Home Buyers Guide

Chapter 5: Mortgage Basics

Single Applicants:

Generally speaking, lenders will either work out what you can borrow based on a multiple of your yearly gross
income, or based on your net disposable income (i.e. your income after tax and loan repayments etc).

• 4.75 times – 5 times your annual pre tax income

• 35% - 40% of your monthly net income (your pay after tax) to cover your mortgage AND any other loan
repayments.

• They usually calculate it based on a variable rate mortgage over a maximum of 35 years

• It is stress tested to allow for increases in interest rates.

• Existing outgoings, such as loans will significantly reduce what you can borrow.

• Overtime & bonuses will also be taken into account, usually to a much lesser degree
Joint Applicants:

• Lenders generally calculate what joint applicants qualify for based on their Net Disposable Income.

• 35% - 40% of your monthly net income (your pay after tax) to cover your mortgage AND any other loan
repayments.

• They usually calculate this based on a variable rate mortgage over a maximum of 35 years and it is stress
tested to allow for increases in interest rates.

• Existing outgoings, such as loans will significantly reduce what you can borrow.

To arrange mortgage approval, call independent mortgage advisers Mortgages Direct on 1890 44 66 44 or fill in
an online enquiry (moving.ie/mortgageform.asp)

• Overtime & bonuses will also be taken into account, usually to a much lesser degree

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