What is a First Time Buyer (FTB) – Definition?
What is the First Time Buyer Definition? We are asked this question every day at Mortgage123. The answer is not as simple as you may think. In fact, the definition can vary between mortgage lenders, and also for the purposes of the Help to Buy Scheme.
Mortgage Lenders – Who qualifies as a First Time Buyer?
Most Irish lenders follow the Central Bank of Ireland‘s definition of a first time buyer except Permanent TSB*.
The Central Bank of Ireland states:
‘A first-time buyer is defined as a borrower to whom no housing loan has ever before been advanced. Where the borrower under a housing loan is more than one person and one or more of those persons has previously been advanced a housing loan, none of those persons is a first-time buyer.’
Simply put, a first time buyer is a person who has never taken out a mortgage for a property before. In the case of a joint application, both parties must be first time buyers to be eligible for a first time buyer mortgage.
However, there is one Irish lender who does not follow the Central Bank of Ireland’s lending rule – Permanent TSB.
* Permanent TSB defines a first time buyer as someone who has never owned a property before, including cash property purchases.
What if I was gifted/inherited a property?
If you have been gifted or inherited a property, you will not lose your FTB status.
Help To Buy Scheme – Who Qualifies?
Help to Buy (HTB) incentive is a scheme for first-time property buyers. It helps you with the deposit you need to buy or build a new house or apartment. You must buy or build the property to live in as your primary home.
The Help to Buy Scheme defines a first time buyer as someone who has never owned a property whether it be by cash or mortgage; inherited and gifted properties are exempt from this rule.
In the recent budget, the HTB scheme was extended until the end of 2022. If you sign a contract for a new house or draw down on a self-build mortgage between now and December 2022, you will be eligible for the increased relief – called enhanced relief.
You can claim relief on the lesser of:
- 10% of the purchase price of the property
- 10% of the completion value of a self-build
- The amount of income tax and DIRT you paid for the previous 4 years
For many of us, the most difficult financial decision we will have to make in our lives is buying a home. With the mountain of information floating around on first time buyers, it can be difficult to wrap your head around the subject.
Find it confusing? That’s why we are here to help.
At Mortgage123, our expert advisors can guide you through the process of getting your first home. Take the stress out of your mortgage by contacting us today.