I want to buy a house but have no deposit: rent-to-own and low-deposit options (guide)
In Ireland, certain schemes allow households to explore home-ownership pathways with reduced upfront costs. This guide explains rent-to-own models, shared equity schemes, lender requirements, and the documentation typically needed. It helps readers understand how these structures work before assessing whether they may fit their circumstances.
Buying a home in Ireland without a large upfront deposit is challenging, but not impossible. Beyond saving, there are structured options that can bridge the gap: private rent-to-own agreements, State-backed supports like the First Home Scheme and Help to Buy, and low-deposit mortgages assessed under Central Bank rules. Understanding how each works, what it costs over time, and the paperwork lenders require will help you choose the route that best fits your situation.
How rent-to-own works in Ireland
Rent-to-own (often called “rent-to-buy”) is not a national programme; it is a private agreement typically offered by individual landlords or developers. You rent a home for a fixed period—commonly one to three years—with an agreed option to purchase. Some contracts credit a portion of your monthly payment toward the future purchase price or treat an initial reservation/option fee as part of the deposit. The purchase price may be fixed upfront or set by a valuation at the time you buy. Because terms vary widely, independent legal advice is essential. Clarify whether any rent credit is forfeited if you decide not to buy, how repairs and service charges are handled during the rental phase, and what happens if you miss payments. Keep in mind that stamp duty is due only on purchase, not during the rental period, and that availability of rent-to-own opportunities is uneven across the market.
Shared equity schemes and criteria
Ireland’s First Home Scheme (FHS) offers a State-backed equity stake to bridge the “funding gap” between your mortgage (plus deposit) and the new-build home’s price, up to scheme limits. In general, eligible first-time buyers and qualifying “fresh start” applicants must buy a new-build within local price caps and have mortgage approval from a participating lender. The equity share can be up to 30% (capped at 20% if you also use Help to Buy). No charge applies for the first five years; from year six, a service charge applies and increases in later decades. You can redeem the equity in part or in full over time, or on sale. Help to Buy (HTB) is a separate Revenue refund of Income Tax and DIRT paid over the previous four years, worth up to 10% of the purchase price capped at a monetary limit, for qualifying new-builds and self-builds. Many buyers combine HTB with FHS to reduce the cash deposit required.
Lender requirements and evaluations
Most first-time buyers are assessed under Central Bank of Ireland mortgage measures. Broadly, first-time buyers can borrow up to four times gross annual income (loan-to-income) with a minimum 10% deposit (loan-to-value of 90%), though limited lender exceptions may exist each year. Lenders stress-test affordability against higher interest rates, review net disposable income, and factor in existing commitments like loans, childcare, and credit cards. They check your repayment history on the Central Credit Register, examine the stability of your employment (including probation periods and variable pay), and look for consistent saving or rent payment patterns. If your profile is marginal, the Local Authority Home Loan may be an alternative for eligible applicants who can’t secure adequate finance from two banks, subject to income limits, property price caps, and credit checks.
Needed documents for affordability checks
Be prepared to provide clear, consistent documentation. Typical requirements include: photo ID and proof of address; recent payslips (usually last 3 months) and a salary/employment confirmation letter; bank and credit card statements (often 6 months); evidence of savings and rent payments; and details of existing loans. Many lenders also request your Revenue Employment Detail Summary and recent Statement of Liability. Self-employed applicants usually need two to three years of accounts, tax returns, and an accountant’s letter. Keep documentation aligned with the name and address on your application, and avoid unexplained large transactions.
How to compare ownership pathways
When weighing rent-to-own versus low-deposit mortgages and shared equity, compare: deposit required now, monthly outlay, and total long-run cost. Consider flexibility (can you exit early or redeem equity?), legal complexity, and risks (e.g., if a rent-to-own purchase falls through). For example, on a €350,000 new-build, a first-time buyer typically needs a €35,000 deposit. Help to Buy could cover some or most of this (subject to the cap and your tax paid), potentially leaving a smaller cash contribution plus purchase costs. With the First Home Scheme, an equity share reduces the mortgage you need but introduces a future service charge and redemption planning. Always check eligibility criteria, local price caps, and the fine print of any contract.
Here is a concise, factual comparison of common Irish pathways:
| Product/Service Name | Provider | Key Features | Cost Estimation (if applicable) |
|---|---|---|---|
| Private rent-to-buy agreement | Private developers/landlords (varies) | Fixed rental period with option to purchase; may include option fee and rent credit toward price; terms vary by contract; legal review essential | Costs vary by agreement; may include an upfront option/reservation fee and a rent premium; final price per contract |
| First Home Scheme (shared equity) | First Home Scheme DAC (State-supported) | Equity stake up to 30% (20% if combined with HTB) on eligible new-builds; local price caps; redeemable over time | No service charge years 1–5; service charge applies from year 6 and rises in later years; legal/valuation fees apply |
| Help to Buy (deposit support) | Revenue Commissioners | Refund of Income Tax/DRT paid over prior years; up to a percentage of price capped at a monetary limit; for qualifying new-builds/self-builds | Can reduce cash deposit needed; value depends on your tax paid and scheme cap |
| Local Authority Home Loan | Local Authorities | Fixed-rate mortgage for eligible applicants unable to secure adequate bank finance; price caps and income limits apply | Fixed interest rate set periodically; deposit typically 10% (can be combined with HTB); fees and valuation costs apply |
| Standard bank mortgage (FTB) | AIB, Bank of Ireland, PTSB and others | Assessed under Central Bank rules; LTI usually up to 4x income; LTV up to 90% | Deposit about 10% of price; interest rate depends on lender/product; legal and valuation fees apply |
Prices, rates, or cost estimates mentioned in this article are based on the latest available information but may change over time. Independent research is advised before making financial decisions.
Real-world cost/pricing insights: the headline challenge is funding the deposit and total cost of credit. On a €350,000 home, a 10% deposit is €35,000. If your HTB entitlement is €25,000, you still need €10,000 in cash plus purchaser costs (legal, valuation, stamp duty at 1% up to €1m). Using the First Home Scheme might reduce the mortgage needed by taking, say, a 10–20% equity share, lowering monthly repayments initially but adding a future service charge and redemption requirement. In rent-to-own, monthly payments may be higher than market rent if part is credited toward purchase; if you don’t complete the purchase, you may lose some credits or fees, depending on the contract.
Conclusion: If you have little or no deposit, map your eligibility first (HTB, FHS, Local Authority Home Loan), secure in-principle mortgage feedback to anchor your budget, and only consider rent-to-own where terms are transparent and independently reviewed. Compare not just what gets you the keys, but the long-run obligations, flexibility to exit or redeem, and the resilience of your plan if rates, income, or property values change.
