Rent payments: Should they be calculated when applying for a mortgage?

Anyone looking to buy a home at present will be all to aware how difficult it is.

Firstly, there’s the task of finding something suitable to your needs – something that is not always easy given the fact that demand still far exceeds supply.

That’s a situation unlikely to get much better in the not-too-distant future either with the latest figures from the Housing Agency showing that many areas of the country were behind on the target set for 80,000 new builds to be built nationally by 2018.

Dublin and Galway both lagged behind but also did the commuter counties of Wicklow, Meath, Kildare and Louth.

Even when you do find that ‘dream home’ though, you still have to pay for it and that has been made that bit more difficult by the Central Bank’s lending rules.

A 10% or 20% deposit is quite a substantial sum of money and with interest rates on the floor, saving for one is all the harder.

Even if you do manage to come up with a deposit, you still have to meet the bank’s criteria to be approved for a loan.

One of the many sticklers in the mortgage application process nowadays is that people with a track record of paying rent do not have this taken into account when applying for a home loan.

In a lot of cases people are actually saving money each month by buying a property rather than renting but this is not accounted for.

Could that be set to change though? The Construction Industry Federation feel it should.

This week they called for rent payments to be taken into account in the mortgage application process and warned that developers were reluctant to build if mortgages are not available for buyers.

Director General of the Construction Industry Federation, Tom Parlon, has said the Central Bank should give credit to people who have a track-record of renting, to make it easier for them to get a mortgage.

He said: “The typical first time buyer now, the typical people getting married now are older, because they haven’t been buying for the last number of years.

“So the chances are they have been renting for a period, they could be paying €1600 a month, that is €19,000 a year and they have a track record of that.

“Their actual mortgage would actually be less than that in a lot of situations.”

• Do you agree with the CIF?


• Should rent payments be taken into account in the mortgage process?


• Are you looking to buy and feel you could have cheaper monthly repayments on a mortgage than by renting?

Have your say below…

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