Maximum multiple loan

Like all recent returnees I am finding property prices in Dublin a bit steep to say the least. I have a depost of around 20-25% from a house sale in the UK but as I am now single again my buying power in the mortgage market is somewhat reduced. However because my outgoings are quite low I can afford to pay back a lot more than a X3 salary loan. what is the largest multiple of salary loan I cold expect to get?

No. Most lenders now work on the (stress tested) mortgage repayment not exceeding 40/45% of your net disposable income; if you are buying a property with more than one bedroom they will automatically add in room rental. The upshoot is that you can (roughly) work on up to 5 times your income.

Sarah

www.rea.ie

Mortgages aren't really based on a multiple of your salary any more. Most lenders now take a percentage of your net monthly income (35%-40% generally, some even 45% depending on your circumstances). This is the sum you are 'allowed' to service all loans - any existing loan repayments/financial commitments and your new mortgage. These figures are stress tested at 2% above the standard variable rate so if interest rates rose by 2% you would still only be using 35%-45% of your net income to repay your mortgage.

Confusing?

Say your net monthly income is €3500 and you have no financial commitments. Assume that you can repay your mortgage over a 35 year term and the lender will allow you 40% of your net disposable income (NDI):

3500 x 40% = 1400 / 5.82 = 240,500 max loan.

The term over wich you cna repay the mortgage makes a big difference to the loan you qualify for.


If you are single with no dependents you can also include room rental. This can add another 30k/35k