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Housing Minister Eoghan Murphy alongside Taoiseach Leo Varadkar. SAM BOAL
Fixed Rate

First-time buyers will be able to get government-backed mortgages

Applicants can choose a fixed rate of interest for the duration of the loan.

A NEW, GOVERNMENT-backed mortgage scheme for first-time buyers has been announced by Housing Minister Eoghan Murphy.

Aimed at prospective homeowners who don’t qualify for social housing, the mortgages available can be used to buy a house valued at up to:

  • €320,000 in the greater Dublin area, as well as Cork and Galway
  • €250,000 in the rest of the country

The mortgages, which will be granted through local authorities, will be available to individual applicants whose annual gross income does not exceed €50,000 and to joint applicants who earn €75,000.

Speaking on RTÉ’s Morning Ireland, Murphy said that the government was determined to increase the stock of social housing, but added:

“It’s important to recognise that there will be people who won’t be eligible for social housing, but still can’t afford to buy a home at the moment.”

This product, he said, was aimed at those people and “doesn’t exist currently in the market”.

Fixed rate 

The new Rebuilding Ireland Home Loan can be used both for new and second-hand properties, or to build your own home.

A person or couple can borrow up to 90% of the market value of the property.

They can choose a fixed rate of 2% to 2.25% interest for 25 to 30 years.

Murphy said in a statement that this would mean “they will have absolute certainty of their repayments over the lifetime of the loan”.

What this means essentially is that a person or couple can purchase a home, while ensuring that they can still keep their monthly repayments to one third of their net disposable income – with no risk of their mortgage rate rising and so no threat to their ability to afford repayments, giving them certainty and security.

Murphy gave two examples of how the scheme would work:

So, for example, a person earning €40,000 a year and living in Mayo could afford to buy a house worth €224,920, provided they had the deposit of €22,400. They could then borrow €198,000 from their local authority and their monthly repayments would be in the region of €858 a month, or 33% of their Net Disposable Income.
As a second example, a couple earning €75,000 and living in Dublin could afford to buy a house worth €320,000, provided they had €32,000 as a deposit between them. They could then borrow €288,000 from their local authority and their monthly repayments would be €1,221, or 24% of their Net Disposable Income.

€200 million is being made available for the first tranche of mortgages, which, it’s hoped, will provide about 1,000 loans, Murphy said.

The scheme will be available from councils around the country from Thursday 1 February.


To qualify for the scheme, would-be buyers need to have had knock-backs or offers of insufficient funding from two different lenders.

Investec analyst Owen Callan wrote that the mortgages were effectively targeted at “sub-prime mortgage borrowers”, but the plan would be an “additional tool in rounding out access to mortgage financing for the overall market”.

“(The scheme) seems designed to not compete directly with the banks, given the need for refusals of mortgage financing in order to qualify for the scheme,” he said.

However, we would stress again that a lack of supply of new housing stock remains the biggest impediment for buyers seeking to purchase a home, not access to or the cost of mortgage financing.

The website for the scheme is now online.

- with reporting by Peter Bodkin 

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