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Trading up or trading down

What should you know about trading up or down?

Trading up or down means selling your current home and buying a bigger or smaller one, and it’s important to understand how this affects your mortgage, costs and tax position.  You’ll need to check whether you qualify for a new mortgage under Central Bank loan‑to‑income (LTI) and loan‑to‑value (LTV) rules if you are taking out new borrowing and confirm your mortgage protection can cover the new loan.

Budget for costs like stamp duty, legal fees, valuation, surveys and moving expenses. You should also consider Local Property Tax (LPT) and whether Capital Gains Tax (CGT) applies when selling. Using the CCPC Mortgage comparison tool and Mortgage calculator can help you plan affordability, and getting advice early can help you avoid costly mistakes.

Where can you find guidance for trading up or down?

Trading up or down is a big decision – it means selling and buying a home. If it has been some time since you went through the process, you may want to refresh your memory as to the process and to learn about changes in the property space. These CCPC pages and tools will be invaluable resources for you: 

What should you check about mortgage protection?

Confirm your original mortgage protection policy covers your new mortgage. If your health or age has changed, getting a new policy may be harder or more expensive. Group policies with one bank cannot be transferred to another bank.

What are the Central Bank mortgage rules for trading up or down?

Switcher mortgages and Central Bank rules

If you are switching your mortgage – moving your existing mortgage to a new lender or product without increasing the amount you owe – the Central Bank’s loan‑to‑value (LTV) and loan‑to‑income (LTI) limits do not apply. This is because a switcher mortgage does not involve taking on new borrowing. You will still need to meet the lender’s own lending criteria.

The rules below apply where you are taking out new borrowing, such as when buying a new home and increasing your mortgage amount.

Loan-to-income (LTI):

For second and subsequent buyers of a primary dwelling house, the limit is 3.5 times your gross annual income. Switcher mortgages are exempt from this limit, as you’re not taking on new borrowing beyond your existing balance.

Loan-to-value (LTV):

For new mortgage lending to second and subsequent buyers, the limit is 90% LTV. For example, if you buy a house for €200,000, your lender may lend up to €180,000, and you must fund the remaining €20,000 yourself. Switcher mortgages are also exempt from LTV limits, as you’re simply moving your existing mortgage to a new lender.

What is a switcher mortgage?

A switcher mortgage is when you move your existing mortgage from one lender to another, usually to get a better interest rate or lower fees. You’re not borrowing extra money for a new property, so Central Bank LTI and LTV limits don’t apply.

Central Bank limits

Meeting the Central Bank limits is not a guarantee; lenders will assess your affordability and decide on a case-by-case basis. LTV limits do not apply in the same way if you’re in negative equity and buying a new property, but this does not mean you will automatically qualify for a mortgage. Lenders will still assess affordability and risk on a case‑by‑case basis. For more details, visit the Central Bank Mortgage measures page.

What should you consider when moving to a larger or smaller home?

Think about:

  • Your future needs
  • Location
  • Running costs
  • Accessibility
  • Whether your furniture and belongings will fit comfortably

Do you need to sell your current home before buying a new one? 

Most buyers sell their current home before purchasing a new one, but some use bridging finance to cover the gap. Bridging finance is a short-term loan that helps you buy a new home before you’ve sold your current one. It can be expensive and is not suitable for everyone, so get financial advice before proceeding.

What are the main costs involved in trading up or down?

You’ll need to budget for stamp duty (usually 1% of the purchase price up to €1 million, 2% above that), legal fees, valuation and survey costs, estate agent fees (when selling) and moving expenses. You may also need to pay for repairs or upgrades to your current home before selling. For more on costs, visit our understanding mortgages page.

Are there any tax implications or exemptions when trading up or down?

Stamp duty applies to all property purchases. If you’re trading down and selling your main home, there’s usually no Capital Gains Tax (CGT) due, but check with Revenue for your specific situation. Local Property Tax (LPT) will apply to your new home.

What happens to your Local Property Tax (LPT) when you move?

You’ll need to update your LPT details with Revenue. The seller is responsible for LPT up to the date of sale; the buyer is responsible after that.

How long does the process take and what are the main stages?

The process can take several months. Main stages include: preparing your current home for sale, getting mortgage approval, finding a new home, making offers, exchanging contracts and completing the sale and purchase.

What documents will lenders require?

Lenders typically ask for:

  • Proof of income (payslips, tax returns if self-employed)
  • Bank statements
  • Proof of savings
  • ID 
  • Details of your current mortgage and property

What are the risks of trading down?

Consider whether the new home will suit your lifestyle, if you’ll have enough space, and whether you might regret the move. Take time to plan and view several properties.

How do you avoid common mistakes when buying or selling property?

Get independent legal advice, use reputable estate agents and don’t rush decisions. Review all contracts carefully and budget for all costs.

What happens if your purchase closes before your sale?

You may need bridging finance or to arrange temporary accommodation. Discuss options with your solicitor and lender early in the process.

Are there incentives or supports for trading up or down?

There are currently no specific government incentives for trading up or down. 

What if there’s a “Property chain”? 

A property chain happens when your move depends on other sales and purchases completing first. For example, you may be waiting to sell your current home before you can buy a new one, while your buyer may also be waiting to complete their own purchase. If you are part of a property chain, be prepared for possible delays, as any hold‑up elsewhere in the chain can affect your move.

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