How much is First Time Buyers Tax Relief worth

paulztag

I'm currently looking into buying a house and I've already talked to the bank about a mortgage. They said I should get €142,500 which is 92% of the purchase price of €155,000.

The purchase price of €155k is for turn key condition and the house is in a nice area so the price seems good. I'm trying to work out should I go for this house now to take advantage of the first time buyers or wait for another year or 2.

Does anyone know how much first time buyers is worth on a mortgage of €142,500 or how I can work it out? The mortgage I applied for was a 35 year mortgage with 2 years fixed at 3.4% and then onto the variable rate.

I've worked out that if I wait another 2 years to buy I will lose another €10k in rent as I pay €420 a month at the minute and also lose whatever the first time buyers is worth.

Any help would be very much appreciated. Thanks

spockety

The way things are going (IMF, bailouts, etc, etc.) I would be very wary of making any decisions based on the availability of any reliefs , particularly property related.

These things can be pulled like a rug.

I would also be seriously questioning taking out a mortgage with a term of 35 years, it is incredibly long.

At the end of your 2 year fixed rate, there is a very good chance that you will find yourself coming on to a variable rate that could be 6% or higher, have you checked whether this is something you could afford?

www.drcalculator.com/mortgage is a very good tool for checking these kinds of things.

The other thing worth pointing out is that the Central Bank in doing the bank stress tests have forecast price drops on property of at least 10% each year for the next 2 years. That would make your proposed house drop in value to about €125K. Perhaps at that value level you would be in a position to only take a 30 or even 25 year mortgage...?

Something to think about. I would not be in any rush right now, there are a lot more downward turns to come.

paulztag

Hi spockety. Thanks for the quick reply and the advice. Ya there is alot to consider. I would look for the 35year to start and then look to bring it down after the first few years. Getting married next year so cant really afford to be paying big repayments when trying to save too. Once the wedding is over I would look to restructure the payments and get it paid off alot earlier than 35 years.

The drop in price is something I'm looking at but this house started off around the €300k mark 2 years ago for a builders finish so I cant see it coming down much more. The house is a dormer in a housing estate with a total of 8 houses. There are 4 different types of houses (which I like so not all houses are the same) and 5 out of the 8 are sold so I don't see this house still been there in another year as one even sold 2 weeks ago. The one I'm looking at only has the block work and roof done so far so I'd have the chance for some input into it too.

I'm trying to trade off my rent payments and what I would get from tax relief's against any potential drop in price. I also have the option to buy the house for €140k builders finish but for me at the minute the turn key condition at €150 to €155k looks like a better option. Your point about the relief's is a good one too though. Nothing really certain at the minute and only looks like getting worse.

Thanks again for the advice