6 tips to help you gather your mortgage deposit

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Top tips for getting your mortgage deposit together:

At Mortgage buddy we understand the pressure that many potential buyers are facing when it comes to gathering the money for a deposit. We decided to make our 6 tips to help you gather your mortgage deposit.

1. Get acquainted with the Help-to-Buy scheme

This scheme gives a tax rebate to first-time buyers of up to €30,000 to help towards the deposit for a NEW build property. The scheme is open until December 2021 having recently been enhanced by the current Government. Click here to learn more about this scheme. 

2. Look into a mortgage ‘exemption’

The Central Bank requires you to save a deposit of at least 10% of your house price, which is easier said than done with rent prices as high as they are.

However in any one calendar year, 5% of mortgages to first-time buyers can have a deposit below 10%, provided you meet other lending criteria of course. So chat to your bank about the possibility of getting a mortgage deposit exemption.

3. Consider mortgage cashback deals

A lot of banks are currently offering mortgage cashback deals for first time buyers. While the rates on these deals tend to be higher, meaning you pay back more over the longer term, there’s a lot to be said for getting a cash lump sum within a few weeks of drawing down your mortgage. Plus, you can always switch to a cheaper non-cashback deal after a few years.

4. Get more money savvy

Get up to speed on how to spend your money more wisely and watch the pennies accumulate. Every little helps to borrow a phrase.

Saving just €25 a week on your outgoings by being more money savvy will add up to over a grand by the end of the year. And by making sure you’re not overpaying on your household bills you’ll save even more. You can view some top tips on how to save your money here.

5. Claim a tax refund

According to information by the main independent providers of tax refund services in Ireland, the average refund for anyone who looks into their tax affairs is in the region of €900-€1,100. A refund like this won’t by itself help you get your deposit together but it all adds up. It’s better that the money is in your pocket as opposed to the Government’s!

6. Save

Every journey starts with the first step as they say. And whilst the task of saving for a deposit might seem insurmountable at times, even putting away just €50 a week would add up to €2,600 at the end of one year (€5,200 if you’re a couple and both saving) and that’s before you earn any interest.

Because even if you magically got gifted your entire mortgage deposit you’d still have almost no chance of getting a mortgage for the rest of the amount required unless you can demonstrate some type of savings habit.

Setting up a direct debit or standing order and paying into your savings account just after payday is the best way to go and means you’re less likely to miss the money.

If you have any more questions you are asking yourself, you can take a look at our most commonly asked questions here 🙂

Re-Mortgage Movers/Switchers

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Switch and Save

We have plenty of options for Re-Mortgage Movers/Switchers. If you are in a position to switch, it can make financial sense to do so. You will have a lower interest rate and in turn a lower monthly repayment. Up to €3,000 cash back on successful applications.

Who’s suitable?

Banks will typically only consider switching applications from those whose loan represents 80 per cent or less of the value of the property. While rising prices may have helped in this regard, it may still exclude some.

The costs

Switching your mortgage isn’t free. Banks will typically require you to get a valuation of the property carried out ahead of switching and you can expect this to cost upwards of about €130+VAT. Generally this isn’t paid for by a bank.

The risks

Just like any time you fix your mortgage or opt for a variable rate, switching mortgage providers brings the risk that your current provider might actually end up offering better rates than the provider you move to. You can review some of your options here.

Check your Eligibility

Would you like to learn more about our Mortgage products? To see if you qualify for a Re-Mortgage Movers/Switchers mortgage, get in contact today and one of our Qualified & Experienced Lending Managers will get right back to you. Our easy to use online mortgage calculator will tell you how much you can borrow, and how much your monthly repayments will be.

  • Min. loan size €100,000 -Max. loan size €1.5 million
  • Max. term 35 years
  • up to 90% LTV if no equity release is required
  • Must be resident & working in ROI

What is the Help To Buy Scheme (HTB)

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The Help To Buy (HTB) Scheme is a government initiative aimed at helping first time buyers of newly built properties with their deposit to buy or build their new home.

The HTB Scheme is only applicable to properties that are bought or built as the first-time buyer’s home. It is important to note that it does not cover investment properties.

You must take out at a mortgage of at least 70% of the purchase price.

You must be tax compliant.

A further specification is that you must live in the property for at least five years from the date you move in.

Let our experts here at MyMortgages.ie help you get €30,000 towards your new home purchase under the Help To Buy Scheme. (Note: This is based on a new build property for a first time buyer with a purchase price of €300,000.)

How much can I claim under the Help-to-Buy scheme?

The maximum tax refund is now 10% of the value of the property or €30,000 – whichever is LOWER. The rebate is only available on properties valued at €500,000 or less.

This means that if you purchase a property for €300,000, you can claim the maximum rebate of €30,000. But if you buy a house for €400,000, the relief will be capped at €30,000.

Who can apply?

Any first-time buyer of a newly built home can apply for a tax refund under the Help to Buy scheme. In order to qualify as a first-time buyer under the scheme, you must not have previously purchased or built a home yourself or with any other person.

If you’re a joint buyer, and one applicant is a first-time buyer and another applicant is not, you cannot apply for the grant.

When does the Help-to-Buy scheme end?

The extented Help to Buy scheme rate of €30,000 is scheduled to run until 31 December 2021, having been extended in the 2021 Budget.

How do I apply?

You can apply online through Revenue’s MyAccount service. And as long as you are tax compliant, Revenue will provide you with a summary of the maximum refund available to you within around five working days,

 

Contact info@mortgagebuddy.ie or call (051) 843684 to see if you qualify.