If you are thinking about buying a home in Ireland, there are two numbers you need to understand before anything else: how much you can borrow, and how big a deposit you need. Both are governed by the Central Bank of Ireland’s mortgage lending rules — and getting your head around them early will save you a lot of confusion down the line.
Disclaimer: This article is for information purposes only and does not constitute financial advice.
The Two Main Rules
The Central Bank introduced mortgage lending limits in 2015 following the property crash. The rules work on two dimensions:
- The Loan-to-Income (LTI) limit — how much you can borrow relative to your gross income
- The Loan-to-Value (LTV) limit — how much you can borrow relative to the purchase price of the property (which determines your minimum deposit)
Both limits apply to your mortgage application, and both must be satisfied.
Rules for First-Time Buyers
First-time buyers (FTBs) get the most favourable treatment under the Central Bank rules:
- Income limit: You can borrow up to 4 times your gross annual income
- Deposit requirement: You must have at least 10% of the purchase price as a deposit (maximum LTV of 90%)
These rules apply to all Irish lenders — AIB, Bank of Ireland, EBS, Haven, Avant Money, ICS, PTSB, Moco, and all others.
What counts as “first-time buyer”?
Both applicants must qualify as first-time buyers for the FTB rules to apply. If one person in a couple has previously owned a property — even abroad — the couple is typically treated as second-time buyers for LTV purposes.
Rules for Second-Time Buyers
If you have owned a home before, the rules are stricter:
- Income limit: You can borrow up to 3.5 times your gross annual income
- Deposit requirement: You must have at least 20% of the purchase price as a deposit (maximum LTV of 80%)
Exceptions and Allowances
Each year, lenders are permitted to approve a limited proportion of their new mortgage lending above the standard limits:
- For FTBs: Up to 5% of new lending can exceed the 90% LTV limit
- For second-time buyers and other borrowers: Up to 20% of new lending can exceed the 3.5× income limit and/or the 80% LTV limit
These exceptions are not guaranteed — lenders allocate them carefully and they tend to be used up early in the year. Do not build your home-buying plan around the assumption that you will get an exception.
What Counts as Income?
The income figure used to calculate your maximum borrowing is your gross annual income — before tax and deductions.
For more complex income situations, lenders apply their own policies:
- Overtime and bonuses: Typically averaged over 2 to 3 years
- Commission: Usually averaged over 2 to 3 years of payslips
- Self-employed income: Based on 2 to 3 years of audited accounts or tax returns
- Rental income: Some lenders include a portion (often 75%) of rental income
- Second jobs: Some lenders will include income from a second employment if consistent for 2+ years
How the Rules Work in Practice
Example 1 — FTB couple, combined income €90,000
Aoife and Declan are buying their first home together. Aoife earns €50,000 and Declan earns €40,000 — a combined gross income of €90,000.
Maximum borrowing (4× income): €90,000 × 4 = €360,000
If they are looking at a property for €360,000, they need at least 10% as a deposit: €36,000.
Example 2 — Single FTB, income €55,000
Siobhán is buying alone. She earns €55,000 gross per year.
Maximum borrowing (4× income): €55,000 × 4 = €220,000
With a 10% deposit of €24,444, she could purchase a property worth up to €244,444.
Example 3 — Second-time buyer, income €80,000
Pádraig previously owned a property and is now buying again. He earns €80,000 gross.
Maximum borrowing (3.5× income): €80,000 × 3.5 = €280,000
He needs a 20% deposit. For a property at €350,000, he needs €70,000 upfront, borrowing €280,000.
Tips for Maximising Your Borrowing
- Increase your income before applying. Even a €5,000 increase in gross income adds €20,000 to an FTB’s borrowing capacity.
- Clear existing loans and credit card balances. High existing debt reduces what you can realistically borrow.
- Build a larger deposit. A deposit above the minimum gives you access to better LTV-tiered rates from lenders like Avant Money and Haven.
- Time your application carefully. If you’re expecting a bonus or significant pay rise, waiting until this is reflected in your payslips can increase what lenders offer.
- Use a mortgage broker. Different lenders interpret certain income types differently.
Frequently Asked Questions
Can the Central Bank mortgage rules be changed?
Yes. The Central Bank reviews its mortgage lending framework periodically. The rules were most recently revised in January 2023, when the FTB income limit was raised from 3.5× to 4× gross income. The Central Bank can increase or decrease limits following its annual review.
Do the Central Bank rules apply to switcher mortgages?
No — the Loan-to-Income (LTI) limit does not apply to switcher mortgages (re-mortgaging with a new lender without moving home). The LTV limit may apply in some circumstances depending on your equity position.
What if I am a first-time buyer but buying with a second-time buyer?
For LTV (deposit), the second-time buyer rules apply — you will need a 20% deposit. For the LTI (income) limit, lenders differ: some apply the 4× FTB limit to a mixed couple, others apply the 3.5× STB limit. Check with your chosen lender or use a broker to find who treats this most favourably.
Is there any way to borrow more than 4× income as a first-time buyer?
Only through a lender exception. Lenders are permitted by the Central Bank to exceed the 3.5× income limit for up to 20% of their non-FTB lending, and FTBs have a separate allowance for LTV exceptions. Exception capacity is limited and often exhausted early in the year — build your affordability plan within the standard limits.
Do the Central Bank rules apply to buy-to-let mortgages?
The LTI (income multiple) limit does not apply to buy-to-let mortgages. Lenders assess BTL affordability based on rental yield and stress-tested rental coverage ratios. However, BTL mortgages are capped at 70% LTV (30% deposit required).
Find Out Exactly What You Can Borrow
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