The Rebuilding Ireland Home Loan is designed to enable credit worthy first-time buyers, who are unable to access a mortgage from a commercial lender to obtain sustainable mortgage lending to purchase a new or second-hand property. The low rate of fixed interest associated with the Rebuilding Ireland Home Loan provides first-time buyers with access to mortgage finance that they may not otherwise have been able to afford at a higher interest rate.
To support prudential lending and consistency of treatment for borrowers, a Loan to Value ratio of 90% applies to the Rebuilding Ireland Home Loan as per the Central Bank's prudential lending guidelines. Therefore, in order to avail of the loan, applicants must have a deposit equivalent to 10% of the market value of the property.
Under the statutory Credit Policy under which all applications must be assessed, applicants must provide bank or similar statements (such as post office, credit union, etc.) for a 12-month period immediately prior to making an application, clearly showing a credible and consistent track record of savings. The cash savings should be no less than 3% of the market value of the property. Gifts are permissible up to 7% of the market value, where their source is verified.
Exceptions to the above can be made where an applicant/applicants can clearly demonstrate a consistent and credible record of savings or rent payment through their bank account which at a minimum is equal to -
- In the case of a fixed rate loan, the proposed monthly loan repayment or
- In the case of a variable rate loan, the proposed stress tested monthly loan repayment.
Given the need to administer the loan in a financially prudent manner, in order to protect the financial position of both the borrower and local authorities, I have no plans to reduce these deposit requirements.
For prospective purchasers of newly-built properties, the availability, through the Revenue Commissioners, of the Help to Buy Initiative for first-time buyers may provide additional assistance to help prospective applicants for the Rebuilding Ireland Home Loan secure the required level of deposit.
