Topic: Mortgages October 22, 2019
Author: Neil Cubley

Saving for a mortgage deposit

Bank of Ireland Mortgagesaver4 MIN READ

Saving for a mortgage is a big challenge for first-time buyers.

The average asking price for a home increased by 3.7%, to €263,000, in the 12 months to June 2019, according to a report by Daft.ie.

First-time buyers looking to save the 10% mortgage deposit for an average home now have to find up to €34,000 in Dublin city, Galway city €30,000, Cork city €28,000, Limerick €20,000, and in Sligo and Donegal roughly €15,000.

Barry and Sthef

‘Do you remember when they used to give away the free newspapers on the street? That was my first job in Ireland,’ says Sthef.

Barry and Sthef met outside Connolly Station in Dublin one day.

‘I walked by a few times and took a paper and we just got talking,’ Barry says.

That was 12 years ago.

At the time, Sthef could hardly speak any English.

‘Just, ‘Hello. Good morning. Free Herald! Thank you.’ That was it,’ she says and laughs.

Sthef’s originally from Brazil and her name is spelled, ‘S-T-H-E-F-A-N-Y. It’s different,’ she says.

Her dad is Japanese and her mum is Brazilian.

‘I was born in Brazil then went to Japan and lived there until I was 10.

Then I went back to Brazil and I moved to Ireland when I was 16.’

In contrast to Sthef’s journey from South America to Asia to Europe, Barry’s home life is more straightforward.

‘I’m just from Dublin and I’ve lived here all me life. I’ve grown up here. So nothing too interesting,’ Barry says.

But that doesn’t mean that he hasn’t ended up in some interesting places.

Barry is in the Defence Forces based in Cathal Brugha Barracks in Rathmines and he’s completed three tours overseas.

‘I went twice to Lebanon and once to Syria.’

Saving for a mortgage

Barry and Sthef have been living in Barry’s family home for around 2 years.

His sisters and brother moved out long ago and have already bought their houses.

Now Barry and Sthef are saving for a mortgage so they can move into a home of their own.

Staying in Ireland

Barry and Sthef toyed with moving abroad.

‘I know a lot of foreign nationals think property in Ireland is too expensive,’ Sthef says.

‘Because for the price that you would buy an apartment here, you could buy a house over in Brazil, Italy or Portugal.’

In the end they decided to stay in Ireland.

Use the Bank of Ireland mortgage calculator to work out how much you can borrow and what the repayments would be.

Saving for a mortgage and getting mortgage-ready

Obviously, it takes time to save for a mortgage.

Saving enough for a deposit on an average home in 2 years, for example, means putting away between €625 a month (Sligo and Donegal) and €1,416 a month (Dublin city).

While saving it over 3 years would mean stashing away between €416 and €944 a month.

‘We try to save hard for three weeks of the month,’ Barry says, ‘and then relax for a week.

When we’re saving there’s a lot of staying in and watching Netflix.’

The couple say they started saving seriously over 18 months ago now, and they’ve nearly saved up the deposit now in their Bank of Ireland MortgageSaver.

They’ve already checked their credit ratings on the Central Credit Register and the Irish Credit Bureau…

…to make sure that their credit profiles are okay.

And they have all their mortgage application paperwork ready to go so they can apply for mortgage approval in principle when the deposit is saved.

Thinking of the future

Sthef thinks buying a home is about the future ‘it’s mainly for future, if we’re having kids.’

And, as part of their preparations for buying their first home, she’s decided to apply for Irish citizenship something that she has been putting off.

‘I should have applied ages ago,’ she says. ‘But, because of the cost, I just put it off.’

Once they have the deposit saved, however, there should be money to pay for the cost of the application and the Certificate of Naturalisation.

So, if her application is successful, as well as buying a house, here, she may become a citizen of her adopted country.

Find out more

The Bank of Ireland MortgageSaver account has been designed to help first-time buyers save for a deposit.

With MortgageSaver, you get €2,000 bonus interest on your savings when you draw down your Bank of Ireland mortgage.

Terms & conditions apply.

Bank of Ireland Mortgage Bank trading as Bank of Ireland Mortgages is regulated by the Central Bank of Ireland.

The lender is Bank of Ireland Mortgages. Lending criteria and terms and conditions apply. A typical mortgage to buy your home of €100,000 over 20 years with 240 monthly instalments costs €615.79 per month at 4.2% variable (Annual Percentage Rate of Charge (APRC) 4.3%). APRC includes €150 valuation fee and mortgage charge of €175 paid to the Property Registration Authority. The total amount you pay is €148,114.60. We require property and life insurance. You mortgage your home to secure the loan. Maximum loan is generally 3.5 times gross annual income and 80% of the property value (90% of the property value for first time buyers). A 1% interest rate rise would increase monthly repayments by €54.02 per month. The cost of your monthly repayments may increase – if you do not keep up your repayments you may lose your home.
At the end of a fixed rate period, existing customers on a fixed rate can choose from our range of fixed rate options available to existing customers or roll to the prevailing Loan to Value Variable rate.

Cashback is not available with the High Value Mortgage fixed interest rate.

Warning: The cost of your monthly repayments may increase.

 

WARNING: If you do not keep up your repayments you may lose your home.

 

WARNING: You may have to pay charges if you pay off a fixed–rate loan early.

 

WARNING: If you do not meet the repayments on your loan, your account will go into arrears. This may affect your credit rating, which may limit your ability to access credit in the future.

Barry and Sthef received a small gratuity for their time.
Topic: Mortgages October 22, 2019
Author: Neil Cubley

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