Loan-to-income limit (LTI)

Henry Ngo

Hi everyone,

I know that there is a general limit of 3.5 times gross annual income for all new mortgages to buy a house. I want to ask that we can mortgage to buy 2 house and borrow up to 3.5 times income for every house?

Thanks

L1011

A second house (at the same time) would not be a PPR mortgage and have entirely different rules.

XsApollo

2 houses at the same time?

not possible, you can only have one PPR, presuming one of them would have to be a buy to let , banks have different rules for buy to let mortgages.

or already have one house mortgaged and you are buying another?

presuming you can afford a second mortgage then the second one will be 3.5 limit yes, both mortgages don’t come under the 3.5 limit together.

there are rules and stuff about buying a second house, you can only have one PPR so one of them would be classed as a buy to let, bigger deposit for the second house and so on.

I stand to be corrected on the above , but that’s how I remember it anyway.

ELM327

For a BTL you need minimum 25% deposit normally to start with

Henry Ngo

2 houses are not a same time. The 2nd house may be bought after the 1st house about a few of years.

For examples, can I mortgage 60% for the 1st house (3.5 times income) and after 2 years, I continue to mortgage 60% for the 2nd house (also 3.5 times income)?. I still mortgage 55% for the 1st house (have just paid 5%).

Thanks.

JimmyMW

https://www.boards.ie/discussion/comment/119272357#Comment_119272357

I dont believe so, they will take into consideration your current outstanding balance and take this out of the 3.5 your income, there is no way one could afford 7 x income anyway so you couldn't meet the stress tests id imagine

Kurooi

In theory yes, I did that. Bought a starter, traded up, kept the old one. It's classed as an investment I believe but there is no requirement to let it out. Banks are suprisingly chill so long as you keep repayments up.

You can buy a house, then apply for another mortgage and buy another house. They have individual 3.5 LTI limits so you can in theory borrow 7 times your salary. Heck I even got an LTI exception on the second one so probably borrowed about 7.5 times. Points to note are :

• when you're buying the second property you will need a 20% deposit
• Banks will not grant this easily. the decision will depend on your income, spouse, professions, remaining LTV of your old house, size of deposit.
• Get your first home revalued and submit that to the bank, you want that LTV to be as low as possible so the bank don't see your two properties as a risk.
• Your best bet is to try with your current lender.
• First time buyer mortgages are approved pretty much automatically, just have a job and a deposit, computer says Yes. Your second mortgage request is going to be scrutinized by humans for sure.

I cannot stress enough how much you should not count of this second mortgage getting approved. But you can try your luck.