Homeowners face a €587 a month hike as they roll off their fixed rate mortgage
Avant Money’s head of mortgages sees huge cost shocks in store – and his firm is positioning itself to take advantage of situation
For most mortgage holders switching is the single biggest thing you can do to save money, says Brian Lande, head of mortgages at Avant Money. Photo: Jason Clarke
Around €9bn worth of mortgages are set to roll off of relatively low fixed rates in the next three years and onto higher ones, according to an analysis of Central Bank data.
The analysis by Avant Money, a lender based in Carrick-on-Shannon, Co Leitrim, showed the average rate for those with fixed-rate mortgages expiring in September across Ireland was 2.9pc.
According to Avant Money’s market estimates, these mortgage holders face higher rates, which could range from 4.7pc to 7.15pc.
Those rolling off of a 2.9pc mortgage of €250,000 with 20 years left and onto one at 4.7pc could end up paying €235 more per month, or €2,816 per year. If they roll onto a 7.15pc mortgage, they could pay €587 more each month, or €7,041 yearly.
In an interview with the Sunday Independent, Brian Lande, head of mortgages at Avant Money, and Stephen McCormick, commercial manager at Avant Money, said many people were facing a “massive payment shock”.
“We see a massive pot of opportunity for customers to be saving money,” said McCormick. “Switching mortgages for most mortgage holders is the single biggest thing you can do to save the most amount of money.”
Based on Central Bank of Ireland data from September 2023 and Avant Money’s estimates, the €9bn represents almost 66,000 mortgages. With many being joint mortgages, it could represent 130,000 people.
Around 4,000 mortgages will roll off by September this year, Avant says, with the remaining 62,000 rolling off at some stage before September 2026. The total balance of mortgages rolling off by this September stood at €516m.
Avant Money entered the Irish mortgage market in 2020, offering lower interest rate mortgages than its competitors.
‘The overall mortgage market in 2023 finished at €12.1bn, down on €14.1bn the year before’
While its rates have increased in the years since as the European Central Bank’s interest rates rose in the aftermath of the pandemic and Russia’s war in Ukraine, the Co Leitrim-based firm has benefited from Spanish parent company Bankinter’s access to cheaper debt through its ECB banking permit.
Total lending, including mortgages and consumer loans, by Avant Money hit €3bn last year. Its mortgage book stood at €2.2bn at the end of last year, up 41pc, despite a slowdown in the pace of growth at its new mortgage business as higher interest rates sapped switcher appetite.
Lande said Avant Money currently aims to grow its share of the mortgage market to 10pc by 2025/26, up from just over 6pc last year.
“In getting there, we would have always seen that we would effectively be replacing the type of market share that either Ulster Bank or KBC has. We have effectively become the fourth player.
“That strategy is very much in train and going to plan.
“As we move forward, the overall mortgage market in 2023 finished at €12.1bn, down on €14.1bn the year before. That was largely because switchers left the market – they felt it was the wrong time.
‘Give or take, half of our customers will be first-time buyers, quarter movers and another quarter switchers,’ says Brian Lande. Photo: Jason Clarke
“We see the market this year as likely to be the same size, although if switching returns, we can see that the market will grow in 2024. The only question would be by how much.”
Lande said that since the start of the year, Avant had experienced a “huge upsurge” in switchers as they hit their roll-offs at other mortgage providers.
Regarding its plans to secure 10pc of the mortgage market, Lande said the market currently consists of 62pc first-time buyers, 26pc those moving homes, and the remainder switchers. He added that its share of the switcher market is likely to be higher than most.
“We won’t be too far off that mix,” Lande said. “Give or take, half of our customers will be first-time buyers, quarter movers and another quarter switchers.”
Looking at parts of the mortgage market it hasn’t entered, Lande said Avant is not considering offering a buy-to-let option at the moment.
Lande acknowledged that competition is another core consideration for Avant Money. He said the three banks had kept mortgage rates low, taking advantage of their ability to access cheaper debt. This had negatively affected the non-bank sector in the past year. However, Lande said other entities are launching or relaunching, citing the examples of ICS Mortgages and MoCo.
There was also a question about Revolut’s potential to enter the mortgage market.
He added there was an expectation in the market that the credit unions would look to enter a co-ordinated mortgage plan.
With Avant Money having increased its rates in 2023, Lande said it had “no particular plan to change rates either up or down”.
“What we are seeing at the moment is that the increases in the official ECB rate have stopped, not fallen. That is giving everyone a period of stability,” he said.
‘For us competing in the market, we will be very keen to see what others do first’
“The Irish banks and Avant Money only increased rates by, on average, 1.5pc from bottom to top, whereas the ECB rate increased 4.5pc.
“I think interest rates will come down, official rates. The general economic sentiment is that they will, so the question is when and how much.
“The question then is will banks be fast or slow to reduce mortgage rates,” he added.
“They were slow to bring them up, but will they be slow to bring them down? We don’t know.
“For us competing in the market, we will be very keen to see what others do first. We will be watching them carefully to see where we stand in our proposition.”
Another critical change for Avant Money had been the introduction of its direct channel mortgage offering. The lender had been broker only up until recently.
Currently, Lande said one-third of mortgage applications are coming through its direct channel.
“In the previous 24 hours, we have had hundreds of customers getting a mortgage estimate. That has been an extraordinary success for us to date.
“Our hope is that will easily get us to that 10pc market share.”
In December, Avant Money announced a simplified mortgage switching process and switching incentive for customers, reducing the number of documents required.
Source: Sean Pollock, Irish Independent 18th February 2024
Average mortgage rates fall for third month in a row
Mortgage rates are up since last year but the average rate is down slightly in the past three months. Photo: Getty
Mortgage rates have fallen for the third month in a row despite no major reductions in lending rates by the main banks.
The average rate being paid for a new mortgage in December was 4.19pc, a decrease of 0.06 percentage points from the previous month.
However, this is up 1.5 percentage points from a year previously.
The decline in rates in December has been attributed to people having to take out larger mortgages, due to rising property prices. Larger mortgage qualify for lower rates.
PTSB cut one of its rates recently.
And people choosing shorter-term rates, which tend to be lower than longer-term rates, are also understood to be behind the latest fall in average new mortgage rates.
People increasingly opting for green mortgages, which are cheaper than conventional, may also account for the lower interest rates over the last three months.
The latest fall in rates meant Ireland had the 10th lowest rates in the Eurozone, the Central Bank of Ireland said in a release.
However, rates vary hugely across the currency bloc from as low as 2.44pc in Malta to as high as 6.06pc in Latvia.
The Eurozone average also fell to 4.06pc, its first month-on-month drop in over two years.
Mortgage rates have begun to ease in recent weeks in some countries as the cost of raising funds on capital markets eases in advance of an expected drop in ECB rates later in the year.
Data from the Central Bank also showed that the average interest rate on household deposits with a fixed maturity moved higher to 2.73pc.
But this was still well below the Eurozone average of 3.29pc.
Interest rate on demand deposit accounts remained much lower at 0.12pc, which was the same as November.
Just under €140bn of the €153bn on Irish households currently have on deposit is in these accounts.
Previous analysis from Bonkers.ie showed that Irish savers are collectively missing out on up to €3.5bn a year in interest by not moving their money into accounts with the best savings rate.
Daragh Cassidy of Bonkers.ie said: “Irish mortgage rates continued their surprising downward trend in December with rates falling for the third month in a row.”
PTSB cut its four-year fixed rate near the start of December, which would partly explain the drop, he said.
“First-time buyers might also be choosing shorter-term fixed rates, which tend to be lower than longer-term rates.
“This would make sense as it looks like the European Central Bank (ECB) will start to cut rates over the coming months so mortgage holders may not want to lock themselves into a particular rate for too long.”
Mr Cassidy said continued property price growth also means first-time buyer mortgages are getting bigger and bigger.
Recent figures from the Banking Federation show that the average loan amount is now almost €300,000.
This means more homebuyers would be eligible for a so-called “high-value” mortgage with some lenders. And these have lower rates too.
Most market observers now believe the ECB will not start to cut rates until around June.
Tracker customers will benefit almost immediately from any cuts.
Mr Cassidy said that for everyone else, it’s less clear cut.
The main lenders have passed on less than half of the ECB rate hikes to date. So it’s unlikely AIB, Bank of Ireland and PTSB will respond to any rate cuts immediately.
He said that for the non-bank lenders like Finance Ireland and ICS Mortgages, we could see them drop their rates fairly significantly over the coming year as the cost of raising money on capital markets, from where they get all of their finance, falls.
However, their rates right now are very high compared to the main lenders.
Source: Charlie Weston, Irish Independent – 15th February 2024
Mortgage holders hit by rate hikes can now claim tax credit from Revenue
Finance Minister Michael McGrath. Photo: Thierry Monasse
Homeowners hit by mortgage rates hikes last year will be able to claim tax relief on their payments from today.
The new scheme was announced in last October’s Budget and enables any mortgage holder that paid an increased rate last year to claim up to €1,250 in a tax credit.
PAYE workers can get the credit through Revenue’s MyAccount service. But they must file a 2023 tax return to do so.
It is estimated there are approximately 208,000 mortgages eligible for the relief. The projected cost is €125m on a once-off basis.
Claimants need to upload their certificate of mortgage interest for 2022 and 2023 and provide a confirmation of their mortgage balance on December 31, 2022.
The easiest way for PAYE taxpayers to claim the relief would be to log on to the Revenue website, said Finance Minister Michael McGrath. Self-assessed taxpayers will be able to claim the relief from mid-February.
Mr McGrath said: “The Government is acutely conscious of the impact increases in interest rates have had on many mortgage holders. In light of this, I introduced a temporary one-year, targeted mortgage interest tax relief scheme as part of Budget 2024.”
People on tracker rates, those on variables and people unable to fix because their mortgage was sold to a vulture fund are expected to benefit from the temporary tax credit.
PAYE workers do not generally have to submit a tax return but Revenue is increasingly trying to get all taxpayers to file returns.
Marian Ryan, consumer tax manager with Taxback.com, said: “There will be some people – particularly PAYE workers who have never had a reason to file a return before – who will be daunted at the prospect of filing a tax return and who will lose out on the mortgage interest relief they are entitled to.”
The relief applies to those with a mortgage of €80,000 to €500,000 at the end of last year. It covers changes to mortgage repayments over the course of last year, up to a maximum of €1,250.
Ms Ryan said given that ECB rates were increased 10 times, the relief would put much-needed money back into people’s pockets.
Meanwhile, non-bank lender Finance Ireland is reducing some of its mortgage rates. Cuts of up to 0.45 percentage points are being introduced across its suite of three-year and five-year fixed rate products. However, there is no cut in variable rates, which mortgage holders move on to when they come off a fixed rate.
Source: Charlie Weston, Irish Independent (31/01/2024)
Vacant Property Refurbishment Grant explained: the pros and cons of scheme made famous by ‘Room to Improve’ architect Dermot Bannon
‘Room to Improve’ architect Dermot Bannon. Photo: Mark Condren
Interest in vacant and derelict rural houses has increased massively thanks to the Vacant Property Refurbishment Grant.
In the context of a severe housing shortage, soaring urban rents and the mainstreaming of remote work, the abandoned cottage on a half-acre at the end of a boreen suddenly becomes very attractive as a home, a home office and a place from which to do business.
The grant, which could be expected to play a significant role in reversing rural decline, isn’t yet the game-changer it was expected to be. While it has its success stories, it is widely experienced as bureaucratic and clunky and not quite the gift horse it appears to be at first glance.
With funding of up to €50,000 available for the refurbishment of vacant homes and €70,000 for derelict houses, along with a potential €26,000 SEAI grant, it all makes for an attractive package. It also can provide a welcome route around restrictive local planning conditions.
‘If you have the money, you don’t need the grant and if you need the grant, there’s no guarantee you’ll get the money’
However, according to Roscommon auctioneer Ivan Connaughton, it can leave people in a catch-22 situation.
“The application has to be sanctioned before the work begins and the job must be paid for in its entirety before the council will pay out. The completed work must be in absolute accordance with the schedule of works outlined in the application, otherwise they may not pay out,” Mr Connaughton said.
“So people must have the money in cash, they can’t apply for a loan based on a successful grant application as the bank or credit union has no guarantee the grant will be paid.
“It’s a catch-22, if you have the money, you don’t need the grant and if you need the grant there’s no guarantee you’ll get the money.”
Clare auctioneer David Costelloe agreed and said: “It is very hard to get short-term finance, and this is important in situations like this.”
To qualify for funding, the applicant must own the property, or be in the process of purchasing it.
Planning permission must be obtained for buildings being converted from non-habitable places or vacant for a long number of years, but the granting of this permission is not a given.
Each part of the work covered by the grant has an allocated budget, if the applicant goes over the budget on a particular work, the owners must pay out of their own pockets.
Invoices relevant to the renovation must be submitted to the local authority, which will inspect the property to ensure works are completed.
Funding of up to €50,000 is available for the refurbishment of vacant homes and €70,000 for derelict houses. Photo: Stock image
Nenagh auctioneer Eoin Dillon said one of his customers who was in the process of renovating a house under the scheme decided to forego the grant.
“It would have meant retaining the old walls of the derelict building, which would ultimately have resulted in a poorer house, so he demolished the whole building and forfeited the grant,” he said.
Bureaucratic difficulties aside, the scheme has many upsides for rural areas. It can enable prospective homeowners to circumvent the local needs planning requirement applicable many places.
“It helps non-locals find a home in a place where they are not native,” Mr Costelloe said.
Mr Dillon said: “It is encouraging people to travel and move into new communities.”
Most auctioneers say that the scheme has led to modest price increases, but agree that it hasn’t had a huge price impact.
Auctioneer Brendan Mannix of Castleisland, Co Kerry, said: “While it has certainly brought more properties on to the market, the grant simply means that these are more saleable, but they are not worth more.”
He does not believe it will have an impact on the bulk of vacant and derelict properties. “We live in a very rich society where people can afford to sit on property and not sell it,” he said.
‘Houses that were being ignored and left to rot are now attracting attention’
According to Tom Crosse of GVM Limerick, the grant is absorbed by the rise in building costs, “but it has been a help in farm sales”.
“If a farm is being sold with an old house in the corner of a field, a prospective owner might buy on the strength of there being a ready market for that site with the old building,” he said.
Mr Connaughton said the grant is undoubtedly increasing and improving the housing stock.
“Houses that were being ignored and left to rot are now attracting attention. If something could be done about staged payments for the various phases of renovation, the grant scheme would be far more user-friendly,” he said.
Mullingar auctioneer Padraic Murtagh said while it provides a cushion against rising building costs, the scheme is also having a positive impact on the housing stock and the rural environment.
“It is revitalising the countryside and improving the landscape.
“It also gets around the local needs criteria and if the property is located on the outskirts of a town or village it is not subject to the ribbon development restrictions.
Terms and conditions:
Funding of up to €50,000 is available for the refurbishment of vacant homes and €70,000 for derelict houses.
To qualify for funding, a house must have been built before 2008 and left vacant for at least two years. An SEAI grant of around €26,000 can be used to improve energy efficiency.
The applicant must own the property, or be in the process of purchasing it. Planning permission must be obtained for buildings being converted from non-habitable places or vacant for a long number of years. Approval for the grant must be obtained from the local council before works commence.
Each service covered by the grant has an allocated budget, if the applicant goes over budget on a particular work, the owners must pay out of their own pockets. Invoices must be submitted to the local authority, who will inspect the property to ensure works are completed.
The grant can be used to refurbish an eligible property either as a primary residence or as a rental property. If the grant is obtained to refurbish a rental property, the applicant must register the property with the RTB and may be subject to additional inspections during the renovation.
If the property is sold or unavailable to rent within 10 years, the applicant must repay the local authority.
Similar rules may also apply to grants given to houses renovated as primary residences. If the applicant sells or rents it out within 10 years, the local authority must be repaid. If these terms are broken in less than five years, the full amount must be repaid. If they are broken in more than five years but less than 10, 75pc of the grant must be repaid.
Source: Irish Independent (Jim O’Brien) 22nd January 2024
How much funding can I get and are there any costs?
Can I buy back the equity share in my home?
What is the process for buying back the equity share?
Situations when I have to pay off the equity share
How do I apply for the First Home Scheme?
What is the Tenant Home Purchase Scheme?
Useful information
What is the First Home Scheme?
The First Home Scheme (FHS) is an affordable housing scheme, which supports you to buy a new home or to build your first home.
The FHS is a shared equity scheme. This means that the government and participating banks pay up to 30% of the cost of your new home in return for a stake in the home. If you want, you can buy back the stake at any time, but you don’t have to.
Who can access the First Home Scheme?
The scheme is available nationwide for:
First-time buyers and certain other people who want to buy a new home
People who want to build their first home on their own site, and certain other people who want to build a new home. (The scheme was extended to people building their own new homes in September 2023.)
People who want to buy the home they are renting because their landlord is selling the property. This version of the FHS is known as the Tenant Home Purchase Scheme.
Do I qualify for the First Home Scheme?
To qualify for the First Home Scheme, you must meet certain criteria.
1. You must be a first-time buyer or ‘fresh start’ applicant buying or building a new home
You are a first-time buyer if:
You have not previously bought or built a property to live in.
You do not own or have an interest in any property in Ireland or abroad.
You will not qualify as a first-time buyer if you have owned a home abroad or have previously inherited a home.
You are a ‘fresh start’ applicant if youpreviously owned a home, but you no longer have a financial interest in it because:
You are now divorced, separated, or your relationship has ended
You have gone through personal insolvency or bankruptcy
If you are buying or building the property with someone else, they must also be a first-time buyer or fresh start applicant.
2. You must be over 18
To qualify you must also be over 18 and have the right to live in Ireland.
3. You must live in the property and it must be new
The scheme only applies if you are buying or building the property as your home. You must live in it as your only place of residence.
If you are buying a property, it must be a newly-built home in a private development.
If you are building your own home:
The property must be built on a site that you own or are buying
The property must be a detached or semi-detached house
The build must be managed by you or a contractor
The scheme does not cover second-hand homes, unless your landlord is selling the property you are renting and you want to buy it.
4. Your home must be within the price limits for your area
Your new home must cost less than the price limit for your local authority area. These limits are different depending on where you buy or build your home. The limits are also different if you are buying a house or apartment.
The limits are linked to the average price for first-time buyers in each area. They are reviewed regularly and changed if needed. You can find the current limits in the table below, or on the FHS website.
Local authority area
Price limits for buying
Price limits for building
Cork City, Dublin City, Dún Laoghaire-Rathdown, Fingal, South Dublin
€475,000 for houses and €500,000 for apartments
€475,000
Limerick City and County
€400,000 for houses and €450,000 for apartments
€400,000
Waterford City and County
€375,000 for houses and €450,000 for apartments
€375,000
Co Wicklow
€475,000 for all properties
€475,000
Galway City
€450,000 for all properties
€450,000
Co Cork, Co Kildare, Co Meath
€425,000 for all properties
€425,000
Co Galway
€400,000 for all properties
€400,000
Co Kilkenny, Co Laois, Co Louth, Co Westmeath
€375,000 for all properties
€375,000
Co Clare
€350,000 for all properties
€350,000
Co Carlow, Co Cavan, Co Donegal, Co Kerry, Co Leitrim, Co Longford, Co Mayo, Co Monaghan, Co Offaly, Co Roscommon, Co Sligo, Co Tipperary, Co Wexford
€325,000 for all properties
€325,000
Note: Duplexes fall under the house price limits.
5. Your mortgage must be with a participating lender and you must have a deposit
Your mortgage must be with a lender that is participating in the scheme. Participating lenders currently include Bank of Ireland, Permanent TSB and Allied Irish Bank which includes AIB, Haven Mortgages and EBS.
You must borrow the maximum amount available to you from one of these lenders. Under Central Bank rules, the limit for mortgage borrowing for first-time buyers is 4 times your gross annual income. If you are a non-first-time home buyer, the limit is 3.5 times your gross annual income.
If you are getting a Macro Prudential Exception (MPE) with a participating lender you will not qualify for the FHS. An MPE is when your lender lets you borrow above the Central Bank limits. Lenders have flexibility to do this for a certain percentage of the mortgages they provide.
You must have a deposit of at least 10%. If you are buying, this is 10% of the property’s purchase price. If you are availing of the Help to Buy Scheme, this can contribute towards the deposit you need.
If you are building your home, this is 10% of the build cost. You can use the equity in your site to contribute to the deposit if you are building your home.
There is an eligibility calculator on the First Home Scheme website to help you see if you qualify.
How much funding can I get and are there any costs?
The First Home Scheme is a shared equity scheme. This means you get funds from the scheme in return for a percentage ownership of the property. You can buy back this percentage if and when you want. If you do then you will fully own the home.
You can get up to 30% of the market value of your new property with the First Home Scheme. This is reduced to 20% if you are also getting the Help to Buy Scheme. The minimum amount you can get is 2.5% of the property purchase price, or €10,000, whichever is higher.
Are there any charges?
There is no charge for the First Home Scheme for the first 5 years that you own your home. But, if you have not bought out the FHS equity share in your home by the sixth year, a service charge will apply. This service charge is for the maintenance of the First Home Scheme. It is a percentage of the amount the FHS paid when you bought the home. The service charge amounts increase the longer you stay in the scheme. They are:
1.75% for years 6 to 15
2.15% for years 16 to 29
2.85% for years 30 and over
These rates are fixed for the life of the equity facility.
You can pay the service charge annually or in monthly instalments. If you can’t afford the service charge you can pay a reduced amount, pause the payments for a set amount of time or defer them altogether.
There is no additional cost for deferring the service charge, but it will eventually need to be paid. For example, it will need to be paid if you want to pay back the equity share, to sell the home or if you die.
Can I buy back the equity share in my home?
You can buy back the equity share in your home at any time. But you don’t have to.
You can buy back the full equity share in one payment, or pay it back partially as you can afford to. However, the minimum amount you can pay back is 5% of the original equity amount and you can only make 2 partial payments a year.
The equity share in your home is a percentage of the market value of your home. So, if property prices increase, the amount you have to pay back will increase.
For example, if you bought your property in 2022 for €300,000 and the FHS provided equity of 10% or €30,000 and you want to buy back the equity share in 2025 when the property is valued at €350,000, you will have to pay 10% of this, which is €35,000.
What is the process for buying back the equity share?
If you want to buy back some or all of the FHS equity share in your home, you must get your home valued. The valuation must be completed by an FHS Approved Valuer and you will pay for this. You can find a list of FHS Approved Valuers on the FHS customer portal. The valuation is valid for 12 months.
You send this valuation report to the FHS and ask them for a ‘redemption quote’. The redemption quote will tell you how much it will cost you to pay off some or all of the FHS equity in your home.
This redemption quote is based on the valuation you get. If you built your own home, the value of your site is discounted from the property value when the redemption payment is calculated.
You must provide a number of supporting documents when you pay this off. The First Home Scheme website has information on what you need.
What if I don’t agree with the valuation?
If you don’t agree with the valuation provided, you should contact the FHS to get a second valuation. If you don’t agree with the second valuation, the FHS will get an independent assessment of your home’s value. This valuation is binding.
What if I add value to my home?
If you make a material change to your home that increases its market value, this increase will not be taken into account when valuing your property. For example, if you extend your home, the increase in the value of the home this brings will be excluded from the valuation. The First Home Scheme website has more information about what is considered a material change.
Situations when I have to pay off the equity share
If I sell my home or rent it out
If you sell or rent out your home, you must pay off the FHS equity share in your home and any outstanding service charges. You must pay off the equity share in any situation where the home is no longer your primary residence. However, you can stay in the scheme, if you want to rent out a room in your home while you live there.
If I switch mortgage provider
You can switch your mortgage to another lender in the scheme without having to pay off the equity share. However, if your new mortgage provider is not part of the scheme, you will have to pay off the equity share and any charges.
If I die
If you die, or for joint applicants, when the last applicant dies, the equity share must be paid off.
How do I apply for the First Home Scheme?
You apply online for the First Home Scheme. If you cannot apply online or need help filling out the form, contact the FHS and they will help you.
There are a number of steps to the FHS process:
Check you qualify: use the FHS eligibility calculator to check if you qualify.
Get mortgage approval in principle: you need to get mortgage approval from a participating lender to apply.
Apply online: you need to give some personal details as well as information about the property you want to buy and the details of your solicitor. You also need to provide:
Mortgage approval in principle
Photo ID for everyone applying
Proof of address (this must be dated within the last 6 months)
An estimate of how much it will cost to build your home, if you are building the property.
Have your application assessed: your application and documents will be reviewed by the FHS.
Get your eligibility certificate: if you qualify for the scheme, you will get an FHS eligibility certificate. This gives you an estimate of how much equity you can get from the FHS. Give the certificate to your mortgage lender to include in your mortgage application.
Get mortgage approval: get mortgage approval from your lender. They will give you a mortgage letter of offer.
Upload letter of offer to customer portal: upload your mortgage letter of offer to the FHS website along with any other documents needed. If you are building your own home, you will also need to provide a certified build cost from a qualified architect, engineer or quantity surveyor.
Get your FHS customer contract: if your FHS application is approved, you and your solicitor will get a hard-copy of your customer contract for the equity share. This is a legal contract between you and the FHS, which must be signed by you and witnessed by your solicitor.
Get your FHS funds: your solicitor will send the signed customer contract and other forms to the FHS. If you are buying your home, the FHS will then transfer the funds to your solicitor’s account, so they can complete the purchase of your home in line with the mortgage process. If you are building your home, you have 12 months from when you sign the contract to draw down the funds to your solicitor’s account and 24 months from draw down to complete the build of your home.
What is the Tenant Home Purchase Scheme?
The Tenant Home Purchase Scheme is an extension of the First Home Scheme. It expands the FHS so you qualify if your landlord is selling the property you are renting and you want to buy it.
The Tenant Home Purchase Scheme is slightly different to the FHS because you can buy a second-hand home (your rental home) and the FHS is only available for new homes. This also means you will not qualify for the Help to Buy Scheme, which only applies to new homes.
You must have a valid notice of termination to qualify for the Tenant Home Purchase Scheme. You must send a copy of this and your mortgage approval in principle when you apply.
Apart from these minor differences, all the other requirements and qualification criteria for the FHS apply to the Tenant Home Purchase Scheme.
You apply for the Tenant Home Purchase Scheme online on the First Home Scheme website.
You can find more information about the Tenant Home Purchase Scheme on firsthomescheme.ie.
Useful information
The First Home Scheme website has detailed information about the scheme, including an FAQ and eligibility calculator. They also have a number of guides about the scheme, including:
Your Guide to the First Home Scheme (pdf)
Your Guide to the Self Build Product (pdf)
Your Guide to the Tenant Purchase Scheme (pdf)
If you have questions about the scheme, you contact First Homes Scheme for more information.
First Home Scheme
Block C Maynooth Business Campus Maynooth Co Kildare W23 F854
There is a Local Authority Affordable Purchase Scheme, which is similar to the First Home Scheme. With this scheme the local authority buys a stake in your home instead of the banks. However, this scheme only applies in certain areas.
Record high €8.8bn first time buyer mortgages approved in November
First-time buyers represented more than 61 per cent of the total volume of mortgages during November.
30,550 first-time buyer mortgages were approved in the 12-month period up to the end of November. Picture: Getty
The number of first-time buyers being approved for mortgages hit historic levels at the end of last year, new data from the Banking & Payments Federation Ireland (BPFI) has shown.
The trend has come amid an overall slowdown in mortgage activity. In November 2023, a total of 4,202 mortgages were approved, which represented a year-on-year decline of 22.7 per cent and month-on-month decrease of 1.7 per cent.
First-time buyers represented more than 61 per cent of the total volume of mortgages during the month, which meant that 30,550 first-time buyer mortgages were approved in the 12-month period up to the end of November.
Brian Hayes, chief executive of the BPFI, said approvals mean first-time buyers’ mortgages “reached historic highs once again” valued at more than €8.8 billion.
“The highest volume and value since the series began in 2010. This reflects sustained upward first-time buyer trends throughout most of 2023,” he said.
“The values of first-time buyer approvals rose by 8.6 per cent reflecting higher housing prices as the average first-time buyer mortgage value reached €294,836, some €19,000 more than in November 2022 (€275,957) and the second highest value recorded since our data series began.”
Hayes added that in the coming months, there may be a “moderation in the growth” of first-time buyer approvals.
The latest figures from the BPFI Mortgage Approvals Report for November 2023 showed the overall value of mortgage approvals fell by 0.5 per cent month-on-month and declined by 19.4 per cent year-on-year.
The total value of mortgages approved in November was €1.208 billion, with first-time buyer accounting for €759 million of that amount. Mover purchasers represented €317 million, or 26.2 per cent, of the total.
Re-mortgage and switching activity in the mortgage market decreased by 75 per cent in volume terms year-on-year.
Hayes said the wider slowdown in the mortgage market has been largely driven by lower switching levels.
“However, mortgage activity has remained very strong in the past year with 50,470 mortgages valued at almost €14.4 billion approved in the twelve months ending November.”
