Housing Minister Eoghan Murphy will announce details of the new Affordable Mortgage Scheme that is set to offer lower rates than most banks later on today.
First time buyers will be able to get a loan worth up to €288,000 with an interest rate of 2.25% for 30 years under the Government’s latest plan to tackle affordability in the housing market. The interest will be fixed for the duration of the loan.
The Rebuilding Ireland Home Loan, which is likely to save home buyers up to €10,000 over the lifetime of a mortgage, will be run by local authorities from Thursday, 1st February. It will be subject to the same lending rules as ordinary banks, which currently offer first-time buyers interest rates in excess of 3%.
The Government loan can be used both for new and second-hand properties, or to build your own home.
To qualify for this scheme, an individual’s annual gross income cannot exceed €50,000, or in the case of a joint application €75,000.
There will also be a limit on the price of a home that can be bought from the scheme. In the Greater Dublin Area, Cork and Galway, the maximum market value is €320,000. In the rest of the country, it is €250,000.
House hunters looking to avail of the deal must also have had two insufficient offers or refusals for a mortgage from two lending institutions.
Minister Murphy said the scheme would offer buyers “absolute certainty of their repayments over the lifetime of the loan.”
“What this means essentially is that a person or couple can purchase a home, while ensuring that they can still keep their monthly repayments to one-third of their net disposable income – with no risk of their mortgage rate rising and so no threat to their ability to afford repayments, giving them certainty and security,” explained Minister Eoghan Murphy.