Mortgage Stress Test

The Central Bank of Ireland requires lenders to test if you can afford mortgage repayments at 3% above the current rate. This is called the 'stress test'. You must also meet the 3.5x loan-to-income limit and LTV limits (90% up to €250k, 80% above).

Most Irish lenders cap borrowing at 3.5 times your gross annual income. First-time buyers can borrow up to 4x income on the first €250,000. You also need a deposit of at least 10% (up to €250k) or 20% (above €250k). The stress test at 3% above current rates is the real constraint for many borrowers.

For properties up to €250,000, you can borrow up to 90% LTV (10% deposit). For properties over €250,000, the limit is 80% LTV (20% deposit) on the portion above €250k. First-time buyers can borrow 90% on the full amount up to €250k.

Other loan repayments, credit card minimums, and car finance all count against your affordability. The stress test adds 3% to the current rate on your mortgage AND assumes you maintain all other commitments. Reduce or clear other debts to improve your chances.

Most Irish lenders will not approve a mortgage if you fail the stress test. You can: increase your deposit (lower loan amount), choose a longer term (lower monthly), reduce other debts, or wait until rates drop. Some non-bank lenders may have different criteria but often charge higher rates.

Switching to a new lender usually requires passing the stress test again. However, if you are switching and your loan is below 60% LTV, some lenders may apply more relaxed criteria. Always check with a broker before assuming you'll pass.

Our calculator applies the Central Bank rules: 3.5x income limit, 3% stress rate increase, and LTV limits. Enter your income, deposit, property price, and current rate to see if you pass. The result shows your stress monthly payment and whether it stays within 50% of your income.

The stress test applies 3% above your current rate — even if fixed. If you fix at 4%, the stress test checks affordability at 7%. This is why fixing for a longer term when rates are low can make the stress test harder to pass, even though it protects you long-term.

The Central Bank limits most mortgage lending to 3.5 times gross annual income. First-time buyers can exceed this up to 4x on the first €250,000. However, only about 15% of FTB mortgages are approved above 3.5x — it's not guaranteed.

For first-time buyers in Ireland, 10% deposit is the minimum (90% LTV). There is no 95% or 100% mortgage option under current Central Bank rules. The Help to Buy scheme can help with up to 10% of the property value (max €30,000) towards your deposit.

Most people can afford 3-4x their income plus their deposit. For a couple earning €80,000 combined with a €30,000 deposit: max borrowing ~€280,000, max property price ~€310,000. However, the stress test may reduce this — our calculator shows your true maximum.

Second-time buyers face the same stress test rules (3% above current rate, 50% of income threshold). However, their LTV limits are stricter (80% on properties over €250k vs 90% for FTBs). They also have higher income and the 3.5x limit remains the same.