep. of Ireland
If you earn in Sterling there are 2 main challenges to be aware of, these are
- There are a limited number of lenders willing to lend. Not all lenders are in the market for you.
- The lenders that will lend will allow an exchange rate but will also reduce your Sterling income by 20%. As, in the first instance the amount of lending you qualify for is based on your income, the reduction of 20% does have a major effect on the amount of lending available. Where you have 2 people earning in Sterling this can, in some case, push them out of getting lending all together. Read More
If working aboard, can I get a mortgage in Ireland?
Yes, is the answer, here comes the but.
If you earn in any other currency other than Euro there are 2 main challenges to be aware of, these are
- There are a limited number of lenders willing to lend. Not all lenders are in the market for you.
- The lenders that will lend will allow an exchange rate but will also reduce your income by 20%
As, in the first instance the amount of lending you qualify for is based on your income, the reduction of 20% does have a major effect on the amount of lending available. Where you have 2 people earning in a non-Euro currency it be challenging.
What mortgage service we offer and what fees we charge?
Our Mortgage Service…
Your personal mortgage advisor from Advice First Financial can add significant value to your financial situation. Our mortgage service encompasses much more than form filling! Our extensive knowledge, market comparison technology and established relationships with Ireland’s mortgage lenders means you are in the best hands…
What we offer you………..Initial Discovery Meeting
- To learn about you, your requirements and financial needs
- To clearly explain the mortgage criteria applicable to you
- To reassure you by breakdown of any confusing jargon
Initial Research
Market analysis of the mortgage products available to identify a shortlist
of potential mortgage providers based on your priorities. We look at……
- Interest Rates
- Borrowing Amount
- Cash Back Offers
- The Process
- Discuss Any Challenges
- Discuss Any Challenges
- Total Costs
- Help to Buy Scheme
Application Support
- Assisting you to complete your mortgage application
- Preparing your application for approval
- Identifying, discuss & help overcome potential reasons for decline
Application Management
- Submitting your application, confirming receipt by lender
- 72hr application follow up with lender
- Dealing with any issues as they arise
Detailed Selection
- Discuss mortgage approval/terms of conditions
- Presentation of approval and up dated quotes for your selected Mortgage
- Dealing with any issues as they arise
Application Proceeding
- Help you get the property valuation completed
- Follow up to ensure all paperwork is submitted to the lender for formal approval
- Review of formal approval to ensure accuracy
- Co-ordination of your third-party interactions (lender, solicitor, estate agent, broker)
- Follow up to ensure all paperwork is submitted to the lender for cheque issue
Protecting Your Financial Health
- Completion of a financial fitness profile
- Identification of your financial needs
- Recommendations and quotations of financial needs
- Assisting you to complete your insurance applications
- Follow up to ensure all paperwork is submitted to the lender for cheque issue
- Co-ordination of underwriting requirements and documentation
- Follow up to ensure policies are issued correctly and in a timely fashion
And that’s not all….
- Unlimited phone and email access to your advisor and their support team
- Post completion service call to ensure all your requirements have been satisfied
This service is divided into 2 parts (1: Initial meeting & research, 2: Application & Loan offer). Our total fee for this comprehensive service is €945 (+23% vat) for standard residential mortgage applications. €95 payable on initial discovery meeting and initial research, €400 payable on application assessment with the balance €450 payable once an official Approval in Principle (AIP) has been secured from a lender.
For more complicated lending requirements fees will be arranged beforehand.
The fees paid at initial meeting, research and application stages are non-refundable even if the mortgage application is not successful. We will not go to application stage if we think we will not be successful. Once we have secured an offer and you elect not to proceed for any reason, we reserve the right to charge our fee for our advice and services. In the event of a lender rejecting an application from us on your behalf due to information or an unacceptable credit history not disclosed to us, we reserve the right to charge our fee.
If you have questions or need Mortgage Advice about the First Home Scheme Donegal, call 074 9103938 or email now
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.
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