How to Buy a House in Ireland – Step by Step

Buying a house can often feel like an overwhelming and complicated process, especially if you have never purchased property before. Between saving a deposit, getting mortgage approval, finding a home, and completing the legal work, there are many different stages to understand.

Luckily, the process becomes much easier when it is broken down into individual steps.

This guide explains how to buy a house in Ireland, from beginning to save your deposit all the way up to receiving the keys. It also explains mortgages, government support, and the main costs involved in buying a home.

How Do Most People Pay For A House?

Most people do not have enough money to pay the full price of a home upfront.

Instead, they usually:

• Pay part of the price themselves through a deposit
• Borrow the remaining amount from a bank or mortgage lender
• Repay the borrowed money gradually through a mortgage

Each mortgage repayment normally includes:

• Principal: The amount borrowed to purchase the home
• Interest: The additional amount charged by the lender for providing the loan

As the principal is gradually repaid, the amount still owed on the mortgage becomes smaller. This process usually takes between 20 and 35 years.

Essentially:

A mortgage allows you to purchase a home to live in without paying its full price immediately, and then repay the lender over time.

How Much Can You Afford?

Before beginning the house-buying process, you need to understand your budget.

Under the current Central Bank mortgage rules, first-time buyers can generally borrow up to four times their gross annual income. Most homebuyers are also required to provide a deposit equal to at least 10% of the property price. 

For example:

• Annual income: €50,000
• Possible maximum mortgage: €200,000

For joint applicants, both incomes may be considered for the maximum mortgage.

Lenders will also review your monthly expenses, existing debts, employment, and ability to afford the repayments. This means that earning a certain income does not automatically guarantee the maximum mortgage amount.

Step 1: Save Your Deposit

The first major step when buying a house in Ireland is saving a deposit.

Most buyers need a deposit of at least 10%.

For example:

• Property price: €300,000
• Minimum 10% deposit: €30,000
• Mortgage required: €270,000

You should also save additional money for costs that are not included in the purchase price, such as:

• Solicitor fees
  • A solicitor covers the legal work involved in checking the property, reviewing contracts, transferring ownership, and completing the purchase.
• Home insurance
• Moving costs

While saving, try to show a regular monthly savings pattern. Lenders review your bank statements and want evidence that you can manage a future mortgage repayment.

Step 2: Get Approval In Principle

Once you have built your deposit, the next step is getting Approval in Principle, commonly called AIP.

Approval in Principle is an indication of how much a lender may be willing to lend you.

To apply, you will normally need documents such as:

• Recent payslips
• Bank statements
• Proof of savings
• Photo identification
• Proof of address
• Salary certificate

Self-employed applicants will usually need additional business accounts and tax documents.

AIP is not a final mortgage offer. However, it gives you a clearer budget and allows you to begin house hunting.

Many estate agents will also ask for proof of AIP before accepting an offer from a buyer.

Step 3: Check Government Supports

Some first-time buyers may qualify for government support when buying property in Ireland.

The two main schemes are:

Help To Buy Scheme

The Help to Buy Scheme helps eligible first-time buyers with the deposit on a qualifying new-build or self-build home.

Essentially:

Revenue may refund some of the Income Tax you paid during the previous four years.

The refund can then be used towards your deposit. Under the current scheme, the maximum available is the lowest of €30,000, 10% of the property value, or the qualifying tax you previously paid.

First Home Scheme

The First Home Scheme may help when your deposit and mortgage are still not enough to cover the property price.

Essentially:

The scheme may provide some of the missing money needed to purchase the home.

In return, the scheme receives a percentage ownership interest in the property. The scheme can provide up to 30% of the property price, or up to 20% if Help to Buy is also being used. Whenever you have the money available, you are able to buy that percentage of the property from the government in order to have full house ownership.

Step 4: Start House Hunting

Once you know your budget, you can begin searching for a property.

When viewing homes, consider more than just the asking price.

Important factors include:

• Location
• Distance from work
• Public transport
• Number of bedrooms
• Property condition
• Energy rating
• Nearby schools and shops
• Possible repair costs

When deciding how to buy a home, it is important to choose a property you can afford without placing too much pressure on your monthly finances.

Step 5: Make An Offer

When you find a suitable property, you can make an offer through the estate agent.

If your offer is accepted, the property becomes sale agreed.

Step 6: Hire A Solicitor

A solicitor handles the legal side of buying a house.

Your solicitor will:

• Review the sales contract
• Check the legal ownership of the property
• Review planning documents
• Explain the contract to you
• Manage the transfer of funds
• Register the property in your name
• Help arrange a proper valuation and survey of the home
  • Would look for roof damage, cracks, plumbing problems, electrical issues, and any other structural defects

It is a good idea to choose a solicitor early. Having one ready can prevent delays after your offer is accepted.

Step 7: Receive and Sign Your Formal Mortgage Offer

After the lender reviews your documents and the property valuation, it may issue a formal mortgage offer.

This is the final loan agreement showing:

• The amount being borrowed
• The interest rate
• The mortgage term
• The monthly repayments
• The conditions of the loan

Your solicitor will review the offer with you.

Before the mortgage can be released, you will normally also need mortgage protection insurance and home insurance. Once this is all ready to go, you can sign the purchase contract.

Step 10: Receive The Keys

Once the sale is completed and the funds have transferred, you receive the keys to your new home.

You will be able to live there while paying off the mortgage, but will only fully control the property once the mortgage is paid off. If you fail to pay off the mortgage, the lender is able to claim the house.

Paying off the mortgage over time is the final step for buying a home in Ireland.

The Bottom Line

If you are asking “how do I buy a house?”, the process can be summarised into a few main stages.

Remember:

• Save your deposit and additional buying costs
• Get Approval in Principle before house hunting
• Check whether government supports are available
• Make an offer within your budget
• Hire a solicitor
• Complete the mortgage and legal process
• Sign the contracts and receive the keys

Most importantly, plan ahead and avoid rushing into a property that is outside your budget.

Irish Mortgage Brokers can help you understand how much you may be able to borrow, compare mortgage lenders, prepare your application, and guide you through the process of buying a house in Ireland.