BoI Mortgages

Was talking to them the other day as I had gotten approval on principle on their website but no follw up call- turns out the computer should have said no, to quote Little Britain.

We have 3 kids and they said you have to have in your account:

Enough to cover the monthly mortgage (no shit Sherlock)

€200 per child (ok)

After those deuctions, you have to have €1600 left in your account.

I am sure someone much smarter than me would be able to work out what salary you need to be on to afford a BoI mortgage

It isn’t the salary that counts, its the salary and mortgage you’re looking for. Child benefit is min €140 per month, so there’s only a net deduction of €60 per child.

It sounds like a ridiculous means test for anyone looking for a mortgate with repayments over about €1200 per month. Say you’re on a big salary - 5k net - would BOI give them a mortgage with repayments over 3k? I doubt it.

What interest rate were they quoting for this test? I don’t think is is as simple as suggested

Irony is, if you had no kids (but were 20/ 30 somethings of an age where you would be likely to have them) they’d make no deduction at all to allow for that possiblility. Hence we have swathes of young couples in NE who can’t afford to have kids, as the mortgage takes a huge whack of both incomes and leaves very little over.

As for child benefit - it’s only going one way - down… so anyone counting on that for the mortgage is in big trouble.

They based it on the variable BoI rate

Do you mean that you **have to have coming into your account each month ** … ?

I don’t think they are so wrong with this. 1600E is 400E a week on average for everything that isn’t child or mortgage related. Food. Electricity. Gas. Car repairs. Bus tickets.

While you reckon that maybe the 600E per month calculated on the children could cover this, you don’t say - for example - whether childcare is payable. If it is, I doubt that 600E would be remotely adequate for three children for a month. I don’t know what mortgage payment you are looking at but for me but having 1600E left over after mortgage payment would probably be a bit on the tight side if you want to make sure you occasionally have room to save some money for, say Christmas, updated car, new camera.

Nor do you say how much of a mortgage payment you are looking at but interest rates are only going up in the medium term. So you need to factor that into your calculations also.

I’m not sure that Bank of Ireland are being completely unreasonable here to be honest.

Deloitte Tax Calculator is handy for these calcs.

deloitte.ie/tc/Default.aspx

Having fiddled with that, I come up with the figure of a c.€60,000 salary requirement to meet the BoI criteria on a €300,000 loan. Thus:

€60,000 pa = €3,690 net pm
Less €2,200 pm (1600 + 600) = €1,490 left for a mortgage repayment
5 years fixed @ 4.39% over 30 years on a €300,000 loan = €1,490pm

So I rang my branch to complain and ask if BoI ar simpy not giving out mortgages- nice guy I spoke to said the guys on the 1850 number just put figures into a computr and if it says no thn it is no, no independence of thought- he said w shoud get approval no problem- he wpud send me out the forms

Nice guy may be talking through his hat - credit underwriting is centralised in BOI, so the branch do not have lending discretion for mortgages. They can put a good word in for you… but the underwriters have the power to say yay or nay. interesting to hear what the outcome is? keep us posted?