Mortgages in Northern Ireland Explained

You might need a mortgage if you’re looking to buy a house in Northern Ireland. But is the process any different from that in England?

Here, we explain how to get a mortgage in Northern Ireland, including the eligibility criteria and deposit requirements you must meet. We also look at the best way to source mortgage deals, any specific government schemes available, and what lenders could be options for you.

Are mortgages any different in Northern Ireland?

No, but fewer lenders offer mortgages. As a result, products and rates won’t necessarily be different; you may have to pick from a smaller selection than you may have done in mainland UK. Additionally, many lenders have postcode restrictions in Northern Ireland.

The good news is there are brokers who specialise in the Northern Irish market, and they know exactly how to get the best deals.

How much is stamp duty in Northern Ireland?

Stamp duty rates and thresholds are the same as in England. Currently, unless you are a first-time buyer, the following rates are imposed on residential property purchases:

As a first-time buyer, you would pay no stamp duty up to £425,000 and 5% on anything between £425,000 and £625,000. If your potential property is more than £625,000, you’ll have to pay stamp duty as you would if you had bought a property before.

Eligibility and deposit requirements

You’ll need to meet a provider’s criteria to apply for a mortgage successfully.

The criteria are generally no different for Northern Ireland compared to the rest of the UK, including the following requirements…

• Deposit. Lenders usually want a 10% deposit. However, you may find that you can access a mortgage where only 5% is needed. In general, though, the bigger the deposit you can put down, the better. It improves your loan-to-value ratio (LTV), which often means you are offered better rates. This could make all the difference if you only have a few lenders.
• Age. You have to be over 18 to get a mortgage, with many lenders preferring applicants to be 70 or under. Some may go a little older than this and have a higher maximum age. A broker would be able to help you identify those providers.
• Credit history. While lenders prefer clean credit histories, having issues with bad credit in the past will not always prevent you from getting a mortgage. It will depend on what the issue was, when it was, and whether your lender will accept it or not.
• Income Source. Northern Irish lenders sometimes stipulate where your income needs to come from. For example, some may not consider commissions or bonuses as part of your salary.

Affordability

Lenders in Northern Ireland use a multiple of your income to calculate how much you can borrow. In general, that multiple tends to be around 4 to 4.5 times. Some may go to 5 and you may be able to find a provider happy to go to 6 under the right circumstances. A mortgage broker specialising in the Irish market would be your best bet to find such a lender.

Mortgage providers also want to ensure you can afford the loan they eventually extend. As a result, they often conduct affordability assessments and ‘stress test’ your ability to cover repayments.

To do this, they’ll look at your expenditure versus income to see whether you can:

• Meet payments now
• Withstand a future rise in interest rate

Try our calculator below to find out how much you could borrow.

Which mortgage lenders are available?

There are several mainstream high-street lenders offering mortgages in Northern Ireland. Names such as NatWest, Barclays, and Virgin Money could all be options if you meet their eligibility requirements.

However, a broker could also help you identify more specialist lenders. For example, Kensington, Central Trust Limited, and Progressive Building Society both provide mortgage products.

How to compare the best mortgage deals in Northern Ireland

Simply using a comparison website to find the best product for you can be tempting. However, a local broker is better because they know the smaller Northern Irish mortgage market. Plus, they have access to more rates than if you were to apply directly to a lender. A broker could, therefore, prove invaluable given the narrower selection of providers and how postcode restrictions can limit your options.

They will advise you according to your specific situation and suggest the most suitable mortgages. They will often save you money by helping you secure a better rate with a payment structure that works for you.

Get in touch if you want us to connect you with a mortgage broker specialising in the Northern Irish market.

Can you get a 100% mortgage?

No, not anymore. These types of products are a thing of the past now. As mentioned above, the best you can currently access in Northern Ireland is a 95% mortgage.

Are any government schemes available?

Yes, there are—though you’ll need to meet all the requirements for them to be possible.

A broker could help you apply the schemes that are genuine options.

• Government Co-ownership scheme: This scheme helps eligible people buy a share of a property while renting the rest from a housing association. Buyers need a lower deposit while reducing their monthly repayments. Elsewhere in the UK, this is known as Shared Ownership.

• The 2021 mortgage guarantee scheme: To encourage mortgage lenders to reintroduce 5% deposit mortgages, the UK Government said it would guarantee a portion of any mortgage offered under this scheme. This scheme is currently available for applications until the end of December 2023.

• Right to Buy: This scheme helps those who have lived in their rented council home for over five years. If you are eligible, you can purchase your home at a discounted price. The maximum discount in Northern Ireland is 60% of the valuation or £24,000.

• Rent to Own: Backed by the co-ownership scheme, Rent to Own allows eligible candidates to rent a new build, with an opportunity to purchase the property later. You can only live in the property for up to 3 years before buying it or moving out.

Speak to a broker who specialises in Northern Irish mortgages

While the process for getting a mortgage in Northern Ireland is not necessarily different from that in England, having fewer lenders available could easily impact you. Having fewer options from which to choose, with the added complication of postcode restrictions, means seeking the help of a broker is beneficial.

With their expertise, you can access better rates and mortgage terms. You could, therefore, find you could borrow more and pay less interest than if you were to search the market on your own. Importantly, brokers can help ensure you get approved the first time you apply – helping to keep your credit score as healthy as possible.

Our free, no-obligation broker matching service will connect you with a local broker. Call 0330 818 7026 or enquire with us today so we can connect you with a specialist.