Impact of monthly versus annual pension payment on mortgage application?

Quick question. I'll be applying for a mortgage in the next year. My annual AVC is due for renewal now. I could change it to a monthly payment of €230 per month as opposed to the current lump sum. Would a monthly direct debit payment reduce the money a bank might loan to me?

Hi Aodhán

A more fundamental question. Why are you making AVCs when you will be applying for a mortgage? Best to maximise your cash.

You can make up the deficit as soon as you have drawn down the mortgage and got it under control.

Brendan

Hi Brendan,

I've been paying the same amount (inflation linked) for the past six years as an annual payment as I've always been wary about the credit rating impact of missing direct debits (I've been paying it while also paying my mortgage).

Nevertheless, as I'm also going through a divorce I was thinking it might make my true net income clearer to the judge if they see the monthly deduction for the AVC. That's my principal motivation in making this change. However, as I will have to buy some place new when the divorce is over, I'm thinking will that monthly deduction reduce the money a bank will lend me? (I could pause the AVC payment, of course, but I'm trying to maximise my tax benefits). Could the fact that I can pause the payment mean the bank would lend me more if I did so or would they just reduce the money available without discussion?