How much does a first time buyer need for a deposit?

If you are a first time buyer looking to rent or buy a property in Ireland these days, finding the right place isn’t that simple.

By today’s standards and market prices, the average first-time homebuyer in Ireland needs to have deposits of roughly €50,000 to get onto the property ladder.

This figure is based on the housing affordability index report by EBS and DKM economic consultants. Their report also states that the average cost of a mortgage for a first-time buyer is approximately four times the deposit at €196,530.

What is the maximum mortgage limit.

  • Central Bank rules place a limit of 3.5 times your normal gross income as your maximum mortgage.
  • Exemptions are available so that in some instances you can borrow more than 3.5 times salary and having access to a wide range of lenders means that your chances of getting an exemption are improved by dealing through us. However in many instances a multiple of 3.5 times gross income is a fair multiplier when it comes to affordability.

How much of a deposit do you need?

  • First time buyers 10% ( Help to buy scheme available to qualifying applicants to fund 5% for new house or apartment purchases or self builds)
  • Second time buyers 20% of the purchase price
  • Some lenders are comfortable to have the deposit requirement provided by way of a gift, but as a general rule lenders preference is to see a steady savings pattern contributing to a reasonable share of the deposit.

first time buyer deposits

One of the Consultants, Ciara Morley said:

“We are seeing an upward trend in the proportion of disposable income required to fund a mortgage for first-time buyers over the last two years and we expect that proportion required to continue to rise.”

A Mortgage repayment is putting a considerable financial burden on new homeowners, with couple’s expected to pay 29.2% of their monthly take home earnings to finance the repayments. This news follows other reports of significant increases to the cost of housing outside of Dublin.