Securing a mortgage with No Savings Account but with large sum accumulated in Current Account?

houseseeker2023 · 18-08-2023 1:11pm #1

Hi

I have a query regarding mortgage applications.

I've had what I now realise to be a very stupid saving practice.

Over time, I've accumulated €170,000 in my current account rather than saving funds in a separate savings account every month. I'm 32, with a base salary of €80k (total compensation of €96k), single, no dependents.

I plan to use the majority of the €170k towards a house purchase and secure a mortgage for any additional amount needed. For instance, for a €350k house, I'd use €150k from my current account and take out a €200k mortgage.

I assumed that banks would be content with my current account statement. They'd be able to see that I don't spend too much and save most of my salary and that my current account has accumulated to €170,000.

However, after browsing these forums and other resources, I've found that some banks, like Bank of Ireland, might require explicit savings account statements.

For example, on their "Mortgage Documentation checklist" on their website, Bank of Ireland says they require 6 months of current account statements, plus 12 months of savings account statements "if account is not with Bank of Ireland".

Has anyone been able to get a mortgage in a similar situation without a savings account?

If so, does the approval process take longer?

I've applied for a Bank of Ireland "MortgageSaver" savings account today and will allocate some of my income to this account over the next 12 months. But I'm annoyed at myself that I have to wait another 12 months before I can start applying for a mortgage, even though I have plenty of funds already to pay for the mortgage deposit.

I appreciate any advice given.

Thanks!

Augme · 18-08-2023 1:17pm

You'll have no problem getting a mortgage. You don't specifically need a savings account, you basically just need to show the ability to pay off a mortgage every month and you can do that with a current account. You can also do that if you've been paying rent for the last 6 months too.

RurtBeynolds · 18-08-2023 1:24pm

"Can I get a mortgage with my 170k savings?"

Really OP?

SuperBowserWorld · 18-08-2023 1:27pm

People's jaws hitting the ground reading this thread. 🤣

houseseeker2023 · 18-08-2023 1:34pm

https://www.boards.ie/discussion/comment/120995284#Comment_120995284

My point is it's in a current account, and not in a savings account.

frank730 · 18-08-2023 1:36pm

no need for a saving account, all based on your ability to repay. i.e. your monthly money in vs. money out.

herbalplants · 18-08-2023 1:43pm

https://www.boards.ie/discussion/2058309838/securing-a-mortgage-with-no-savings-account-but-with-large-sum-accumulated-in-current-account

Not at all, they can see you are saving monthly. You don't need a separate saving account. Go for it, you will get approval

EchoEmber · 20-08-2023 8:34am

As a person who recently got a mortgage with BOI, they can be very picky. Doesn't matter how much money you have they need to justify to the underwriters that you have shown the ability to save every month for at least 6 months. So say if you are with BOI either open a Mortgage saver account and/or Goal Saver account and put in €1500 month into both accounts. Even if both DD exceeds your monthly salary and is going from your saving account, they don't care as long as they can say jimmy has proven he can put aside X monthly (which more or less should equal to your mortgage payments - minus any rent you are paying)

Also don't keep all your savings in a current account, most banks provide a savings account -with an IBAN number etc, and will allow easy transfer between the current and saving accounts.

Leg End Reject · 20-08-2023 11:39am

https://www.boards.ie/discussion/comment/121002671#Comment_121002671

Surely if the OP has accumulated €170,000 in their current account by spending less than goes in they have already demonstrated an ability to save?

Bakharwaldog · 20-08-2023 5:25pm

Won't have an issue but honestly just set up a savings account and use it between now and when you draw down mortgage. Just don't give them any reason to reject you. Even if it's a 1% chance.

Also, as an aside. Have you considered using an account that pays interest? There are a good few options that will pay 3% per year risk free. Would be a few grand a year.

https://www.askaboutmoney.com/threads/instant-access-notice-deposit-accounts.102329/

EchoEmber · 28-08-2023 7:15pm

https://www.boards.ie/discussion/comment/121003125#Comment_121003125

Sorry for the delay, I understand what you are saying.. I was just speaking from my recent experience, but people can do as they wish of course.

Banks typically only look for 6 months of statement, so assuming you wouldn't have accumulated that much in just the 6 months. On the other hand, I know folks who have borrowed money from their friends to prove they have X amount in the bank to look good and still have managed to get a mortgage.

In my case, I found if you have X amount going into a savings account regularly, it just makes the whole process easy. You will find everything in a mortgage process is a tickbox experience.

28-08-2023 7:21pm

https://www.boards.ie/discussion/comment/120995339#Comment_120995339

They don't care.

DownByTheGarden · 29-08-2023 7:41am

We got a mortgage last year with BOI. Had money invested with degiro. No savings account. Used to invest all the money using degiro instead of saving it because of the crappy rates. There were no problems at all with this setup for us.

A short while after we cashed out the investments and paid them off the mortgage anyway (after paying the tax) as interest rates were starting to go up and we had other plans too that needed the investments paid off the mortgage.

Anyway, the point is the bank was happy with our money situation and we had no problem at all getting the full mortgage at the time. That was BOI, but we had applied to a couple of banks just in case and they all had no problem at all with our "savings" situation and lack of a "savings" account.

Danzy · 29-08-2023 8:35am

You have shown that you can save some bit, you'll have to convince them you can do better but you should be ok.

pjordan · 29-08-2023 9:08am

I'm curious as to your financial logic OP and a bit baffled as regards the apparent financial illiteracy of the younger generation (not just specifically you, as you at least seem to have considerable financial acumen to accumulate that sum)? In an age of electronic banking, the process of setting up an additional online saving account within your existing bank log on profile merely involves just a few clicks. So I'm wondering why you didn't do this or even apparently consider this (up to recently setting up the mortgage saver a/c) in the presumably lengthy duration it took you to accumulate €170k in your current account? Even with the appalling interest rates we've witnessed in the past decade, having that sort of money within a number of savings accounts would have compelled the bank to pay you a couple of grand in interest (always a minor victor for the consumer v's the banks!). As it is they were probably charging you bank charges for the privelage of holding your €170k.

As to your actual question, as per others, I suspect you will have no bother whatsoever as your have clearly demonstrated an ability and a track record to accumulate money over time and save alot more than you were spending (even if it wasn't specifically in a "savings" a/c)

Kurooi · 29-08-2023 9:25pm

One of the reasons it's recommended to have a savings account is to dumb it down for the underwriters. If you're saving a lot on your current account they will just as well take a look at your balance 6-12 months ago vs now, make sure there are no large transfers in between there, and they'll be happy if they see significant growth on that.

Securing a mortgage with No Savings Account but with large sum accumulated in Current Account?

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