How much deposit is needed for a mortgage now?

I Luv Crysis

Apologies if this is the wrong forum, but myself and the girlfriend have around €12k saved up, both have stable jobs and both living with parents still but looking to move out and rent somewhere. But possibly instead of renting I was wondering what kind of mortgage could we expect from the banks these days with that deposit + combined yearly earnings of just under €50k and no existing debt. Apartments are obviously cheaper but the service charges really put me off. Thanks.

highgiant1985

Banks will differ on this but the general rule of tumb to follow is that you should have at least 10% of the house price*. But in addition to this you will also need a bit extra to cover other costs in buying a house such as stamp duty and legal fees etc..

* (AIB in some cases allow 8% deposits while some other banks look for 20% so it can vary

In terms of how much you'd be let borrow Killers or someone else will be able to give you more detail but for me (IMO) based on the deposit you have it would be less than 120,000

D3PO

I Luv Crysis wrote: »

Apologies if this is the wrong forum, but myself and the girlfriend have around €12k saved up, both have stable jobs and both living with parents still but looking to move out and rent somewhere. But possibly instead of renting I was wondering what kind of mortgage could we expect from the banks these days with that deposit + combined yearly earnings of just under €50k and no existing debt. Apartments are obviously cheaper but the service charges really put me off. Thanks.

lots of variables. How much have you been saving regularly per month ?

The fact you arent renting means this will be a very important thing to the banks as they want to see some record of you being able to afford a certain figure per month prior to living expenses.

12K isnt a lot of savings for a couple earning 50k between them and living at home to be honest.

Speak to killers1 he can help figure out what you may get, but ideally get saving hard, be diciplined and it will make things much easier for you on any application.

witchgirl26

I was recently in touch with a couple of different banks in regards how much is required now for a deposit. General answer I was given was 10%. The banks may lend you up to 92% of the value of the property, they still want you to have 10% so that solicitor fees etc can be covered. Also you need to take into account furniture etc.

I agree on the renting front & showing how much you can afford. I was told that having rented for 2 years by myself would stand to me as the bank would be able to see that I could comfortably pay my bills & rent without being overdrawn etc every month.

As for the apartment charges - I would look at this in more depth than just brushing it off straight away. Maybe get an idea of the area you'd like to buy & see how much the general management fees are. Equate this with how much it would cost to maintain a house & cover what the management fees pay for. It's a personal choice at the end of the day but also be aware that some new built housing estates also have management charges.

12K isnt a lot of savings for a couple earning 50k between them and living at home to be honest.

Speak to killers1 he can help figure out what you may get, but ideally get saving hard, be diciplined and it will make things much easier for you on any application.

I agree with the second part about saving hard does make it easier but think you're a bit harsh with the first part. You don't know the exact circumstances or how long they've been saving for. I lived at home for a while but had hardly any savings because I still paid rent to my parents & I was only new to a full time career so was enjoying my new found monetary freedom a bit by going out & travelling.

Galego

I cant believe that after the whole credit bubble collapsed and 90,000 mortgages in arrears, banks are still lending with a 10% deposit. To me, there should be strict regulations coming from the Central Bank of Ireland in which 20% deposit should be required prior to apply for any mortgage.

bee06

I would really really really think about whether buying now is the right thing to do. Chances are some time in the distant (or not so distant) future you could be thinking marriage, family etc and with your current savings and salary you won't have been able to afford a family friendly home and will have to move. We all hope that the property market picks up and you'll be able to sell and buy somewhere else but who knows? A lot of people are now stuck in unsuitable homes for their current lives including myself.

I bought an apartment 5 years ago and now want to move to a family suitable home but can't sell the apartment. I can't tell you how often I regret my decision 5 years ago.

pwurple

Galego wrote: »

I cant believe that after the whole credit bubble collapsed and 90,000 mortgages in arrears, banks are still lending with a 10% deposit. To me, there should be strict regulations coming from the Central Bank of Ireland in which 20% deposit should be required prior to apply for any mortgage.

We bought our house as first time buyers on an 8% deposit, 30yr mortgage, in 2000. It turned out ok. We both worked hard, did lots of overtime, got promoted, put any extra spending power we gained into that mortgage rather than savings, sky tv, or pubs. We had only a couple of years left on the term when we sold it last year. Most of our peers would be in the same position. People like us are/were very good bets for that kind of mortgage.

Sub-prime mortgages were caused by lending to people with no real way of paying off any mortgage, and are a totally different thing. There were mortgages taken out in this country where there wasn't a single repayment made after draw down. That was ridiculous, there was clearly no ability to pay.

Young people with good qualifications, a few years into a long term career are low risk for a 92% mortgage.

Galego

pwurple wrote: »

We bought our house as first time buyers on an 8% deposit, 30yr mortgage, in 2000. It turned out ok. We both worked hard, did lots of overtime, got promoted, put any extra spending power we gained into that mortgage rather than savings, sky tv, or pubs. We had only a couple of years left on the term when we sold it last year. Most of our peers would be in the same position. People like us are/were very good bets for that kind of mortgage.

Sub-prime mortgages were caused by lending to people with no real way of paying off any mortgage, and are a totally different thing. There were mortgages taken out in this country where there wasn't a single repayment made after draw down. That was ridiculous, there was clearly no ability to pay.

Young people with good qualifications, a few years into a long term career are low risk for a 92% mortgage.

20% deposit should protect the lender and the borrower from negative equity specially in today's unstable market. I think that what you are talking about is affordability which it is a different matter when lending.

At the moment only Irish banks are lending with deposits under 20% and this is because they know that they will get bailed out by tax payers if borrowers default.

This is just my opinion anyway. OP, sorry for the off topic.