The Central Bank of Ireland sets firm limits on how much any regulated Irish lender can lend you. Understanding these rules before you start house-hunting is essential — it tells you your maximum budget and helps you avoid wasting time on properties you cannot finance.
The Central Bank Income Limits
The Mortgage Measures framework applies to all regulated mortgage lenders in Ireland — AIB, Bank of Ireland, EBS, Haven, ICS, Avant Money, Permanent TSB, Finance Ireland, and all credit unions.
| Buyer Type | Maximum Loan-to-Income (LTI) |
|---|---|
| First-time buyer | 4.0× gross income |
| Second-time buyer (mover) | 3.5× gross income |
| Buy-to-let investor | No fixed LTI limit (assessed on rental yield) |
These limits changed in January 2023. Before 2023, first-time buyers were capped at 3.5× income. The change to 4× gave first-time buyers significantly more borrowing power.
Quick Borrowing Calculator
Single applicant:
| Annual Income | FTB Maximum (4×) | Mover Maximum (3.5×) |
|---|---|---|
| €40,000 | €160,000 | €140,000 |
| €55,000 | €220,000 | €192,500 |
| €70,000 | €280,000 | €245,000 |
| €85,000 | €340,000 | €297,500 |
Joint applicants:
| Combined Income | FTB Maximum (4×) | Mover Maximum (3.5×) |
|---|---|---|
| €75,000 | €300,000 | €262,500 |
| €90,000 | €360,000 | €315,000 |
| €110,000 | €440,000 | €385,000 |
| €130,000 | €520,000 | €455,000 |
What Counts as Income?
Lenders count the following toward your borrowing capacity:
Fully counted:
- Basic salary from permanent employment
- Basic salary from long-term contract employment (typically 12+ months continuous in same field)
- Public service salary (pensionable income often treated favourably)
Partially counted (typically 50–100% depending on lender):
- Regular overtime (if documented over 12+ months)
- Commission (if demonstrated over 2+ years)
- Bonus (typically 50% averaged over 2 years)
- Rental income (typically 75–100% of rent after deducting mortgage, minus tax)
Not counted (or heavily discounted):
- Probationary income
- Social welfare payments
- Child benefit
- Seasonal or irregular income without documented history
Self-employed: Lenders typically average the last 2–3 years’ net profit from certified accounts. A strong recent year but weaker earlier years reduces your average. Conversely, a growing business with rising profits is assessed conservatively.
The LTV Limit: How Much Deposit You Need
The income limit determines the maximum you can borrow. The Loan-to-Value (LTV) limit determines how much deposit you need:
| Buyer Type | Max LTV | Minimum Deposit |
|---|---|---|
| First-time buyer | 90% | 10% of property value |
| Second-time buyer | 80% | 20% of property value |
First-time buyer example:
- Target property: €380,000
- 10% deposit required: €38,000
- Maximum mortgage: €342,000
- Income needed (at 4×): €342,000 ÷ 4 = €85,500 combined income
The deposit and income limits interact. You may have enough income to borrow €400,000 but only have a €30,000 deposit, capping you at a €300,000 property (10% = €30,000, leaving €270,000 to borrow). Both limits must be satisfied simultaneously.
Affordability Stress Testing
The income multiple is the regulatory cap — but lenders also apply their own affordability assessment. They stress-test your ability to repay at interest rates 2–3% higher than today’s rates.
Example stress test:
- Mortgage: €300,000 at current rate of 3.5% → monthly repayment ~€1,506
- Stress rate: 5.5% → monthly repayment ~€1,839
- Lender checks: can you afford €1,839/month from your net income after all other outgoings?
If your income minus all financial commitments (other loans, credit cards, childcare, travel costs) leaves insufficient headroom at the stressed rate, the lender will reduce the loan offer below the income cap.
What Reduces Your Borrowing Capacity?
Existing debts are the biggest factor. A car loan of €350/month reduces your effective borrowing capacity significantly — lenders deduct the monthly debt repayment from your net income before applying the stress test.
Credit card limits (not just balances) — lenders often include a percentage of credit card limits as a potential liability.
Childcare costs — major Irish lenders now explicitly ask for childcare costs and factor them into affordability.
Personal loan repayments — clear loans before applying where possible to maximise your mortgage borrowing.
Exceptions to the Income Limit
The Central Bank rules allow lenders to make a small percentage of their new lending above the income limits (and separately above the LTV limits). These exceptions are limited and not guaranteed:
- Up to 5% of new lending to first-time buyers can exceed the 4× income limit
- Up to 10% of new lending to second-time buyers can exceed the 3.5× limit
This means a lender might approve up to 4.5× income in exceptional cases — but they use this discretion sparingly and for strong applications (high income, large deposit, clean credit, long employment history).
Do not assume an exception will apply to you. Plan based on the standard limits.
How Help to Buy Affects Borrowing
The Help to Buy (HTB) scheme provides first-time buyers with a tax rebate of up to €30,000 (or 10% of the property price, whichever is lower) for new-build properties up to €500,000.
HTB does not change your income limit or LTV limit — it helps fund your deposit, which in turn may allow you to reach the required 10% without saving as much yourself.
Example: Property €400,000. You need €40,000 deposit. You have €15,000 saved. HTB provides €25,000. Total deposit: €40,000. Mortgage: €360,000. At 4× income, you need €90,000 combined income.
The Property-Value vs Income-Limit Interaction
You are constrained by whichever limit is lower:
- 4× your income (maximum loan amount)
- 90% of the property value (maximum LTV for FTBs)
Scenario A — income is the binding constraint:
- Combined income: €80,000 → maximum mortgage €320,000
- Target property: €380,000 (needs €342,000 mortgage at 90% LTV)
- Income limit is binding — you are €22,000 short of what this property needs
Scenario B — deposit is the binding constraint:
- Combined income: €100,000 → income allows €400,000
- Savings: €30,000 → 10% deposit allows max property of €300,000 (borrow €270,000)
- Deposit is binding — you can borrow more than the deposit allows
Getting Approval in Principle
Once you know your maximum borrowing capacity, the next step is an Approval in Principle (AIP) — a written indication from a lender of the amount they will lend you, subject to a full credit assessment and property valuation.
AIP is typically valid for 6–12 months and is required by estate agents before they take offers seriously. Apply with one lender to gauge your position, or use a broker to compare two or three simultaneously.
A Mortgage Broker Can Find Your True Maximum
Every lender interprets the income rules slightly differently — particularly for variable income, commission, or self-employed borrowers. A mortgage broker with access to multiple lenders can identify which lender treats your income most favourably and is likely to approve the highest amount.
For borrowers whose income is anything other than a standard PAYE salary, a broker comparison is especially valuable.
See also: Central Bank Mortgage Rules Ireland | Mortgage Deposit Requirements Ireland | Joint Mortgages in Ireland | Help to Buy Scheme Ireland | Mortgage Approval in Principle