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Possible mortgage sum?

  • 01-09-2021 1:09am
    Registered Users Posts: 945 ✭✭✭ WhiteWalls

    I'm aware that the mortgage sum is 3.5 times your salary.

    In my job however my first year would have been quiet poor. This year and last year have been very good for me due to going up increments and overtime.

    Basically my question is, should I hold off on applying for a mortgage until the end of next year or will the bank take into consideration that year 1 of my salary is not a representation of my new salary?

    Appreciate any advice, thanks


  • Registered Users Posts: 3,817 ✭✭✭ Darc19

    The bank looks at what you are paid by now. They are not interested in last year.

    But this is only part of the calculation

  • Registered Users Posts: 4,426 ✭✭✭ maestroamado

    I think from memory it be a multiplier of your P60 from last work year + any other confirmed income + bank statements...

  • Registered Users Posts: 414 ✭✭ Emma2019

    It works off your salary statement you get from your employer. Although depends on the bak as to whether they will consider any overtime.

  • Posts: 0 [Deleted User]

    The limit is 3.5 times your current salary, not your salary over the last 3.5 years.

    You mention increments - if you're in the public sector, some lenders will let you apply the salary a couple points up the scale from where you are.

  • Registered Users Posts: 13,913 ✭✭✭✭ Cuddlesworth

    The limit is 3.5 times income, the way to interpret that is up to the banks.

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  • Registered Users Posts: 945 ✭✭✭ WhiteWalls

    Thanks for all of the responses. My question however really is, should I wait another year until I have three good years of a salary?

    Basically so I can borrow more?

  • Registered Users Posts: 5,228 ✭✭✭ pg633

    That's up to you surely.

    Do you need to borrow more?

  • Registered Users Posts: 945 ✭✭✭ WhiteWalls

    I don't have to but I suppose my first year of the three wouldn't be a reflection of what my salary actually is..

    Hoping to buy on my own so I'd like to get as much as I can..

  • Registered Users Posts: 235 ✭✭ donnaille

    The first comment covers this - banks are interested in what you are on now, the first year is irrelevant.

    If you think your next year salary will be better, then there is the option of waiting, but there is no harm in applying now and see what you can get approved for. Property prices next year may well cancel out any increase in salary you are expecting.

  • Registered Users Posts: 945 ✭✭✭ WhiteWalls

    Banks are interested in what I am earning now but if they take into consideration an average of 3 years, how can you say one of those years is irrelevant?

    Will they use common sense and say he's on say 50k now and will be every other year so we can disregard the lower yearly figure three years ago?

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  • Registered Users Posts: 9,014 ✭✭✭ TheChizler

    No averages when I applied with UB. 3.5 times newest salary certs which included raises in the previous weeks.

  • Registered Users Posts: 13,989 ✭✭✭✭ SteelyDanJalapeno

    You answered yourself correct, and then incorrectly in the same sentence :).

    The 3.5x is on your current salary, there's no averaging of previous years, they don't care about what you used to make, it's irrelevant.

    Same if you went down in salary next year, they would not consider your higher salary this year.

  • Registered Users Posts: 235 ✭✭ donnaille

    Apologies, I've taken from the initial post that you are a PAYE worker - but I'm now assuming you are self-employed, which is the reason you've mentioned 3 years?

  • Registered Users Posts: 5,228 ✭✭✭ pg633

    They referenced increments and overtime so they are probably a PAYE worker.

    OP Talk to a broker maybe, none of us can tell you what is right for you.

    Some salary forms ask for lots of details over three years, most only ask for the current year.

    Some banks will consider the overtime, others won't.

    Since you are there more than two years you have certain employment protection.