More first-time buyers in Westmeath and Roscommon eligible for Government fund

More potential first-time buyers in Westmeath and Roscommon are now eligible for a specific fund to help bridge the gap between a mortgage and deposit and the price of new home.

The First Home Scheme is a €740m fund set up as part of the Government’s Housing for All strategy.

This changes follows the latest of the scheme’s scheduled twice-yearly reviews of the price ceilings that apply to qualifying homes.

The review has resulted in increased price ceilings in 17 of Ireland’s 31 local authority areas, with each of these 17 local authority areas seeing an increase of €25,000 in the relevant ceiling.

In Westmeath, the ceiling has risen from €375,000 to €400,000 and from €350,000 to €375,000 in Roscommon.

The scheme is a joint venture between the State and three banks, currently AIB (including EBS and Haven), Bank of Ireland and PTSB, with an ability for other authorised mortgage lenders in the Irish market to join the scheme.

The changes, which took effect on January 1 allow additional First-Time Buyers to qualify for the scheme. These people would have been ineligible for the scheme until now if the price of their chosen home was above the price ceiling for their local authority area. The changes may also encourage the supply of additional new homes in areas with low stock of new homes currently.

The aim of the price ceilings is to ensure the scheme can benefit as many people as possible without causing distortion in local housing markets.

How the First Home Scheme works

The €740 million Scheme provides financial support to borrowers and facilitates them in purchasing a new home (or building their own home) that they could not otherwise do after combining their available mortgage and deposit.

By bridging the gap between the available mortgage, deposit and the price of the new home, the Scheme will make the prospect of home ownership possible for many for the first time.

Example

First-Time Buyer income: €75,000

Maximum borrowing (4x income): €300,000

Property purchase price: €400,000

Deposit: €40,000 (10% of purchase price)

Maximum that First-Time Buyers can pay without support: €340,000

Affordability gap: €60,000

Outcome: First Home Scheme can provide €60,000 in return for a 15% equity stake in the property.