How mortgages work in Ireland

There is no credible evidence Einstein said it. Researchers at Quote Investigator traced the "eighth wonder of the world" attribution and found it appearing decades after his death, with no source in his own writings. Treat it as apocryphal: the maths is impressive enough without the celebrity endorsement.

It depends entirely on what the money is in: deposit accounts, bonds and shares behave differently, and Around doesn't predict markets. Our worked examples use a 3% to 7% range purely to show how the maths responds to different rates.

Because interest is charged on what you still owe, and you owe the most at the start of the mortgage. On €300,000 at 4% over 30 years, €11,904 of the first year's €17,187 in payments is interest — 69%. As the balance falls, the same monthly payment shifts steadily towards paying off principal instead.

You need at least 10% of the price if you're a first-time buyer or a second/subsequent buyer, and 30% for a buy-to-let, under the Central Bank of Ireland's mortgage measures (as of this review). On a €350,000 home, that means at least €35,000 saved. Lenders have limited discretion to go below these limits in a small share of cases, but you shouldn't count on it.

You can typically borrow up to 4 times your gross income as a first-time buyer, or 3.5 times as a second/subsequent buyer, under the Central Bank's mortgage measures (as of this review). On €80,000 of income, that works out to €320,000 or €280,000 respectively. Lenders then run their own affordability checks on top of these limits, which can bring the real amount they'll offer you lower still.

Usually yes, but within limits. Variable-rate mortgages typically allow unlimited overpayment, while fixed-rate deals usually cap how much you can overpay each year or charge a break fee beyond the cap. Your lender's terms are the authority, so check them before setting up an overpayment.

Overpaying earns a guaranteed, tax-free return equal to your mortgage rate, while savings usually pay a lower rate that may also be taxed, so on pure numbers overpaying often wins. But overpaid money is locked in the house, so an accessible emergency fund comes first. On €300,000 at 4% over 30 years, €100 a month extra saves €28,747 in interest, though personal circumstances decide the rest.

You roll onto the lender's default rate — usually a variable rate — unless you choose a new fixed rate or switch lender. Doing nothing is itself a decision, and it's often the most expensive of the three. Compare your options on APRC before the fixed period ends.

For residential property, stamp duty is 1% of the price up to €1 million, 2% on any portion between €1 million and €1.5 million, and 6% above that, per Revenue (rates as of this review). On a €350,000 home, that comes to €3,500. Your solicitor normally handles the filing as part of the purchase.

Generally yes: Irish law requires lenders to ensure you have mortgage protection insurance — a policy that clears the remaining balance if you die — before drawing down a mortgage on your home, with limited exceptions (per the CCPC, as of this review). It is a specific, usually inexpensive form of cover, distinct from ordinary life insurance.

Neither is better in general: on €300,000 at 4%, the 35-year term costs €1,328.32 a month against €1,583.51 for 25 years, but €257,896 in total interest against €175,053. The longer term buys monthly breathing room; the shorter one buys a lower total cost. Many borrowers take a longer term and overpay when they can, which shortens it voluntarily.

APRC (annual percentage rate of charge) is the total yearly cost of a mortgage — interest plus standard fees — expressed as a single percentage. It exists so offers with different rates and charges can be compared like-for-like. A low headline rate with high fees can have a worse APRC than a higher rate without them.