Bank of Ireland offers 100% mortgage with deposit loan

Bank of Ireland has joined a growing number of banks offering 100% mortgages covering house deposits, with a product called QuickStart 100, which will apply to first-time buyers.

First Active, Permanent TSB and Ulster Bank already offer 100% mortgages.

The Bank of Ireland product will offer first-time buyers a personal loan to cover the house deposit. The loan will be redeemed when the mortgage cheque issues. The mortgage offering also offers the option of a 35-year mortgage term.

Olive Moran, Marketing Manager, Bank of Ireland Mortgages said: “In talking to our customers it was very clear to us that raising the 10% contract deposit is a significant burden for first-time buyers."

Bank of Ireland will lend the borrower the full contract deposit amount up front in the form of personal loan at 6%, with deferred interest payments until the mortgage draws down.

Bank of Ireland Mortgages advises customers that, although they will not have to finance the contract deposit, they will have to cover other up front costs such as legal fees, outlays, valuation fees, booking deposit, stamp duty (if applicable) and booking deposit interest.

On a typical €300,000 mortgage, first-time buyers will need to have saved approximately €10,000 to cover these costs compared to €40,000 if they also have to cover the contract deposit.

Customer research shows that first-time buyers save an average of €16,000, indicating that many of them will have sufficient funds to cover the costs outlined above.

Customers who wish to avail of the QuickStart 100 mortgage will need to have a minimum income of €35,000 per year (or €60,000 in the case of joint applicants). The criteria also specifies that qualifying properties have a minimum of two bedrooms.