The Central Bank's new measures for mortgages are effective from January 2023. These changes will allow a first-time buyer borrow up to 4 times their income (single or combined). This is an increase from 3.5 times their income. For example, if you are single and earning a salary of €75,000 per annum, last year you would have been eligible to borrow €262,500, this year that has increased to €300,000.
The Central Bank has also redefined the meaning of a first-time buyer under the new measures. Borrowers who are divorced or separated or who have undergone bankruptcy or insolvency may be considered first-time buyers. This is a significant move and will assist a lot of potential clients in offering a fresh start going forward, provided they no longer have an interest in their previous property.
An added enhancement will also allow clients who are eligible for a top up loan or re -mortgage with an increase remain under their first-time buyer status provided their property remains their primary home.
There are also welcome changes to the new measures for second-time buyers which are also effective straight away. As a second-time buyer the requirement to have a 20% deposit has now been reduced to 10%.
For example, if you are purchasing a property for €500,000 as a second time buyer you would have had to fund €100,000 by way of a deposit or gift to complete the purchase. Under the new measures this is now reduced to €50,000.
Lenders will continue to be able to lend a certain amount above these limits, in line with their own credit policies.
If you wish to discuss your options and how these changes may benefit you, please contact our mortgage team on 01- 4980007 or visit our website www.biograph.ie for more information.