95% Mortgages Now in Ireland: Help to Buy Scheme for First Time Buyers
Category : Mortgage News
1. What Help to Buy Scheme is available to First Time Buyers in Ireland?
The Help to Buy scheme is available to first time buyers in Ireland since 2014. The help to buy scheme has been extended in the 2020 budget, but it has its limitations. Irish first time buyers will be delighted to the news that 95% mortgages are now available under certain conditions. This is further help with raising the money for a mortgage deposit.
So, you can qualify for the Help to Buy incentive and also get an exception to pay only 5% mortgage deposit. What does this mean? It means you can possibly get a mortgage with a smaller deposit than previously needed.
Let’s remind ourselves what the Help to Buy Scheme does
Its aim is to stimulate the construction of new homes or self builds in Ireland while helping first time buyers afford these properties. The help to Buy scheme is a government initiative allowing prospective home-buyers to claim a refund of income tax (but not USC or PRSI) and deposit interest retention tax (DIRT) paid in Ireland over the previous four years.
An outline of the conditions:
- The home has to be a newly built or self-build, no investment properties. Only properties built by a registered contractor will be eligible.
- You can claim up to 5% of the purchase price of a new home
- Maximum relief €20,000
- There is also a cap on the eligible purchase price of some €500,000
- You have to live in the property for five years after you buy or build it, or you will risk Revenue clawing back your tax rebate
- You must take out a mortgage of at least 70% of the purchase price
For more information how to claim the Help to Buy Scheme incentive, refer to the Revenue website https://www.revenue.ie/en/property/help-to-buy-incentive/index.aspx
2. 95% Mortgages for First Time Buyers in Ireland
In the case that you are not in a position to purchase a new build, the 95% mortgage might be just what you need. Yes, you can get a mortgage with 5% deposit in Ireland now!
The traditional mortgage deposit of 10% for first time buyers can now be reviewed under the exception allowances of certain mortgage providers.
The general conditions that can put you in a good position for a 95% mortgage include:
- Available for First Time Buyers
- You have been renting for at least the past 12 months
- You are not looking to borrow more than 3.5 times your gross annual income
- You will pay variable rate at 3.15% per annum
3. What do I need to Apply for a 95% Mortgage?
In order to secure a 95% mortgage, you will to undergo the same process of application as for a 90% mortgage. However, you will have a much better chance if you go through a broker who has access to mortgage providers allowing 95% mortgage exceptions.