# Key Post: How much can I borrow?



## Marion (24 Jan 2006)

*Original version removed - see below for latest details*


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## Sarah W (10 Feb 2006)

Updated 10/02/06

I don't think it would be feasible to post the criteria of each lender as each has a detailed guide however as a rule of thumb the following might help;

Single applicant earning less than €30,000 - 4 times salary
Single applicant earning €30,001 - €45,000 - 4.5 times salary
Single applicant earning €45,001 - €60,000 - 4.75 times salary
Single applicant earning over €60,000 - 5 times salary

Joint applicants (both earning) - 4.5 times combined salary (all incomes)

Joint borrowers (one earning) - 4.5 times salary (all incomes)

Salary is defined as basic pay (as shown on payslips/bank statements) plus a percentage of additional income such as overtime, bonus and commission. Some lenders only take a maximum of 10% regardless, some will allow all additional income for occupations such as guards, nurses, etc. Most lenders will add in income from "rent a room" but only from single applicants and the property must have more than one bedroom (!).

Finally if applicants have other loan commitments such as loans or maintenance the annualised repayments must be deducted from the gross salary before applying the salary multiple.

The above is a general guide - it's not the most aggresive criteria on the market in all groups - but should give potential borrowers an idea of their ballpark loan amount. 

Kind regards,


Sarah


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## jnh (10 Feb 2006)

Hi Sarah,

Great piece of info there, thanks! One question though - how much do these multiples decrease by for 100% mortgages as opposed to 92%?

Regards

J.


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## Sarah W (10 Feb 2006)

They are general guidelines - as a "very" rough rule of thumb you could take off 10% for 100% mortgages. Perhaps better to start a thread with your own details and I can give you a definitive quote.

Sarah


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## Janet (10 Feb 2006)

Thanks for that Sarah, very useful to have a rough guide.

Can a clarify re loan repayments, please? 

For example if salary is 35k and loan repayments are 6k therefore amount before applying mutiple is 29k - however should the multiple used reflect that amount or the basic salary?


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## Sarah W (10 Feb 2006)

The net salary (€29k) would apply Janet so the multiple would be four times.

Sarah


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## Mammysboy (14 Feb 2006)

How much more additional can be borrowed with the rent-a-room scheme?

Thanks,
Mammysboy


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## Bambo (15 Oct 2006)

Would it be unrealistic for joint buyers to look for 5 times their combined salary? The figure we are currently looking for is just below 5 times our salary.


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## Darren Boyd (26 Oct 2006)

Hi Sarah,

Would love some friendly advice, ive recently returned from my travels and have taken a job. Salary is €45+ basic with bonus upwards of 10%. I haven't saved any money as i have been travelling and have now to pay off a 5g travel loan plus 10g car loan now. Ive taken a variable rate loan at a brutal rate of 9.4% over three years but hope to clear it much quicker. Should I a) clear this loan and apply for 100% mortgage, or b) save up a deposit and try for a 92%?? 

Am I in position to choose or am I being unrealistic with regards to buying a home in the forseeable future?


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## JerseyBean (4 Jun 2008)

I don't suppose there'd be more up to date estimates available?


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## Dave Vanian (4 Jun 2008)

There's an updated post here.


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## flowerh2 (14 May 2009)

hi 
I am looking to buy as a single person at the moment i earn 36k per year and i have a loan of just over 3k and savings of the same. Im really interested in buying within the next two years is there any advice you can give me.


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## TheBigD (14 May 2009)

Clear your loan, save more. You're going to need a deposit equal to 8% of the price of the property at a minimum. Some banks would look for 20% on some properties. So if you have only 3K so far, the max you could borrow (ignoring other factors) is €34.5K if you're looking for a 92% mortgage.


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## NorthDrum (15 May 2009)

flowerh2 said:


> hi
> I am looking to buy as a single person at the moment i earn 36k per year and i have a loan of just over 3k and savings of the same. Im really interested in buying within the next two years is there any advice you can give me.


 
As of today, 

You could POTENTIALLY get 92% of of the purchase price of the property.

Using an mortgage calculator I worked out that you MAY be entitled to get up to €230,000 with a successful application. 

This would be based on you having a clear credit history, a strong job (public service etc) no other loans and liabilities and a deposit of 8% (so looking for house of €250,000).

*This is not advice on what to do, this is just an answer to your question.*

Save save Save as you will not get a mortgage without that 8%. Having an existing loan will only mean you will get less (so it is also worth your while clearing that aswell) as mortgage companies work off your ability to repay the mortgage.

I would recommend doing some research on the area you are interested in buying in to gauge how house prices have dropped and look out for empty houses in the area (gives you a good indication if there is a demand to live in that area and especially if you can barter for an even better deal then may be offered.

Good luck.


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## Robin Banks (15 May 2009)

NorthDrum said:


> Using an mortgage calculator I worked out that you MAY be entitled to get up to €230,000 with a successful application.


 
6.4 times salary. What planet are you living on?

I love your use of the word _entitled_ too.


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## Robin Banks (15 May 2009)

flowerh2 said:


> hi
> Im really interested in buying within the next two years is there any advice you can give me.


 
Yes save for the next two years. Everything will be much cheaper.


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## NorthDrum (16 May 2009)

Robin Banks said:


> 6.4 times salary. What planet are you living on?
> 
> I love your use of the word _entitled_ too.


 
Im a mortgage broker. I used an AIB calculator provided by them that was updated this month. I never said they would get that amount, just that this was the maximum potential amount they might get.

I dont assume that everybody will be entitled to the full amount (there are credit checks, other liability factors etc). 

I love it on AAM when somebody tries to answer a question and another cynic comes on board (probably educated off Joe Duffy and newspapers) harping on about whats fact and whats not. . .

If you were as clued in as you suggest with your sarcasm you would know that most banks work off your ability to repay the loan through a stress test.

I lay the cards on the table and let people decide for themselves (not hiding the fact that this offer is not set in stone). Nothing is absolute but its generally the poorly educated that make the assumptions that what they are being told is complete fiction and what they hear on the radio is fact.


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## Robin Banks (17 May 2009)

6.4 times salary is subprime lending.

Who needs Start Mortgages when you have AIB doing this.

AIB probably carefully examined the ability of hairy chested property developers to repay their stinking €30 billion loan portfolio too. Looking forward to more state intervention and taxpayer bailouts for AIB as these toxic mortgages start festering in the years to come.

Ability to repay me This post will be deleted if not edited to remove bad language. What does anyone working in an Irish Bank know about ability to repay? Will someone please start regulating these idiots.


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## TheBigD (20 May 2009)

Robin Banks said:


> 6.4 times salary is subprime lending.


Depends on the individual. I've been approved for 7 times my salary. But in my case I have a low LTV, proven savings record, few outgoings, no dependents, no loans. So the bank's under writers have analysed this and decided that lending me that ratio is acceptable. And other banks have offered similiar amounts. 

I've done my own sums and determined that I can comfortably make the monthly repayments. I'm 100% not a subprime borrower.


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## Robin Banks (21 May 2009)

What % of your after tax salary will be consumed by your mortgage payment?

What is the interest rate on the mortgage?

What % of your after tax salary will be consumed if interest rates rise by 2%?

I would have thought that if people had learned anything out of this it's that just because the banks are offering you the money doesn't mean it's a good idea - for either of you.


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## TheBigD (21 May 2009)

Robin Banks said:


> What % of your after tax salary will be consumed by your mortgage payment?


<40%



Robin Banks said:


> What is the interest rate on the mortgage?


3.1%



Robin Banks said:


> What % of your after tax salary will be consumed if interest rates rise by 2%?


I'm fixed for a long term so a rise in interest rates won't impact me.



Robin Banks said:


> I would have thought that if people had learned anything out of this it's that just because the banks are offering you the money doesn't mean it's a good idea - for either of you.


As I've said. I've done the sums and it's affordable for me. I'm taking advantage of low interest rates and fixing in now. I'm buying a home, not an investment so negative equity is not a factor. 

But you'll still tell me I'm wrong I'm sure!


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## Mr DT (21 May 2009)

TheBigD said:


> I'm buying a home, not an investment so negative equity is not a factor.
> 
> But you'll still tell me I'm wrong I'm sure!


 
Buying a home, not an investment, doesn't mean that negative equity is not a factor. 

Negative equity is a factor for everyone in it, or potentially in it, even if it is a home. 

Why? Well it limits mobility if you NEED to move home. 
It also means you have borrowed more on your home than you needed to. What could that additional money have been spent on? 

In effect because you have overpaid you have reduced yr disposable income for the period of the mortgage, which could have a direct impact on your quality of life!!


People who say "r negative equity, so what! I'm in my home forever" are just justifying that they have over paid. But thats human nature we always try and justify our actions


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## pinkie123 (22 May 2009)

Mr.DT, people don't overpay for houses cos they wanted to. If we all had a crystal ball, well. Maybe they are saying negative equity dosen't bother them because they DO love their home, and have better things to do than lying in bed at night worrying about negative equity. Maybe they are getting a life.


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