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How much deposit do I need to buy my first home?

Baby financial advisor sitting at a table, pondering wearing big glasses.

08 Mar 2017

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You've moved back home to your parents, you've cut back on nights out and you haven't had a holiday in years. Getting a deposit together is the first priority for any prospective home-owner – and more Irish people in their 20s and 30s are getting serious about saving. 

 

 

But how much deposit will you need to get your first mortgage? The answer depends on the price and type of house you're planning to buy. Read on to find out more about how much deposit you will need.

How much will EBS lend for my first home?

EBS will lend up to 90% of the property value in a mortgage (with a max LTV of 75% for a one bed apartment), also on the property type and house value. That means that as a first time buyer you need to come up with a minimum of 10% of the purchase price (as of new Central Bank rules January 2017, there's no capped limit).

For example a first time buyer purchasing a home for €230,000 will require a minimum deposit of €23,000 (10% of the property value).

The bigger the deposit the better

The average first time buyer property price was estimated at €206,000 according to the EBS's latest affordability index. So if you're buying the average home you'll need a minimum deposit of €20,600.

Of course, the bigger your deposit, the lower the interest rate you will pay. New customers borrowing less than 50% of the property's value will get a 0.4% lower interest rate than those borrowing greater than 80%.

That might not sound like much but it adds up. Over a 30-year mortgage for €162,000, the difference in repayments would tot up to nearly €14,000.

Likewise there's a 0.2% difference between borrowing 50%-80% of a property's value. So based on the €162,000 over a 30-year mortgage, you'd save nearly €7,000 over the lifetime of the loan just by getting in under the 80% Loan to Value (LTV) mark.

Start saving

The best thing to do is to save as much as you can for a deposit. Open a regular savings account and make monthly transfers by direct debit so your lender can see you have repayment capacity.

That way you'll build up a tidy sum, while demonstrating a bit of earning power and financial discipline.

And there might be a bit left over to buy some snazzy furniture and fit out your new pad in style!

Thinking of buying your first home?

To find out more about applying for a home loan check out our First Time Buyer and Next Time Buyer Guides.

You can use our mortgage calculator to find out how much you may be able to borrow.

And if you'd like to talk through your mortgage options, book a 30 Minute Mortgage Meeting today!

The content of this blog is expressed in broad terms and is limited to general information purposes only. Readers should always seek professional advice to address issues arising in specific contexts and not seek to rely on the information in this blog which does not constitute any form of advice or recommendation by EBS d.a.c.

EBS d.a.c. neither accepts nor assumes any responsibility in relation to the contents of this blog and excludes all warranties, undertakings and representations (either express or implied) to the fullest extent permitted under applicable law.

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