(known as the Local Authority Home Loan Scheme since 4th January 2022)
We regularly get queries in relation to the Rebuilding Ireland Home Loan Scheme (or the Local Authority Home loan scheme) as it is now known, so here’s a few of the more frequently asked questions we get.
What is the rebuilding Ireland home loan?
The rebuilding Ireland home loan is an initiative that was brought out by the Irish government in 2016. It helps people who have been refused a mortgage from the banks.
In order to get a mortgage from them you need two refusals from banks. It can also be two 3.5 times max loan approvals from two lenders – so you can only get approval for 3.5 times your income, so you need to be able to borrow more.
Can I get a Rebuilding Ireland home loan through a broker?
No, you cannot get a rebuilding Ireland (local authority) home loan through a broker, however you can get the mortgage protection which you will require for this type of loan through a broker.
How does the Local Authority Home Loan Scheme work?
Loans under this scheme are given at reduced interest rates and can be used to buy second-hand or new homes. These loans can also be used for self builds. The interest rates are fixed for the full term of the mortgage, so your repayments never change.
What are the requirements of the Local Authority Home Loan Scheme (rebuilding Ireland)?
A Local Authority Home Loan is a Government backed mortgage for first time buyers or other eligible applicants through your local authority. The scheme also includes the purchase of homes through State schemes such as the Tenant Purchase Scheme and Affordable Housing Schemes, with the exception of the First Home Scheme.
What is the Fresh Start Principle?
The "Fresh Start" principle means that people who are divorced or separated and have no interest in the family home, or who have gone through personal insolvency or bankruptcy or another legal process, will be eligible to apply.
Where can I get a local authority home loan?
The Local Authority Home Loan is available nationwide from all local authorities since Jan 2022.
The loan is a normal Capital and Interest-bearing mortgage which is repaid by direct debit every month.
How much can you borrow with a local authority home loan?
You can borrow up to 90% of the market value of the property. Maximum market values of the property that can be purchased or self-built are:
€320,000 in the counties of Cork, Dublin, Galway, Kildare, Louth, Meath and Wicklow.
€250,000 in the rest of the country.
Do you need a deposit for a rebuilding Ireland home loan?
If you are applying for a mortgage with the Rebuilding Ireland home loan, and you're a first-time buyer, you need a 10% deposit on your property.
Do you need mortgage protection for a local authority home loan?
It is a condition on all loans that Mortgage Protection Cover is taken out before the loan cheque issues. There is a standard mortgage protection insurance scheme which is compulsory with local authority house purchase loans. The cost of mortgage protection insurance which covers both death and permanent disability will be added to your monthly mortgage repayments.
I have been turned down for Mortgage Protection (covering both death and permanent disability) with Rebuilding Ireland. Does this mean that I will be turned down with other insurers?
If you have been refused for Mortgage Protection with rebuilding Ireland, it does not mean that you will be automatically turned down with other insurers.
The mortgage protection cover with rebuilding Ireland gives automatic entry to people applying for the scheme unless they have health issues. Certain health issues will result in an automatic decline for this scheme. Applicants are then required to get mortgage protection and income protection elsewhere.
In this scenario, it would be advisable to use a broker. Here at Citywide we have access to all of the insurers in the market so will be aware of which insurer would treat your condition most favourably.
We will also shop around for the best deal available for you.
Get in touch to request a quote