Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie

[Request] Mortgage to Salary Ratio for a Two Income Mortgage

Options
  • 10-11-2006 4:06pm
    #1
    FrCrilly
    Closed Accounts Posts: 528 ✭✭✭


    Hi

    As far as I’m aware, the standard Mortgage to Salary ratio for one person seeking a mortgage is 4.5 times. (ignoring exceptions)

    Does anyone know how exactly this ratio works for two people getting together to buy. Eg Is it 4.5 times both their salaries or is something else?

    Thanks in Advance


Comments

  • Options
    #2
    ButtermilkJack
    Registered Users Posts: 632 ✭✭✭ButtermilkJack


    Hi, I could be wrong but as far as I was aware, this kind of ratio is no longer in use. It is now normal practice for banks to calculate mortgage repayments as a percentage of disposable income. So, let's say you earn €3,000 net per month and you have a loan of €200 per month. That gives you €2,800 disposable income. If you ask for a mortgage with repayments of €1,400, that's 50% repayment figure.

    In my experience the figure the banks work towards is circa 40% (see quote below). Obviously this changes with people's circumstances.
    www.bankofscotland.ie wrote:
    Normal lending levels are subject to monthly repayment burden, typically not exceeding c. 40% of borrowers disposable income and will vary according to individual circumstances.

    Applying as a couple will no doubt enhance your chances as a higher overall income will lower the percentage even further.

    Hope this helps a bit!


Advertisement