This year there has been a definite uptick of enquiries into Moneytree Finance from renters who have been given a ‘Notice to Quit’ by their landlord, because he or she intends to sell the house amid the uncertainty created by the recent changes to Irish rental law. Since March 1, 2026, there are now increased restrictions on landlords around rent increases and ending a tenancy, and crucially going forward all new tenancy agreements will become ‘Tenancies of Minimum Duration’ (TMD) lasting for six years, provided the renters are meeting certain standard obligations (for example paying the rent on time). And rather than navigate this new rental world, many ‘small landlords’ (defined as those having three or fewer tenancies) are instead selling up, creating opportunities for some first-time buyers but also great uncertainty for those who are receiving the notice to quit.
Indeed, being told you must leave your rental property can feel incredibly overwhelming, especially amid the serious housing crisis Ireland is currently experiencing. In certain circumstances, however, it can present renters with the chance to buy the house they have been living in themselves. In fact, provided certain criteria are met, there is even a government scheme – the Tenant Home Purchase Scheme – designed for this exact scenario. Below, I will explain this scheme in much more detail.
The Tenant Home
Purchase Scheme
In general, mortgages for renters who have been given notice to leave operate in the same way they do for other prospective borrowers. If they are first-time buyers, they can qualify for a loan of ‘up to four’ times their annual income, either single or joint (depending on whether they are applying alone or with a partner), and if they are second-time buyers the maximum loan is up to 3.5 times their annual income. And, as always, whether or not the bank will release the full potential loan will depend on the applicants’ financial profile, bringing factors such as the general cost of living, whether the borrower has any dependents/children and/or loans, and how much they have been saving on top of the rent over the last six months, into play. Like all buyers, renters hoping to purchase their landlord’s house will also need a deposit of at least 10 per cent ‘and’ be able to afford the ‘extra’ fees and charges such as Stamp Duty (one per cent of the purchase price) and legal costs (we always tell people to budget ‘about’ €3,000 for a good solicitor).
Imagine, however, that a renter (let’s call him James) has €30,000 in savings and as a first-time buyer has been mortgage approved for €200,000, giving him an overall budget of €230,000, but the landlord wants at least €280,000 for the house? Here is where the Tenant Home Purchase Scheme can help. An offshoot of the better-known First Home Scheme, the Tenant Home Purchase Scheme operates along similar lines, with the one crucial difference that it can be used to purchase a second-hand house. Indeed, this is the only scenario (a renter buying the landlord’s house) in which any of the government-backed schemes can be used to buy a home that has already been lived in: both the Help to Buy and the regular First Home Scheme are strictly for new-builds only. In the simplified scenario outlined above, James is €50,000 short if he wants to purchase the home he has been living in; provided he meets the criteria, however, and is open to the government holding an equity share in his home (at least for a time), the Tenant Purchase Scheme will give him that €50,000, allowing him to own a property which would otherwise have been out of his reach.
Of course, as already mentioned, certain conditions must be met to avail of the scheme. In terms of the landlord/rental element, the renter ‘must’ have been served with a valid notice of termination, and the tenancy ‘must’ be above board and registered with the Residential Tenancies Board (RTB). Beyond this, though, the scheme operates in similar terms to the First Home Scheme: applicants must be first-time buyers, they must apply to one of the ‘pillar’ banks (Bank of Ireland, AIB, or PTSB) for the mortgage, and they must borrow their maximum amount available, meaning they can’t leave any borrowing power behind them. The maximum eligible purchase price in Cork County is currently €450,000 (in Cork City it is €500,000), and the maximum equity share receivable is 30 percent of the purchase price; the minimum is 2.5 percent or €10,000, whichever is higher. Crucially, those using the Tenants Home Purchase Scheme ‘cannot’ also use the ‘Help To Buy’ tax rebate otherwise available to first-time buyers, as they are not buying a new home but a second-hand one. In terms of cost, participants in the scheme pay nothing at all for the first five years (though they do of course pay their regular mortgage during this period), and then a simple interest charge of 1.75 percent from year six onwards. This then rises again incrementally from years 16 and then 30, up to a maximum of 2.85 percent ‘simple’ interest per year, which would still be one of, if not ‘the’, cheapest loans you could ever get.
In any case, many people will choose to buy back the equity share from the government long before year 30 of the loan, and this can be done in a lump sum and/or over a longer period of time. Buying back the equity is where the most major caveat of the Tenant Home Purchase Scheme lies, however, as it is the ‘share equivalent’ that applicants owe the scheme, not the euro amount they originally received. Let’s again use James as our example: if James takes the scheme’s €50,000 to buy his landlord’s house for €280,000 now, then the equity share of his new home held by the government will amount to 17.86 percent (let’s call this 18 percent to keep things simple!). Now imagine that 10 years passes and James has come into some money, perhaps via an inheritance or just by saving diligently over time, and he decides to buy back the scheme’s equity share – he will owe them 18 percent of his home’s value ‘at that point in time’, which well may no longer amount to the €50,000 he originally borrowed. If James’s home has risen in value to €350,000, for example, he will owe them 18 percent of €350,000, which is €63,000. On the other hand, though, if his home happens to fall in value (a less likely but not impossible scenario), he will owe the scheme ‘less’ than he originally borrowed.
As long as borrowers are willing to abide by the rules and criteria of the Tenant Home Purchase Scheme, and accept the fact that they may end up paying back a bit more than they originally received over time, then the scheme is a viable and useful option for renters who have been given notice and would like to buy the home themselves. Like all the government schemes, it is not perfect, but it does frequently get people into houses that they could otherwise not afford. If you think any of the above is relevant to you and have further questions, or you would like to discuss any mortgage query further, please don’t hesitate to contact Moneytree Finance today!
