Mortgage Credit Guidelines

The information provided can be used to assist you in your initial assessment of your customer’s mortgage application.

Customer Eligibility

  • Minimum applicant age is 18 years
  • Maximum age (of eldest applicant in the case of joint applications) at maturity of the mortgage is 70. This maximum age should be reviewed to ensure it is appropriate taking the customer’s individual circumstances into account. Where a mortgage extends beyond normal retirement age, an applicant should be able to demonstrate continued ability to service the loan e.g. by way of a pension
  • Only stable employment and sustainable earnings should be taken into account for the credit assessment. We need to ensure that the customer will have sufficient income available to meet their mortgage repayment today and into the future.

Loan to Value

  • Up to 90% for Owner Occupiers (based on the lower of the purchase price or valuation)
Central Bank of Ireland Loan to Income and Loan to Value limits will also apply

Term

  • For Owner Occupiers, terms from 5 years to 35 years are available for First Time Buyers, Movers and Switchers, to a maximum age of 70 (see Customer Eligibility above)

Applicant’s Personal Contribution

  • The source of funds for the applicant’s personal contribution to the property purchase must not be from a borrowed source e.g. Credit Union loan cannot be used as a source of funds.
  • Savings should be evidenced by way of regular accumulation over a 6 to 12 month period into a bank account
  • Lump sums lodged as part funding should be queried and the source established
  • Where a borrower’s contribution is coming from a third party e.g. a parental gift, a gift letter will need to be completed by the third party confirming that the third party makes no claim on the property and the gift does not need to be returned. Consideration will need to be taken of any gift tax liability that may arise on foot of a gift.

 

Evidence of Income

 

PAYE

  • Two consecutive pay slips dated in the past three months
  • Salary Certificate completed using the standard Bank of Ireland template
  • Most recent P60 may be required

Self Employed

  • Most recent 2 years certified/audited accounts and most recent management accounts
  • Business account statements for the most recent trading period
  • Other documents may be required if the applicant’s business is not established for a full 2 years or if they are a sole trader or self-assessed

Bank Statements (required for non-Bank of Ireland account holders)

  • Most recent 6 months original or full internet current account statements
  • Most recent 12 months savings account statements
  • Satisfactory existing lender statements

Calculating Gross Annual Basic Pay from Payslips

Frequency of salary Calculation of Annual Gross Income
Weekly Multiply by 52
Fortnightly Multiply by 26
Four weekly Multiply by 13
Monthly Multiply by 12

Cross check the gross annual basic pay figure noted on the Salary Certificate and P60 (where provided) with the payslip. This is done by dividing the year to date (often annotated YTD) cumulative pay figure on the most recent payslip, by the pay cycle e.g. week 35/ month 10. Multiply this figure by 52 (if paid weekly), 26 (if paid fortnightly) etc. If there is a material discrepancy between the figures this should be discussed with the applicant and explained in the application notes.

 

Other Information that may be required

 

  • If the Bank cannot verify customer financial commitments through the applicant’s current account e.g. current Mortgage repayment, Credit Union loan, any external borrowing etc., you must ask the customer to confirm how these payments are made and evidence the payments.

Security

  • Properties taken as security must be located in the Republic of Ireland (ROI).
  • Bank of Ireland’s interest in the property will be secured by way of a first legal charge over the property being financed.
  • A valuation of the security property is required, and must be carried out by a professional Valuer from the Bank of Ireland residential valuation panel.
  • Adequate fire cover either in the joint names of Bank of Ireland and the borrower or with the interest of Bank of Ireland noted is required. Life cover for the full amount and term of the mortgage, in compliance with CCA 1995, should be assigned to Bank of Ireland.