"Which bank will give the biggest mortgage?"

A good article in the Indo yesterday by Louise McBride

A couple earning €35k each, can borrow €329k from KBC if they have no kids, or €316k if they have 2 kids. By comparison, Bank of Ireland would lend €289k and €209k respectively.

I would love to know what percentage of existing customers who have two kids and €70k in combined income and a mortgage of €316k are in arrears.

The tone of that article is a worry. Despite the obligatory "don't overstretch" the general thrust is to lead people into as much debt as possible.

"But if your main priority is to get the mortgage, you need to win a bidding race. Which lender will give you the most money?"

It's a shame they did not offer a scenario of a single income family, perhaps on €70k or similar. KBC may have loosened their purse strings considerably, their figures are a surprise to me, from the conversations I had with a broker a year or so ago.

BoI seem to take the costs of having two children much more seriously than KBC. Does KBC really only reduce what it will potentially lend by €13k for two children? Childcare expenses would surely eat up a lot of the second income at those levels???

Those are figures for 30yr mortgages.
The article doesn't mention that some banks lend up to age 70 and some only to age 65.

That's nearly 10 times one salary. In the "prudent" days the main lenders used 3.5 times the principal salary and 1 or 2 times the second salary. Then when interest rates hit 16% most people could manage. While rates will hopefully never reach this level again the banks are still lending irresponsibly without any regard to the ability to pay if one salary should end. It was competition to give the best mortgage that helped get us where we are now.

Butter said:

BoI seem to take the costs of having two children much more seriously than KBC. Does KBC really only reduce what it will potentially lend by €13k for two children? Childcare expenses would surely eat up a lot of the second income at those levels???

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I never got this.

(a) A newly married 30 year old couple with no kids take out a mortgage for 30 years.

(b) A 33 year old couple with two kids take out a mortgage for 30 years

There's probably an 80% chance that couple (a) become couple (b) three years down the line, so why the different criteria???

I dont understand how a couple both on 35k can get a mortgage for approx 300 but a single income family on 70k can only get 200/210?

Does that make sense to anyone else? Surely it is more realistic that there is possibly going to be one of the pair going to be off if/when children arrive.

I dont understand the massive difference, or maybe thats just me???

DerKaiser said:

I never got this.

(a) A newly married 30 year old couple with no kids take out a mortgage for 30 years.

(b) A 33 year old couple with two kids take out a mortgage for 30 years

There's probably an 80% chance that couple (a) become couple (b) three years down the line, so why the different criteria???

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No idea! Your logic makes sense though. I quess they look at what's in front of them right now & don't anticipate changes in circumstances. Probably what caused so many problems in the recent past!
We recently spoke to a bank about a mortgage. They asked how many children? Full-time or part-time childcare? But never asked what age they were. If they had been one or two years of age we'd have years of childcare costs ahead - as it is we are almost out of those years but that didn't seem to matter to the bank even though it will free up a considerable sum each month. Neither did they ask us if we might have another child though. Circumstances change & it seems to me that the banks don't put a lot of thought into how or what those potential changes might mean.