Costs of buying a home
As well as paying the mortgage, there are other costs involved in buying a home. These can be significant, so it is important to be aware of them before proceeding with the purchase. This document outlines the main costs involved.
The amount of money that you can get as a mortgage loan is governed by Central Bank lending limits, so you will need to pay the balance of the purchase price as a deposit. In general, you will need a deposit of at least 10% of the purchase price - and possibly more, depending on your situation. See Taking out a mortgage for details of these rules.
If the mortgage is from a local authority, you also normally need to have a deposit of 10% of the purchase price.
If you are a first-time buyer purchasing a newly built home or building your own home, you may qualify for the Help-to-Buy (HTB) incentive which can be used to help you with the deposit.
Lending agency fees
These may include an application fee, as well as the costs of the lender's survey and searches. There may also be fees for mortgage loan costs and an indemnity bond to ensure that if the lender has to repossess the property it won't make a loss.
There is no fixed rate of charges for legal fees. Solicitors can offer competitive rates for conveyancing work - the legal work associated with buying a home. Some may charge a flat fee and some may charge a percentage of the purchase price of the home. You can shop around to find a solicitor who will charge the lowest possible fee.
You can find more information about legal costs and the information your solicitor must give you about these charges in the Legal Services Regulatory Authority’s Guide to Legal Charges.
Buyer's survey fee
If you want, you can get your own independent survey of the property to identify any defects. This survey is separate to the survey carried out by the lending agency. There will be a fee for an independent survey and the cost can vary considerably.
If you want to arrange an independent survey, you can find a surveyor on the website of the Society of Chartered Surveyors Ireland (SCSI). The SCSI is the professional body for chartered surveyors.
Mortgage protection insurance
Mortgage protection insurance is designed to pay the balance of your mortgage if you die before the loan is fully repaid. In general, lenders are legally obliged to make sure that you have enough mortgage protection cover when you take out a home loan, although you do not have to arrange this insurance directly through them. Premiums vary but always reduce over the life of the loan as the amount of the loan reduces.
Local authorities run their own collective Mortgage Protection Insurance (MPI) scheme and people borrowing under the Local Authority Home Loan must take out insurance through this scheme. For more information on this see the FAQ’s on the Local Authority Home Loan website.
You are not obliged by law to insure your home but if you have a mortgage, most lenders will insist that your house is appropriately insured. In general, your home insurance should cover the contents as well as the structure of your home. You are not obliged to purchase home insurance from your mortgage lender and are free to shop around. The Competition and Consumer Protection Commission (CCPC) has detailed information on home insurance.
Stamp duty is a tax. You pay stamp duty when you transfer property. You must pay it when you buy a home. It is based on the final sale price of the property.
Local Property Tax
When buying a home you may have to pay some or all of the Local Property Tax (LPT) depending on when you buy. LPT is charged on all residential properties in Ireland and is due on 1 November each year. The LPT charge for your home varies depending on the value of your property. Your solicitor should check the LPT information for your new home before completing the sale, including checking if there are any outstanding payments or charges due on the property.