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My Local Authority Home Loan

What is the maximum value of the property I can purchase or self-build?

The maximum market value of the property to be purchased is:

  • €360,000 in Dublin, Kildare or Wicklow, or
  • €330,000 in Cork, Galway, Louth or Meath, or
  • €300,000 in Clare, Kilkenny, Limerick, Waterford, Westmeath or Wexford, or
  • €275,000 in Carlow, Cavan, Donegal, Kerry, Laois, Leitrim, Longford, Mayo, Monaghan, Offaly, Roscommon, Sligo or Tipperary.

What is the maximum amount I can borrow?

The maximum amount you can borrow depends on where you intend to live.  The maximum loan amount you can borrow for property purchased or self-built is:

  • €324,000 in Dublin, Kildare or Wicklow, or

  • €297,000 in Cork, Galway, Louth or Meath, or

  • €270,000 in Clare, Kilkenny, Limerick, Waterford, Westmeath or Wexford, or

  • €247,500 in Carlow, Cavan, Donegal, Kerry, Laois, Leitrim, Longford, Mayo, Monaghan, Offaly, Roscommon, Sligo or Tipperary.

What is the maximum loan to value I can borrow?

The maximum loan to value you can borrow is 90% of the market value of the property. This means that if, for example, the property you purchase is €320,000 then the most you can borrow is €288,000. Similarly, if, for example, the property you purchase is €250,000 then the most you can borrow is €225,000.

What is the maximum term over which I can borrow?

The maximum term over which you can borrow is 30 years.

The term may be shorter depending on your age. The number of years between the date of loan drawdown and the oldest applicant reaching the age of 70 determines the length of time over which you can borrow.

This means that a single applicant aged 35 years can have maximum term of 30 years, but a single applicant aged 45 years is limited to a maximum term of 25 years.

In the case of a joint application, one applicant aged 35 years and the other aged 45 years, the couple is limited to a maximum term of 25 years.

How much deposit do I need?

You need a deposit of at least 10% of the market value of the property you intend to purchase or self-build.

Where you wish to borrow 90% of the market value, your 10% deposit contribution must be made up of:

  • personal savings of at least 3% of the value of the property and
  • funds of up to 7% of the value of the property, from an unborrowed source.

Personal savings must be accumulated over a period of at least 12 months before you make your application. You must provide certified or original bank or similar statements (post office, credit union, etc.) clearly showing a credible and consistent record of savings.

The balance of funds may be from a gift or other unborrowed source (i.e., not another loan).

Example:

For a property with a market value of €320,000 you will need a deposit of at least €32,000.

This must be evidenced by way of:

  • a minimum of €9,600 (3%) from your personal savings and
  • €22,400 (7%) from any unborrowed source, such as a parental gift.

Where receiving a gift, a letter is required, detailing the gift amount, that the amount is non repayable and the disponer giving the gift will have no interest in the property purchased with a Local Authority Home Loan.

Can I use the Help-To-Buy scheme towards my deposit?

Yes, you can use the Help-To-Buy scheme towards your deposit.

The Help-To-Buy (HTB) scheme can be used towards your deposit if you are purchasing or self-building a new property. The HTB Application Number and HTB Access Code must be provided as part of your Local Authority Home Loan application. Full details on the Help-To-Buy scheme are available from revenue.ie

What is the interest rate?

A Local Authority Home Loan offers two fixed interest rates:

  • 4.00% fixed for mortgages with a term up to 25 years (APR 4.07%)
  • 4.05% fixed for mortgages with a term from 26 years up to 30 years (APR 4.13%)

Interest rates are subject to change at any time before the drawdown of a Local Authority Home Loan. The interest rate is set on the date of drawdown and is fixed for the full term.

All interest rates quoted are exclusive of Mortgage Protection Insurance (MPI) which is a requirement of borrowing. Eligible borrowers are required to join the Local Authority Mortgage Protection Insurance Group Scheme. MPI is paid monthly, in addition to loan repayments.

What is a fixed interest rate mortgage?

A fixed interest rate mortgage is a loan where the interest rate stays the same throughout an agreed period. The Local Authority Home Loan interest rate is fixed for the full term of the mortgage. This means that your loan repayments are the same every month for the lifetime of the mortgage.

Can I repay my fixed rate mortgage early?

You can repay your fixed rate mortgage early, in full or in part. An early repayment charge may be applied.

What is Mortgage Protection Insurance?

Mortgage Protection Insurance is a form of insurance which pays off the outstanding balance on your mortgage should you die before the mortgage is fully repaid. Mortgage Protection Insurance (MPI) is a requirement of borrowing.

What is the Local Authority Mortgage Protection Insurance Group Scheme?

Mortgage Protection Insurance (MPI) is a requirement of borrowing. The Local Authority MPI scheme is a group scheme. It is obligatory for all borrowers who meet the eligibility criteria to join the scheme.

The benefits include:

  • an additional payment of €3,000 in the event of a member’s death, separate to life cover; and
  • members are also covered for death up to age 75.

Full terms and conditions of the scheme are available from your local authority.

What is the Fresh Start principle?

The Fresh Start principle allows people who have previously previously purchased or built a dwelling/dwellings  to be eligible to apply for a Local Authority Home Loan.

You are eligible to apply for a Local Authority Home Loan under the Fresh Start principle if you:

  • Previously purchased or self-built a residential dwelling/dwellings, and
  • Are divorced/separated or otherwise no longer in a relationship with your co-owning partner, and
  • Have left the family home and divested yourself of your interest in the property

or

  • Previously purchased or self-built a residential dwelling/dwellings, and
  • Have been divested of this through insolvency or bankruptcy proceedings

The Fresh Start principle does not allow a Local Authority Home Loan to be used to buy out a former partner’s share of a family home.

Note: If you are eligible under Fresh Start and you previously owned more than one dwelling you can still apply once you meet all the other eligibility criteria.

Will I still be eligible for the Fresh Start Principle if I owned more than one property prior to my divorce/separation or insolvency/bankruptcy proceedings?

Yes, you will still be deemed eligible for the Local Authority Home Loan as a Fresh Start applicant where you owned more than one dwelling and have left the family home and divested yourself of these properties following divorce/separation or insolvency/bankruptcy proceedings.

In such cases the most recently owned home must have been lost due to the ‘Fresh Start’ event i.e. experienced divorce/separation or insolvency/bankruptcy.

What are the recent changes to the Fresh Start principle?

The recent changes widen the definition of ‘Fresh Start’ to allow a person who has experienced divorce/separation or insolvency/bankruptcy, to be eligible to apply for a Local Authority Home Loan regardless of the number of previous dwellings that person may have owned.

In these cases, the most recently owned home must have been lost due to the ‘Fresh Start’ event i.e. experienced divorce/separation or insolvency/bankruptcy.

Before these changes, applicants who went through a Fresh Start event such as divorce/bankruptcy and were divested of the family dwelling as a result but had previously bought/built dwellings prior to this specific home, were not eligible under the Fresh Start principle.

It is still the case that Fresh Start applicants must have been divested of all previous dwellings that they purchased or built. An applicant cannot apply under the Fresh Start principle but still retain ownership of dwellings previously bought or built. However, a person may retain ownership of an inherited dwelling and still be eligible for the LAHL under the Fresh Start principle.

I'm separated/divorced/ending a relationship and applying under the Fresh Start principle. Can I use the Local Authority Home Loan to buy out my former partner's share of our family home?

The Fresh Start principle does not allow a Local Authority Home Loan to be used to buy out a former partner’s share of a family home.

What is a Local Property Tax Check?

A Local Property Tax (LPT) check compares your PPSN against a database of people registered with Revenue for Local Property Tax.

Your consent to allow your local authority to conduct an LPT check is required as part of your application for the Local Authority Home Loan. An LPT check is carried out by your local authority to confirm your eligibility as a first-time buyer. The check is made via the Revenue's online LPT system.

In such a case where you are registered for the Local Property Tax but do not own, or have no interest in the registered property, your local authority will require further documentation as proof of this.

What is the Central Credit Register?

The Central Credit Register is a secure system for collecting personal and credit information on loans of €500 or more. The Central Credit Register is owned and operated by the Central Bank of Ireland.

The Central Credit Register is a national database that, on request, provides:

  • an individual credit report detailing an applicant's credit agreements;
  • a lender with comprehensive information to help with credit assessments; and
  • the Central Bank with better insights into national trends in the provision of credit.

All applicants to the Local Authority Home Loan must consent to the carrying out of credit check and reporting of the loan application to Central Credit Register. Consent is given as part of the completion of the Local Authority Home Loan application form.

Where can I get more information about the Local Authority Home Loan?

For more information about the Local Authority Home Loan please read the Information Booklet in full. If you cannot find the answer there, please complete the contact form and your enquiry will be answered.