How Irish Contractor Mortgages Actually Work: Central Bank Rules, Not Day-Rate Lenders

The same Central Bank loan-to-income (LTI) limits apply to contractors as to everyone else: 4 times gross annual income for first-time buyers, 3.5 times for second-time or subsequent buyers. On a €550/day rate, annualised at 46 working weeks (€126,500 a year), that caps borrowing at roughly €506,000 as a first-time buyer or €442,750 as a second-time buyer, assuming a lender accepts your day rate as sustainable income. There is no Irish equivalent of the UK's specialist day-rate mortgage lenders that ignore the LTI cap entirely.

Not in the same sense. In the UK, specialist lenders use a day-rate underwriting formula (day rate x 5 x 46 weeks) and multiply that figure by 4.5 to 5.5, producing borrowing amounts well above what the person's certified accounts would show. Irish lenders do not operate this way. Every mortgage in Ireland, contractor or PAYE, is subject to the same Central Bank loan-to-income caps, so a contractor's advantage in Ireland comes from which certified income figure a lender is willing to use, not from escaping the cap altogether.

The standard requirement across Irish lenders is two full years of certified trading accounts showing sustainable profit. Some lenders will consider less than two years for contractors specifically if there is an active, signed contract in place and demonstrable experience in the field, but this is lender-discretion territory, not a guaranteed exception. Applicants should also have a current Tax Clearance Certificate, their most recent Form 11 self-assessment return, and a Notice of Assessment (NOA) from Revenue.

All residential home buyers, including contractors and the self-employed, are subject to a 90% LTV limit, meaning a minimum 10% deposit. This applies uniformly regardless of employment structure. It sits alongside, not instead of, the loan-to-income limit: both the deposit requirement and the income multiple must be satisfied for a standard mortgage.

Sometimes, through the Central Bank's exemption allowance. Each lender can allow up to 15% of its annual first-time buyer lending, and up to 15% of its second-time buyer lending, to breach the standard income multiple, typically stretching to around 4.75 times income for exempted cases. However, banks do not have to use their full exemption quota, and exemptions tend to go to applicants with the strongest overall financial profile, not simply the highest earners. A contractor should not assume an exemption will be available and should plan borrowing around the standard 3.5x-4x multiples as the realistic baseline.

The calculator's contractor multiple range (3.5x to 4.5x annualised income) is an indicative illustration of typical outcomes across different lenders and applicant profiles, not a guarantee. The lower end aligns closely with the Central Bank's standard 3.5x second-time-buyer cap; the upper end assumes a stronger case, potentially including an exemption allowance, which is not available to every applicant. Treat the lower end of the range as your realistic planning figure and the upper end as an optimistic, exemption-dependent scenario.

Lenders typically look at your certified trading profit over the past one to two years, not your headline day rate. If your day rate has risen significantly in the most recent year, some lenders will use an average of the last two years rather than the current, higher figure, which can meaningfully reduce your borrowing capacity compared to a simple day-rate annualisation. Directors who pay themselves a mix of salary and dividends should expect lenders to look at total remuneration drawn from the company, not just the salary component.

This depends more on your accounts history than your current structure. Lenders want to see a consistent track record, so switching structures shortly before a mortgage application can actually work against you if it resets your certified accounts history to zero. If you are planning a house purchase in the next one to two years, it is worth discussing the timing of any structural change with both your accountant and a mortgage broker before making the switch, rather than assuming either structure is automatically better for lending purposes.