Amortisation
Amortisation refers to repaying your mortgage through regular monthly instalments over a set period, typically 25 years. Each payment gradually reduces both the interest and the capital you owe until the loan is fully paid off.
Annual Percentage Rate (APR)
The APR is the total cost of your mortgage over a year, expressed as a percentage. It includes interest and fees, allowing you to compare loan offers more accurately. The lower the APR, the cheaper the loan is overall.
Annual Percentage Rate of Charge (APRC)
APRC shows the total cost of a mortgage over its full term, including interest, fees, and charges, expressed as an annual percentage. It helps borrowers compare different mortgage products on a like-for-like basis.
Affordability
Affordability is how much you can realistically borrow and repay on a mortgage based on your income, savings, debts, and monthly expenses. Lenders assess this to confirm your mortgage remains manageable over time.
Arrears
Arrears occur when you miss one or more mortgage repayments. Falling into arrears can affect your credit rating and may lead to legal action if unresolved. Contact your lender immediately if you’re struggling to pay.
Approval in Principle (AIP)
An AIP is a letter from a lender stating how much they may be willing to lend, based on an initial assessment of your financial situation. It’s not a full mortgage approval but helps guide your property search.
Broker
A mortgage broker is a specialist who connects you with lenders and helps find the most suitable mortgage for your needs. They offer advice, handle applications, and may charge a fee or earn commission from the lender.
Building Insurance
Building insurance protects the structure of your home, including walls, roof, fixtures, and fittings, against risks such as fire, flood, or storm damage. Most lenders require this cover as a condition of the mortgage.
Building Energy Rating (BER)
A BER measures how energy-efficient a home is, rated from A (most efficient) to G (least efficient). It considers factors such as heating, insulation, and ventilation. An up-to-date BER is required for most property sales.
Breakage Cost/Break Fee
A fee charged if you repay your fixed-rate mortgage early or switch lenders before your fixed term ends. This compensates the lender for the loss of expected interest.
Buy-to-Let (BTL)
A buy-to-let mortgage is designed for purchasing a property you plan to rent out rather than live in. These usually require a larger deposit than standard residential mortgages.
Capital
Capital is the total amount you borrow from a lender to buy your home, excluding interest. Each mortgage repayment reduces your capital balance over time.
Collateral
Collateral is the property or asset used as security for your mortgage loan. If you fail to repay, the lender can take possession of the collateral to recover the debt.
Chain
A chain occurs when several property transactions are linked. For example, you’re buying from someone who needs to sell their home to buy another. If one sale falls through, it can delay or collapse the entire chain.
Contents Insurance
Contents insurance protects your personal belongings inside the home, such as furniture, electronics, and clothing, against theft, fire, or damage. This is separate from building insurance.
Contract
A contract is a legally binding agreement between buyer and seller confirming the sale of a property. Once signed, both parties are obligated to complete the transaction.
Debt-to-Income (DTI) Ratio
This is a measure of how much of your monthly income goes toward paying debts, including your mortgage. Lenders use this to assess affordability and decide how much you can borrow.
Deed
A legal document that proves ownership of a property and outlines the terms of transfer from seller to buyer. It’s signed during the conveyancing process and held by your lender until the mortgage is repaid.
Deferred Start
Some lenders offer a deferred start, allowing first-time buyers to delay their initial mortgage repayments by 1–3 months. The missed payments are added to your loan balance. Use with caution, as it increases total interest.
Deposit
This is the upfront amount you contribute toward the purchase of your property. For first-time buyers, it’s typically at least 10% of the property’s price. A higher deposit may help you access better mortgage rates.
Direct Debit Mandate
An authorisation that allows your lender to automatically deduct your mortgage repayment from your bank account each month. This guarantees timely and consistent payments.
Disbursements
Costs paid by your solicitor on your behalf during the property purchase. These can include stamp duty, land registry fees, and other admin expenses. You’ll usually reimburse these as part of your legal bill.
Discounted Mortgage
A mortgage product that offers a discount off the lender’s standard variable rate for a set period. It’s often aimed at first-time buyers to make early repayments more affordable.
Drawdown
Drawdown is the release of your mortgage funds from the lender to your solicitor so they can complete the purchase of your home. It usually happens after contracts are signed and all conditions are met.
EcoSaver Fixed Rate
A discounted mortgage rate based on your property’s energy efficiency rating (BER). The better the BER, the lower the fixed interest rate you may qualify for. BER certification is required to apply.
Equity
Equity is the difference between your home’s market value and the amount you still owe on your mortgage. For example, if your property is worth €300,000 and your mortgage balance is €200,000, you have €100,000 in equity.
Equity Release
Equity release allows you to borrow money against the value of your home. If your home’s value is higher than your mortgage balance, you may be able to access funds for home improvements, education, or other needs.
Estate Agent
An estate agent represents the seller in a property sale. They market the home, arrange viewings, negotiate offers, and aim to secure the best possible price for the property.
Exchange of Contracts
This is the point in the purchase process when the buyer and seller sign contracts, making the agreement legally binding. After exchange, pulling out of the sale can result in financial penalties.
Failed Valuation
This happens when a property’s valuation report does not support the purchase price, often leading the lender to decline the mortgage or reduce the loan amount offered.
Fixed Rate Mortgage
A mortgage where the interest rate is locked in for a set period (e.g., 1, 3, 5, or 10 years). Your monthly repayments remain the same, offering stability even if interest rates rise.
First-Time Buyer
Someone purchasing their first home and who has never previously owned a property in Ireland or abroad. First-time buyers may qualify for special rates or schemes like Help to Buy.
Freehold
Full ownership of a property and the land it’s on. Unlike leasehold, you do not pay ground rent, and your ownership has no time limit.
Gazumping
This occurs when a seller accepts a higher offer from another buyer after already agreeing to sell to someone else. It’s legal but frustrating for the original buyer.
Ground Rent
A small, often annual, fee paid by leaseholders to the freeholder. It applies only to leasehold properties and is usually outlined in the lease agreement.
Guarantor
A person who agrees to cover mortgage repayments if the borrower cannot. Guarantors are less common today, as most lenders prefer applicants to qualify on their own income.
Help to Buy (HTB) Incentive
A government scheme that helps first-time buyers with their deposit. It offers a refund of income tax and DIRT paid over the past 4 years, up to €30,000 or 10% of the property price.
Home Bond Guarantee Scheme
A warranty scheme that protects new build homes against structural defects for a set period. It helps maintain quality standards in the building industry.
HB47 Certificate
A certificate issued under the Home Bond scheme confirming the property is registered and covered. It’s typically needed for drawdown of mortgage funds on new builds.
High Value Mortgage (HVM)
A mortgage product available when borrowing €250,000 or more. It may offer a lower interest rate than standard mortgages, though it typically excludes cashback offers.
Home Insurance
Mandatory insurance that covers the structure of your home against damage from fire, flood, theft, and other risks. It must be in place before your mortgage can be drawn down.
Indemnity Insurance
An insurance policy that protects the lender if the borrower defaults on their mortgage. It does not protect the borrower, it’s for the lender’s security.
Index Linked
A mortgage repayment option where your monthly payments increase annually by a fixed percentage or rate of inflation. This helps reduce the total interest paid over time.
Interest Rate
The percentage charged by the lender on the amount you borrow. It can be fixed, variable, or split. The interest rate affects your monthly mortgage repayment.
Improver
A customer who improves their property’s BER (Building Energy Rating) by at least one full grade (e.g., from C3 to B1) may qualify for a better EcoSaver interest rate.
Joint Agents
When two separate estate agents are appointed by the seller to market and sell the same property. This can help reach a broader buyer audience.
Joint Mortgage
A mortgage taken out by two or more people. All parties are equally responsible for repayments, and lenders assess all incomes when determining borrowing limits.
KBC
Previously a mortgage lender in Ireland. KBC exited the Irish market, and existing customers were transferred to other providers.
Land Registry
A government office that records the legal ownership of land and property. Your solicitor registers you as the new owner after your property purchase.
Leasehold
A type of property ownership where you own the building but not the land it’s on. You lease the land from a freeholder for a set number of years and usually pay ground rent.
Legal Fees
Charges paid to your solicitor for handling the legal work involved in buying a home, including contract review, title checks, and registration of ownership.
Life Assurance (Mortgage Protection)
An insurance policy that pays off your mortgage if you die during the loan term. It’s a legal requirement for most residential mortgages in Ireland.
Loan-to-Income (LTI)
A rule that limits how much you can borrow based on your income. In Ireland, first-time buyers can borrow up to 4 times their gross annual income.
Loan-to-Value (LTV)
The percentage of your property’s value that you borrow as a mortgage. For example, borrowing €270,000 on a €300,000 home equals a 90% LTV.
Maturity Date
The final date of your mortgage term. On this date, the mortgage must be fully repaid, either through scheduled payments or a lump sum.
Monthly Repayment
The amount you pay each month to your lender, covering both interest and capital. The exact figure depends on your interest rate and loan term.
Moratorium (Payment Break)
A temporary pause in your monthly mortgage repayments, often available during major life events (like maternity leave or illness). Subject to lender approval.
Mortgage
A long-term loan used to buy a property. The property itself serves as security for the lender, meaning they can repossess it if repayments are missed.
Mortgage Break
A feature that lets eligible borrowers pause repayments for a few months. Limits apply (e.g., after 3 years of on-time payments, LTV must be under 85%).
Mortgage Interest Relief
A tax relief on the interest you pay on a qualifying home loan. It depends on the purchase year and can reduce your annual tax bill. No longer available for new mortgages but still relevant for older loans.
Mortgage Loan
The total sum borrowed from a lender to buy a property, typically repaid over 20–35 years, with interest.
Mortgage Offer Letter
An official letter from the lender confirming approval of your mortgage. It outlines the loan amount, term, interest rate, and all terms and conditions.
Mortgage Protection
A life insurance policy required by lenders, ensuring your mortgage is paid off if you die during the mortgage term (or suffer a serious illness if selected).
Mortgagee
The lender (e.g., a bank or credit union) that provides the mortgage.
Mortgagor
You, the borrower who takes out the mortgage.
Mortgage Term
The agreed length of time over which you’ll repay your mortgage, usually 25 to 35 years in Ireland.
Negative Equity
When your home is worth less than the amount you still owe on your mortgage. For example, if you owe €250,000 and the property is worth €220,000, you’re in negative equity of €30,000.
Payment Break (Moratorium)
A temporary pause in your mortgage repayments. Typically used during times of financial stress (e.g. maternity leave, illness, or large expenses). Approval is required, and interest usually continues to accrue.
Premium
The amount you pay, typically monthly, for an insurance policy, such as mortgage protection or home insurance.
Prepayment Clause
A clause in your mortgage agreement that outlines whether and how you can repay your loan early. It may include penalties or break fees, particularly on fixed-rate mortgages.
Principal
The original amount borrowed through your mortgage, before interest or fees. Your monthly repayments cover both principal and interest.
Principal Private Residence (PPR)
Your main home, the property you live in permanently. Mortgage terms and tax rules are often more favourable for PPRs than for investment properties.
Property Tax (LPT)
A Local Property Tax charged annually by Revenue, based on the market value of your home. It applies to residential properties and must be paid by the owner.
Redemption
Paying off your mortgage in full. This can happen at the end of the term or earlier if you sell the property or switch to another lender.
Remortgage
Replacing your current mortgage with a new one, often to secure a better rate, switch lenders, or release equity from your property.
Repayment Mortgage
A mortgage where each monthly payment reduces both the loan amount (principal) and the interest. By the end of the term, the mortgage is fully repaid.
Rent a Room Relief
A tax incentive that lets you earn up to €14,000 per year tax-free by renting a room in your principal private residence. It applies to private tenants only.
Retention
When the lender holds back part of your mortgage funds until specific property works are completed. Common with older or unfinished properties.
Searches
Legal checks done by your solicitor to confirm the seller has full ownership of the property and there are no legal issues or unpaid charges attached.
Snag List
A list of minor defects or issues identified in a newly built home before completion. The builder is usually responsible for fixing these before mortgage funds are released.
Solicitor
A legal professional who handles the legal aspects of buying a home, including contracts, title deeds, and liaising with the lender.
Split-Rate Mortgage
A mortgage that divides the loan into two parts: one on a fixed rate and one on a variable rate. It offers a balance between rate stability and flexibility.
Stamp Duty
A government tax paid when buying property in Ireland. The current rate is 1% on the first €1 million and 2% on the balance. Different rates apply for non-residential properties.
Structural Survey
A detailed inspection of a property’s condition carried out by a qualified surveyor. It identifies major and minor structural issues and is highly recommended for second-hand homes.
Surety
Another term for a guarantor, someone who agrees to repay the mortgage if the borrower is unable to do so.
Surveyor
A professional who conducts structural surveys and/or property valuations. Their reports are often required by lenders before issuing funds.
Term
The total length of time over which your mortgage is repaid. Terms typically range from 5 to 35 years.
Term Extension
An agreement with your lender to increase the length of your mortgage. This lowers monthly repayments but usually increases the total interest paid.
Terms and Conditions
The legal agreement outlining all obligations, rights, and responsibilities related to your mortgage. Always review these carefully before signing.
Title
The legal ownership of a property or piece of land. You cannot get a mortgage without a clear and clean title.
Title Deeds
The official documents proving ownership of the property. These are held by your lender until the mortgage is fully repaid.
Undertaking
A legally binding promise from your solicitor to your mortgage lender. It confirms that all legal documentation will be completed correctly and the borrower’s title to the property is valid.
Valuation
An assessment of a property’s market value carried out by a qualified valuer, usually on behalf of the lender. It confirms the property is worth the amount being borrowed.
Variable Rate Mortgage
A mortgage with an interest rate that can rise or fall over time, usually based on changes in the lender’s rate or external economic factors like the ECB rate.
Vendor
The legal term for the person or party selling a property.
Waiver
A formal declaration that a lender or solicitor will not enforce a specific term or condition in a mortgage contract. Waivers are typically documented in writing.
Work in Progress (WIP)
Used in self-build or renovation mortgages, this term refers to the current state of construction. Lenders often release funds in stages based on WIP progress.
Yield
Commonly used in investment or buy-to-let properties, yield refers to the return on investment from rental income. It’s calculated as a percentage of the property’s value.
Example: If a property worth €200,000 generates €10,000 in annual rent, the gross yield is 5%.
Zero-Deposit Mortgage (rare)
A type of mortgage where the borrower does not need to provide a deposit. These are extremely rare in Ireland and typically only available under specific schemes or guarantees (e.g. family guarantor mortgages).
