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Rebuilding Ireland Home Loan Making home ownership more affordable for first time buyers

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Page 1: Rebuilding Ireland Home Loanrebuildingirelandhomeloan.ie/uploads/files/pdf/Rebuilding Ireland... · 2 Rebuilding Ireland Home Loan The information contained in this Booklet is not

Rebuilding Ireland Home Loan1

Rebuilding Ireland Home LoanMaking home ownership more affordable for first time buyers

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The information contained in this Booklet is not intended to nor does it constitute an offer or solicitation of investment, financial or other services. Unless otherwise stated, residents of the Republic of Ireland only, are invited to apply for the loan products. Users of this Booklet should note that the Rebuilding Ireland Home Loan is provided subject to separate specific terms and conditions of business which are available from your local authority.

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The Rebuilding Ireland Home Loan is a new Government backed mortgage for first time buyers. It is now available nationwide from all local authorities.

As a first time buyer you can apply for a Rebuilding Ireland Home Loan to purchase a new or second-hand property, or to build your own home.

The loan is a normal Capital and Interest-bearing mortgage which is repaid by direct debit on a monthly basis.

You can borrow up to 90% of the market value of a property.Maximum market values of a property to be purchased or, in the case of a self build property, the total build costs are:

€320,000 in counties Cork, Dublin, Galway, Kildare, Louth, Meath and Wicklow, and

€250,000 in the rest of the country.

What is a Rebuilding Ireland Home Loan?

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To qualify for a Rebuilding Ireland Home Loan you must:

Be a first-time buyer. Be aged between 18 and 70 years. Be in continuous employment for a minimum of two years,

as a primary applicant. Be in continuous employment for a minimum of one year, as a secondary applicant.

Have an annual gross income of not more than €50,000 as a single applicant, or not more than €75,000 combined as joint applicants.

Submit two years certified accounts if self-employed. Provide evidence of insufficient offers of finance from

two banks or building societies. Not be a current or previous owner of residential property

in or outside the Republic of Ireland. Occupy the property as your normal place of residence. Purchase or self-build a property situated in the Republic

of Ireland, of no more than of 175 square metres (gross internal floor area).

Purchase or self-build a property which does not exceed the maximum market value applicable for the county in which it is located.

Consent to an Irish Credit Bureau search.

Am I eligible?

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If you choose a fixed interest rate product:Your monthly repayments remain the same for the full loan term, making budgeting easier - but you may be liable for a breakage fee if you switch to a variable rate or pay off all or part of your mortgage. (See the Frequently Asked Questions section on page 6, for more details on breakage fees).

If you choose a variable interest rate:You have the flexibility to make lump sum repayments, increase your repayments or make early repayments - but your monthly repayments could rise or fall over the life of your mortgage.

A Rebuilding Ireland Home Loan offers three rate products: 2%* fixed for up to 25 years (APR 2.02%*). 2.25%* fixed for up to 30 years (APR 2.27%*). 2.30%* variable (subject to fluctuation) for up to

30 years (APR 2.32%*).* These rates, while correct at time of print, are subject to change and dependent on market

conditions.

All rates are exclusive of Mortgage Protection Insurance (MPI), which is a requirement of borrowing. Eligible borrowers are required to partake in the Local Authority collective MPI Scheme. MPI is payable monthly, in addition to loan repayments.

What are my interest rate options?

You should seek independent financial advice on which product is most suitable for you.

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How much can I borrow?With the Rebuilding Ireland Home Loan, you can borrow up to 90% of the market value of a residential property. Maximum market values of the property that can be purchased or self-built are:

This limits the amount that can be borrowed to no more than €288,000 in counties Cork, Dublin, Galway, Kildare, Louth, Meath and Wicklow and no more than €225,000 in the rest of the country.

A Home Loan calculator is available on www.rebuildingirelandhomeloan.ie which will give you an indication of how much you can borrow and the estimated repayments.

€250,000 in the rest of the country

€320,000in counties Cork, Dublin , Galway, Kildare, Louth,

Meath and Wicklow

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How do I apply?

If you think you are eligible and can afford the repayments on the amount you need to borrow, you can complete the Rebuilding Ireland Home Loan application form - available from your Local Authority or download from www.rebuildingirelandhomeloan.ie

You must complete all sections of the application form and provide the supporting documents described in the applicant checklist.

Your application form must be signed by all applicants and submitted to your local authority. Applicants are strongly advised to submit their applications in person, as posted applications are often not completed correctly and have to be returned.

Your application will be assessed and you will be advised of the decision in writing.

Further information is available at any of the following:

Housing Section of your Local Authority Help Desk at 051 349720 www.rebuildingirelandhomeloan.ie

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Who can apply for a Rebuilding Ireland Home Loan?The Rebuilding Ireland Home Loan is available to first time buyers who meet all of the following conditions:

Aged 18 years - 70 years.

For single applicants:• earning a gross income of less than €50,000, and• in 2 years continuous employment (including self-employment).

For joint applicants:• earning a combined gross income of less than €75,000, and• the primary applicant must be in 2 years continuous employment (including self-employment), with the second applicant in 1 year continuous employment (including self-employment).

Applicant(s) must have received insufficient offers of finance from two mortgage lenders.

Satisfies other conditions and/or requirements, as stipulated by the Local Authority.

Am I eligible if I am not a first-time borrower?No.

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Frequently asked questions

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Are there different maximum borrowing limits for Dublin and other areas?Yes, borrowing limits are higher in Dublin, Kildare, Louth, Meath, Wicklow, Cork and Galway, to reflect the more expensive property markets in those areas.

How much can I borrow?The maximum loan amount under the Rebuilding Ireland Home Loan is limited to 90% of the market value of a purchased property or the total build costs of a self build property. For properties in Dublin, Kildare, Louth, Meath, Wicklow, Cork and Galway: maximum loan amount is €288,000. For the rest of the country: maximum loan amount is €225,000. The maximum loan amount is also limited by a Net Income Ratio, which is used to calculate how much you can afford to borrow and repay.

What type of property can I purchase?The Rebuilding Ireland Home Loan is only available for financing a Principal Private Residence (PPR) for the following purposes:

To purchase a new, second-hand or new-build property. Where the gross internal floor area of the property does

not exceed 175m2. The property complies with planning and building regulations. The property is located in the Republic of Ireland.

What is a fixed rate mortgage?A fixed rate mortgage is a loan where the interest rate stays the same throughout the agreed period of “fixing” and is repaid by an annuity of principal and interest, combined, at monthly intervals.

What are the advantages of a fixed rate on my mortgage?The main advantages of a fixed rate on your mortgage are that your interest rate charged is not subject to market fluctuation and your loan repayment amounts are unchanged over the life of the mortgage.

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Can I repay a fixed rate mortgage early?Yes. However, paying back a loan before the end of its term may seem like a great idea, but you need to be aware that a fixed rate loan may have a breakage fee associated with paying off the balance early. No early breakage fees apply on the variable rate option.

How are breakage fees calculated on the early repayment of my fixed rate mortgage?Breakage fees will only apply if the Local Authority (LA) cost of funds rate, applicable on the date of breaking the Fixed Rate Loan Agreement, is LESS than the original LA cost of Funds rate on drawdown of your loan.

Example

A borrower took out a 25-year fixed mortgage at a rate of 2.00% on 1st February 2018. On 1st February 2033 (with 10 years remaining), the mortgage outstanding was €90,000 and the borrower opts to break out of the fixed rate. The breakage cost calculation is:

Amount [A] = €90,000

Original LA cost of funds on 1st February 2018 [B] = 1.50%

Interest rate for LA cost of funds for remaining term of 10 years on 1st February 2033 [C] = 1.25%

Remaining term in days [T] = 3,652 days

Breakage Calculation = (A x (B-C) x T) divided by 365 = (€90,000 x (1.50%-1.25%) x 3,652)/365 = €2,251.23. Therefore, in this case the borrower would be charged a breakage fee of €2,251.23.

The same principal, in the example above, applies if you break out of a portion of your Fixed Rate Loan Agreement, i.e. partially repay your loan.

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How long is a Rebuilding Ireland Home Loan letter of offer valid for?A letter of loan offer is valid for a period of 6 months from date of issue, subject to the terms and conditions contained therein. However, the interest rate is determined on the date of drawdown of the loan, and this may change within the 6-month valid period.

Can the Help-To-Buy scheme be used towards a deposit? Yes, the Help-To-Buy (HTB) scheme can be used towards a deposit. Your HTB Application number and HTB access code must be provided as part of the loan application. Full details on the Help-To-Buy scheme are available from www.revenue.ie.

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