How much can you borrow?

Lenders use different ways to work out the amount of money they will lend you for a mortgage. Some will lend you a multiple of your annual income. Others will try to make sure that your monthly mortgage repayment doesn't go above a certain percentage, perhaps 40% of your monthly take-home pay.

Percentage of the property value you will be offered

Depending on their lending policy, some lenders may lend up to 92% of the value of the property you want to buy - provided your income and other factors make your purchase affordable. If you get a 92% mortgage, this means that you will have to fund 8% yourself.  For example, if you can afford to buy a house worth €300,000, your lender may lend up to €276,000.  You will have to fund the remaining €24,000 yourself.

If you already have other loans

Your lender may:

• offer you a smaller mortgage
• ask that you pay off all your other loans before they will give you a mortgage
• refuse your application.  

While it may be tempting to borrow as much as possible, you need to make sure you will be able to cope with future events such as higher interest rates, the arrival of children, illness or redundancy.

How much can you afford to borrow?

• Use our budget planner to work out what you can comfortably afford to repay each month. Include a regular amount for 'unforeseen expenses' in your budget such as medical expenses, interest rate increases etc.
• Use our mortgage calculator to work out the cost of your monthly repayments.

With a shorter term, you will have higher monthly repayments. But because you are repaying the mortgage over shorter time, you pay less interest in total. With a longer term, you will have lower monthly repayments. But you will pay more interest over the term of the mortgage.

Use our mortgage calculator to compare monthly repayments for mortgages over different terms, and with different interest rates. 

Even a small difference in interest rates can have a big effect on a mortgage:

Other costs to consider

Remember to also budget for other costs involved with buying a home, which may include:

• Valuation fees, usually €100 to €150. This pays for a professional valuer to give your lender an estimate of a property’s market value. Lenders will usually refund the valuation fee if your mortgage is not approved.
• Legal fees. You need a solicitor to look after the legal aspects of your mortgage. Fees vary, and may be either a percentage of your mortgage, or a flat fee. So, before you choose a solicitor, ask about their professional fees and other costs you have to pay, such as land registry and search fees.
• Stamp duty
• Surveyor or engineer fees to look over the house before you buy.
• Cost of appliances, furniture and other contents for your new home.  

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