📊 How Irish Lenders Calculate Your Maximum Borrowing Power

When applying for a mortgage in Ireland, lenders do not just look at what you want to spend—they must adhere to strict macroprudential rules set by the Central Bank to ensure financial stability. Your maximum loan amount is dictated by two critical metrics:

• 1. Loan-to-Income (LTI) Limit: This is the primary multiplier cap.

  • First-Time Buyers (FTB): Can borrow up to 4x gross joint or single income. (Example: A combined income of €90,000 gives a maximum base loan of €360,000).

  • Second/Subsequent Buyers: Can borrow up to 3.5x gross income.

• 2. Loan-to-Value (LTV) Limit: This controls your required deposit. Most owner-occupier buyers require a minimum 10% deposit, meaning the maximum LTV is 90% of the property’s purchase price.

📋 Mortgage Borrowing Example

🔍  Beyond the Numbers — What Else Do Underwriters Examine?

While the calculator gives you a mathematical baseline based on your salary, underwriters will evaluate your overall financial profile before issuing an Approval in Principle (AIP):

• Repayment Capacity: Proving you can comfortably afford the monthly repayments by showing consistent rental history or savings amounts that match or exceed your projected mortgage installment.

• Variable Income Treatment: If your income includes bonuses, overtime, commission, or RSUs, lenders may only factor a safe percentage of it into your allowable gross total.

• Whole-of-Market Lender Criteria: Different Irish lenders (such as AIB, Bank of Ireland, PTSB, and non-bank lenders) interpret allowances and stress-testing differently. Using a broker helps match you with the most flexible lender for your specific profession or income structure.

📈  How Variable Income (Bonuses, Overtime, and RSUs) is Assessed

• What to add: Detail how different Irish lenders treat non-base salary. Explain that some banks take 100% of guaranteed overtime, while others only take 50% of bonuses or completely exclude RSUs unless they are fully vested and predictable.

• Why it matters: This is a massive pain point for tech, medical, and corporate professionals in Dublin. Positioning your brokerage as an expert in variable income attracts high-net-worth applicants.

🚀 Can You Borrow More Than the Standard Limits? (Mortgage Exceptions)

If your maximum borrowing calculation falls slightly short of the property price you want, you may still have options:

• Central Bank LTI Exceptions: Lenders are permitted a limited quota of lending above standard limits (up to 15% of total lending for first-time and second-time buyers).

• What’s Required: Exceptions typically require a pristine credit history, strong disposable income, secure employment stability, and a solid savings track record.

🎁 Government Schemes to Help Bridge Your Deposit Gap

If your borrowing limit or deposit is tight, you may be able to scale up your purchasing power using state-backed supports:

• Help to Buy (HTB) Scheme: Offers a tax refund of up to €30,000 for first-time buyers purchasing or building a new-build property.

• First Home Scheme (FHS): A shared-equity scheme where the Government and participating banks take a stake in your new-build property to bridge the gap between your mortgage, deposit, and purchase price.