# How much will banks lend?  (Updated March 2008)



## LDFerguson (10 Mar 2008)

Each lender has its own guidelines. The following is a rough guide to what some lenders will offer. 

*Example 1 – Couple earning €35,000 each with no other loans*

Permanent TSB - €436,000
IIB Homeloans - €426,000
First Active - €425,000
Ulster Bank - €425,000
AIB - €322,000
Bank of Scotland - €320,000
ICS Building Society - €315,000


*Example 2 – single person earning €60,000 – no other loans*

First Active - €328,000
Ulster Bank - €328,000
Permanent TSB - €312,000
IIB Homeloans - €305,000
ICS Building Society - €300,000
AIB - €282,000
Bank of Scotland - €259,000


*Assumptions made*

Potential room rental €400 per month included for single person.
Couple are married.
Applicants are under 30 and avail of longest term allowed, up to 40 years
Applicants are First Time Buyers.
Applicants have no dependents and no prior adverse credit history. 
It should be noted that these are indicative figures only – all lenders reserve the right to offer more or less than these guideline figures once they see the application itself. Some lenders offer more to certain professions, e.g solicitors, doctors, accountants etc. 


It should also be noted that _*you*_ should always decide what level of borrowing is comfortable for you, rather than letting a lender decide. Just because a lender is prepared to offer you €300,000 doesn't mean you should borrow the maximum available. Do your own stress-testing - use a mortgage calculator like Karl Jeacle's to work out what your repayments would be if interest rates increase by a few percentage points. Camry put it very well below - "Don't use a bank's lending offer as a form of validation of your financial situation." 

These were prepared 7/3/2008 and are subject to change on a regular basis, especially if interest rates change.

Liam D. Ferguson
www.ferga.com


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## Brendan Burgess (10 Mar 2008)

*Re: How much can I borrow?  (Updated March 2008)*

Hi Liam

Another one for the Key Posts section. Thanks very much for this invaluable contribution. 

Any guidelines for the effect of having a guarantor? AIB told me that if they approved a mortgage for someone in their own right of €250k, they would give €350k with a guarantor. Are the others the same? 

Brendan


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## Brendan Burgess (10 Mar 2008)

*Re: How much can I borrow?  (Updated March 2008)*

Folks

This is a general thread. Please don't post your personal circumstances asking how much you can borrow.

Each of the 7 financial institutions named provides an Excel spreadsheet to brokers. For someone to answer personal questions, they would have to input your data 7 times. 

Brendan


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## LDFerguson (10 Mar 2008)

*Re: How much can I borrow?  (Updated March 2008)*

Hi Brendan, 

Guarantor applications tend to be treated on a case-by-case basis so no hard rules.  If your guarantor is Bill Gates, the extension will doubtless be more than if your guarantor is scraping by.

All lenders know that regardless of the guarantor, the loan is in reality going to be paid by the applicant.  As such, they prefer to see applicants with good prospects of salary appreciation in the near future than those on fixed scales.


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## Brendan Burgess (12 Mar 2008)

*Re: How much can I borrow?  (Updated March 2008)*

Hi Liam

Would it be possible to edit this post or to post a Reply covering how much the different lenders will lend? For example, who gives 100% mortgages and to whom? 

I have made this a Key Post 

Brendan


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## miser (12 Mar 2008)

*Re: How much can I borrow?  (Updated March 2008)*



Brendan said:


> Each of the 7 financial institutions named provides an Excel spreadsheet to brokers. For someone to answer personal questions, they would have to input your data 7 times.
> Brendan


 
Hmm... someone should be able to sort out that multiple data entry issue with a vlookup. Any Excel wizards in the house?


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## Thomas22 (12 Mar 2008)

*Re: How much can I borrow?  (Updated March 2008)*

Wow TSB are willing to lend 6 times joint income! Is that within the regulations?


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## LDFerguson (13 Mar 2008)

*Re: How much can I borrow?  (Updated March 2008)*



Camry said:


> Can I just play a little devil's advocate here and call into question the thread title?
> 
> "How much can I borrow?" is not the same thing as "How much will banks lend?"
> 
> I think that given the standing of this forum (not to mention the regulated nature of the products at issue here and the authorised status of a number of regular posters), this distinction should be made clear at every opportunity?


 
I've changed the thread title as you suggested although to be honest I'm not quite sure I understand your post.  If I had used the title "How much _should_ I borrow?", I could understand that it would be inappropriate.


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## Thomas22 (13 Mar 2008)

I think the point Camry was getting at was, and he can correct me if i am wrong. Shouldn't people be more interested in a thread on "How much can I afford to borrow" rather than "what is the absolute maximum the banks are willing to give me". I would say a couple on €35k each cannot afford to pay close to 50% of their net income on a mortgage regardless of what permanent TSB is willing to give them.


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## LDFerguson (13 Mar 2008)

I see - sorry - obviously having a slow-on-the-uptake day today.    Good points.  I suppose of recent years I've just got used to dealing with customers (particularly FTBs) who's only requirement of me is to find the bank that will extend them the maximum.  (If my 2008 experience is anything to go by, they haven't gone away, although perhaps they're around in smaller numbers.)

I'll include some sort of advisory paragraph in the original post.  Feel free to suggest improvements.  

Alternatively, if the consensus view is that perhaps the thread should be scrapped, that's fine too - I'm not precious about my art.  <Sniff>


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## Brendan Burgess (13 Mar 2008)

Hi Liam

While Camry makes a valid point, I think you should revert to your original title. That is the question which people ask. "How much can I borrow?". 

Camry

Perhaps you would do a Key Post on "How should I borrow?" and Liam can refer to it in his thread.

Brendan


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## munsterred (12 Jul 2008)

Hi all,
All of the posts I've seen so far with regard to getting mortgage approval don't take into account whether someone has a large amount of equity already, does this make any difference? I'm buying out my partner's share in house, I have the lump sum saved to buy out the equity. My only concern is whether the bank will approve me to take over the mortgage. I also have the option of renting out 2 rooms and can get a guarantor, how much of a difference does this make?


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## LDFerguson (13 Jul 2008)

The size of a mortgage you will get will depend largely on your income and other outgoings.  The size of the deposit you have won't have much, if any effect on the size of a mortgage you will get as it's of no use to you in actually repaying the mortgage on a monthly basis.  

In other words, if your income qualifies you for €300,000 that means that the lender thinks you can afford the repayments on a mortgage of €300,000.  It doesn't really matter if the house you're buying is costing €350,000 with a €50,000 deposit or €800,000 with a €500,000 deposit.


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## deedee80 (14 Jul 2008)

Hi Ldferguson,

Just wondering if you have an more up to date version of this post that takes into account the recent hikes in interest rates?


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## sman (15 Jul 2008)

where would NIB approx come in on this for the same earnings as above?


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