Mortgage Myths Busted

Check out the top 8 mortgage myths busted.  

Myth 1: My rent is not taken into consideration when I apply for a mortgage

On the contrary, your rent is taken into consideration when you are being assessed for a mortgage. It shows us what you might be able to afford in mortgage repayments and also demonstrates to us your repayment capacity.

Myth 2: I have to wait until I find a property before I can apply for a mortgage

No, you don’t have to wait until you find a property before applying for a mortgage. At Bank of Ireland we have ‘House-Hunter’ mortgage approval which is approval in principle for a mortgage amount even before you’ve found a suitable property. This approval in principle lasts for 6 months. This enables you to start your house hunt with confidence.

Myth 3: It costs more to buy than rent

This isn’t necessarily true. The most recent Daft rental report covering the second quarter of 2018 showed that the average rent nationally was €1,304, up 12.4 per cent on the same quarter in 2017. The size of the property and location has to be taken into account; if you talk to us about a mortgage you might find that your loan repayments could be lower than the rent you’re paying.

Myth 4: You have to be a bank customer before you can apply for a mortgage

You don't have to be a Bank of Ireland customer to apply for a mortgage with us. You will need to provide ID documents for all parties to the mortgage – generally a valid Passport or Driving licence, and a utility bill (less than 6 months old) to confirm your current permanent address, and bank statements, but being an existing customer isn't a requirement!

Myth 5: Banks do not want to lend to single people

This isn't true. The amount an applicant can borrow is based on a number of factors including your income, rent you're currently paying and how much you have saved. Our mortgage specialists will be delighted to support you on all aspects of your mortgage application.

Myth 6: If I fix my mortgage, I will not be able to overpay at all should I have some spare cash

This is untrue. You can overpay a maximum of 10% of your monthly repayment, so for example if your monthly mortgage repayment is €1,000, then you can overpay €100 extra a month which will save you interest. Alternatively if you’re thinking of a lump sum payment, you can choose a twin rate option. A twin rate mortgage enables you to have one portion of your mortgage on a variable rate and the remainder of your mortgage on a fixed rate. You can decide how much you want to fix and how much you want to have as variable. It could be 80% fixed and 20% variable or 60% fixed and 40% variable.

Myth 7: If my mortgage approval runs out I will have to go through the whole application process again

This isn’t true. If your approval runs out before you’ve found a suitable property to buy, come and talk to us. Extending your approval can be really easy if your circumstances haven’t changed.

Myth 8: I will need at least a 20% deposit for a mortgage

This may not be the case. First Time Buyers only need a 10% deposit, regardless of the value of a property. This means that first-time buyers will be able to borrow up to 90 per cent of a value of a home.

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