Refused a mortgage?

If you have recently applied for a mortgage but your application was refused, this could be for a number of reasons:

• Your income is not enough to repay the amount you wish to borrow. There is a general lending limit of 4 times your gross annual income if you are a first-time buyer or 3.5 times your gross annual income if you are a second or subsequent buyer. However, banks have some discretion in relation to this. For more information see the Central Bank of Ireland rules.
• You don’t have the minimum deposit required under the Central Bank of Ireland’s loan-to-value limits. First time buyers, second and subsequent buyers need to have 10% of the property purchase price and buy-to-let buyers need to have 30%.
• You have a poor credit history because you missed repayments or didn’t pay off another loan. It is a good idea to review your credit history before making an application.
• You have a number of current loans or a lot of financial commitments.
• Your age may be a factor. Lenders have an upper age limit they require a loan to be paid off by, typically between 65 and 70. So if you are over 40 years of age and seeking a mortgage with a term of 30 years you may have difficulty getting approval.
• You work on contract, are not permanently employed, your job is at risk or you only recently started in a new job.
• Your bank statements show that you cannot save, manage your money or have excessive gambling habits.
• The lender believes the property you want to buy is overvalued.

If you have had two mortgage applications refused and meet other certain criteria, you may qualify for a Local Authority Home Loan.

If you are having trouble with the mortgage application process it may be helpful to talk to a financial or mortgage adviser.

Last updated on 2 February 2023