2025 will be a complex year for the Irish housing market. While it presents opportunities, it also brings challenges…and that’s before we get into the supply, the politics and the costs!
A Decade in Review
The past decade has been a rollercoaster for the Irish housing market. After the 2008 crash, prices plummeted. They have since rebounded strongly. In recent years, we’ve seen significant price increases, particularly in urban areas. This surge has been fueled by factors including economic growth, high levels of demand, low-interest rates, and a shortage of housing supply. In the last Irish census, our population reached a record 5 million inhabitants.
Is 2025 the Right Time to Buy?
Whether 2025 is the right time to buy a house depends on individual circumstances and risk tolerance. If you’re financially stable, have a secure job, and are prepared for potential market fluctuations, it could be a good time to invest in property. However, it’s essential to consult with a financial advisor to make an informed decision.
Ultimately, the best time to buy a house is when it aligns with your personal financial goals and life stage.
In this post, Gareth Watkins outlines various considerations when you start out on your mortgage journey. Let’s start with the top consideration…understanding what you are getting into!
Understanding the Mortgage Process in Ireland
The mortgage process in Ireland can seem daunting, but it’s a straightforward process when broken down (and with a little help from Lynx Financial Services). It typically involves securing a mortgage approval, conducting a property search, making an offer, and going through legal procedures.
Getting mortgage approval in Ireland can feel like a long and complicated process, but once you’ve submitted a complete application with all the necessary documents, it typically takes around 5-10 working days to receive a mortgage “Approval In Principle” (AIP). This is an initial step that lets you know how much you can borrow based on your income and financial situation.
The key to a speedy approval lies in having all your documents in order. This involves gathering everything upfront and making sure there are no missing documents or gaps in your information. This will save you time and frustration down the line. (This is something we help with).
Mortgages – How Much Can I Borrow?
The amount you can borrow for a mortgage depends on several factors, including your income, expenses, and credit history. Lenders assess your financial situation to determine your borrowing capacity. It’s crucial to be realistic about your budget and avoid overextending yourself. If you have existing debts (loans, credit card balances, car financing) it may reduce the amount you can borrow. We covered borrowing limits in a previous blog post on our website.
What is Repayment Capacity and How Does it Affect a Mortgage Application?
Repayment capacity refers to your ability to meet your monthly mortgage repayments while maintaining your current lifestyle. To demonstrate you can afford the new mortgage you are applying for, you need to have Rent & Savings amounts equalling the proposed new mortgage repayments, for the 6 months prior to applying.
For example, if your new mortgage is going to cost €2,000 p/m, and you are currently renting for €1,500 p/m, you need to save an additional €500 p/m to show you can repay the mortgage. In the example, if you don’t pay any rent, you will need to save the full €2,000 p/m for the 6 months before you apply.
How to Save a Mortgage Deposit in Ireland
Saving for a mortgage deposit can be challenging, especially for those paying rent or with a family. Consider setting up a dedicated savings account and automating regular contributions. High-interest savings accounts can help your money grow faster.
Additionally, exploring government schemes or incentives designed to assist first-time buyers can significantly boost your savings efforts. We have a range of options to help you maximise your savings and with our help, we can also ensure you are making every Euro work hard for you.
The 2025 Outlook
In 2025, several factors will influence the market:
- Interest Rate Hikes: Rising interest rates can make mortgages more expensive, potentially cooling demand.
- Economic Uncertainty: Global economic conditions and domestic factors like inflation can impact buyer confidence.
- Government Policies: Government initiatives, such as housing schemes and tax incentives, can influence market trends.
- Supply and Demand: The ongoing housing shortage continues to put upward pressure on prices.
Here to help you save for today, tomorrow and for the unexpected.
At Lynx Financial Services, our team of experienced financial advisors are dedicated to helping you achieve your financial goals. We understand that everyone’s circumstances are unique, and we take a personalised approach to financial planning.
We’ll work with you to assess your needs, risk tolerance, and investment goals, and develop a tailored plan to secure your financial future. Let us help you navigate the complexities of financial planning and make informed decisions about your retirement income.
No jargon, no hidden fees, just plain talking, strategic financial advice.
