How much should I save for buying an apartment?

juanpernia

Hi guys.

I'm a foreigner so I don't know much about the cost of things in Ireland (deposits, mortgages, house prices), so I'd like a bit of advice on the following:

1. How much does an apartment cost? Say 2 bedrooms, modern, outside city centre.
2. What's the minimum I should be saving per month for the deposit ?

I know the answer to the second one is 'As much as you can', but having a specific number in mind will help inform my money decisions a lot.

Cheers.

Konata

juanpernia wrote: »

Hi guys.

I'm a foreigner so I don't know much about the cost of things in Ireland (deposits, mortgages, house prices), so I'd like a bit of advice on the following:

1. How much does an apartment cost? Say 2 bedrooms, modern, outside city centre.
2. What's the minimum I should be saving per month for the deposit ?

I know the answer to the second one is 'As much as you can', but having a specific number in mind will help inform my money decisions a lot.

Cheers.

It's hard to give an average cost because it varies wildly by area, even outside of the city centre. Check out myhome.ie and just have a search through some potential areas.

Are you aware of the mortgage rules? At present, you can only borrow a max of 3.5 times your salary (assuming you meet all the required criteria etc.). So if you're earning 50,000 you can borrow max 175,000. Anything over that you'll have to cough up in cash. The other rule is that you have to have minimum 10% deposit for under 220,000 and then 20% on any amount over that. So if you want to buy an apartment that costs 250,000 then you will need a deposit of minimum 28000. So that answers your 2nd question.

There are exemptions to these rules (borrow up to 4.5 times salary or pay 10% deposit on total cost of house) but banks are limited as to how many they can give away and are extremely picky. You would have to have a very secure job, a perfect credit rating and be very financially secure and even then it's a bit of a lottery. So basically, don't rely on the possibility of an exemption.

You will also need to save money for stamp duty (1% of cost of house), solicitor fees, survey fees etc. The general recommendation I see around here is to set aside about 5000 to pay for all that (more if you're going for a very expensive apartment of course).

nehe milner skudder

Konata wrote: »

It's hard to give an average cost because it varies wildly by area, even outside of the city centre. Check out myhome.ie and just have a search through some potential areas.

Are you aware of the mortgage rules? At present, you can only borrow a max of 3.5 times your salary (assuming you meet all the required criteria etc.). So if you're earning 50,000 you can borrow max 175,000. Anything over that you'll have to cough up in cash. The other rule is that you have to have minimum 10% deposit for under 220,000 and then 20% on any amount over that. So if you want to buy an apartment that costs 250,000 then you will need a deposit of minimum 28000. So that answers your 2nd question.

There are exemptions to these rules (borrow up to 4.5 times salary or pay 10% deposit on total cost of house) but banks are limited as to how many they can give away and are extremely picky. You would have to have a very secure job, a perfect credit rating and be very financially secure and even then it's a bit of a lottery. So basically, don't rely on the possibility of an exemption.

You will also need to save money for stamp duty (1% of cost of house), solicitor fees, survey fees etc. The general recommendation I see around here is to set aside about 5000 to pay for all that (more if you're going for a very expensive apartment of course).

thats ****ing grim reading

L'prof

Konata wrote: »

It's hard to give an average cost because it varies wildly by area, even outside of the city centre. Check out myhome.ie and just have a search through some potential areas.

Are you aware of the mortgage rules? At present, you can only borrow a max of 3.5 times your salary (assuming you meet all the required criteria etc.). So if you're earning 50,000 you can borrow max 175,000. Anything over that you'll have to cough up in cash. The other rule is that you have to have minimum 10% deposit for under 220,000 and then 20% on any amount over that. So if you want to buy an apartment that costs 250,000 then you will need a deposit of minimum 28000. So that answers your 2nd question.

There are exemptions to these rules (borrow up to 4.5 times salary or pay 10% deposit on total cost of house) but banks are limited as to how many they can give away and are extremely picky. You would have to have a very secure job, a perfect credit rating and be very financially secure and even then it's a bit of a lottery. So basically, don't rely on the possibility of an exemption.

You will also need to save money for stamp duty (1% of cost of house), solicitor fees, survey fees etc. The general recommendation I see around here is to set aside about 5000 to pay for all that (more if you're going for a very expensive apartment of course).

Yeah. When we were looking at buying the bank advised to have deposit + 1% of house price + €3800 moving in expenses. So on €250k purchase price that would be €34300

juanpernia

Konata wrote: »

It's hard to give an average cost because it varies wildly by area, even outside of the city centre. Check out myhome.ie and just have a search through some potential areas.

Are you aware of the mortgage rules? At present, you can only borrow a max of 3.5 times your salary (assuming you meet all the required criteria etc.). So if you're earning 50,000 you can borrow max 175,000. Anything over that you'll have to cough up in cash. The other rule is that you have to have minimum 10% deposit for under 220,000 and then 20% on any amount over that. So if you want to buy an apartment that costs 250,000 then you will need a deposit of minimum 28000. So that answers your 2nd question.

There are exemptions to these rules (borrow up to 4.5 times salary or pay 10% deposit on total cost of house) but banks are limited as to how many they can give away and are extremely picky. You would have to have a very secure job, a perfect credit rating and be very financially secure and even then it's a bit of a lottery. So basically, don't rely on the possibility of an exemption.

You will also need to save money for stamp duty (1% of cost of house), solicitor fees, survey fees etc. The general recommendation I see around here is to set aside about 5000 to pay for all that (more if you're going for a very expensive apartment of course).

Wow, thanks a million for all the info!

My salary is 40k/yr, so following these numbers it means the max I can get is 140K (40k * 3.5).

So if I found a place for that price, these is roughly what I can expect:


Cost of the apartment €140K

---

Deposit: € 14K
Extras (stamp duty, fees): € 5k

---

Total to be mortgage ready € 19K


I'm saving about €500/month which means I'll have the 19K in 38 months (3yrs and 1.5 months).

I have some savings already so I'll be less than that. Still a long time though o_O
Thanks again!

P.D.: feel free to add any feedback on the numbers above

Konata

juanpernia wrote: »

Wow, thanks a million for all the info!

My salary is 40k/yr, so following these numbers it means the max I can get is 140K (40k * 3.5).

So if I found a place for that price, these is roughly what I can expect:


Cost of the apartment €140K

---

Deposit: € 14K
Extras (stamp duty, fees): € 5k

---

Total to be mortgage ready € 19K


I'm saving about €500/month which means I'll have the 19K in 38 months (3yrs and 1.5 months).

I have some savings already so I'll be less than that. Still a long time though o_O
Thanks again!

P.D.: feel free to add any feedback on the numbers above

Your numbers are right. Don't forget about the cost of furnishing the house too! The mortgage rules are fairly new and are undergoing review at the moment so the exact criteria may change within the next few years but it's always good to have a savings target based on what the current rules are. Best of luck with it all.