Buy-to-let Mortgages Ireland: How Much Can You Borrow for a Buy-to-Let?

Rental Yield, Stress Tests and Lender Criteria Explained

Investing in a buy to let property Ireland has become an increasingly appealing option for both experienced landlords and newcomers to property investment. But before you take the leap, one major question must be answered: how much can you actually borrow for a buy-to-let mortgage?

Unlike residential mortgages, the lending rules for buy to let mortgages are more complex. They depend on rental income, stress testing, loan-to-value limits, and lender-specific criteria. This guide by Money Maximising Advisors breaks down everything you need to know — from rental yield calculations to pension-based buy-to-let options — so you can invest with confidence and clarity.

1. Understanding Buy-to-Let Borrowing in Ireland

A buy-to-let mortgage in Ireland is designed for borrowers who want to purchase a property to rent out rather than live in. Because lenders consider these loans riskier than residential mortgages, the approval criteria tend to be stricter.

Here are the key differences:

• Higher deposits required
  
• Stricter affordability checks
  
• Higher stress-test rates
  
• Rental income plays a significant role in borrowing limits
  

If you’re planning to invest in property buy to let Ireland, knowing these factors upfront will help you prepare financially and understand what lenders are looking for.

2. Deposit Requirements and Loan-to-Value (LTV)

For most buy-to-let mortgages in Ireland, lenders typically require a minimum 30% deposit. This means the maximum loan-to-value (LTV) available is usually around 70%.

What this means in practice

• Property price: €300,000
  
• Maximum borrowing: €210,000 (70% LTV)
  
• Required deposit: €90,000
  

This is the first major filter lenders use when assessing eligibility. Even before considering rental income or affordability, you must meet this deposit threshold.

3. Loan-to-Income (LTI) and Affordability

Unlike residential mortgages — where your personal income is central to approval — buy-to-let lending places greater emphasis on the income generated by the property itself.

However, your personal income is still considered. Lenders want to know that you can cover mortgage payments during vacancy periods or unforeseen situations.

In many cases:

• Your income must meet minimum requirements
  
• You must show stable financial history
  
• Existing debt will be factored into affordability
  

For borrowers considering a pension buy to let mortgage, pension income or lump-sum accessibility may also be evaluated as part of affordability.

4. Rental Yield: A Core Component of Your Borrowing Power

Rental yield is one of the most important metrics when analysing how much you can borrow for a buy to let mortgage Ireland.

How to calculate gross rental yield:

Annual rental income ÷ property value × 100

For example:

• Rent: €1,400 per month (€16,800 annually)
  
• Property value: €250,000
  
• Gross rental yield: 6.72%

Higher yields mean higher borrowing capability because lenders want reassurance that rental income can comfortably cover mortgage payments.

In Ireland, gross rental yields on buy-to-let property typically range between 4% and 8%, depending on location and property type.

5. Rental Income Stress Tests (ICR Requirements)

One of the most crucial elements in determining how much you can borrow is the lender’s Interest Coverage Ratio (ICR) requirement. This is a stress-test calculation that ensures rent will still cover payments even if interest rates rise.

What lenders typically require:

• Rental income must cover mortgage payments by 125%–145%
  
• Mortgage payments are calculated at a stress rate, not current rate
  
• Stress rate may be fixed (e.g., 5–6%) or product rate plus a buffer
  

Example of stress-testing

If your stressed mortgage payment is €1,200 per month and the lender requires 130% coverage:

Required monthly rent = €1,200 × 1.3 = €1,560

If your property can only generate €1,450, you may not qualify for the loan amount you’re seeking.

This is why so many investors rely on advisors like Money Maximising Advisors — small differences in rent or stress rate can significantly alter your borrowing capacity.

6. What Affects Your Buy-to-Let Stress Test?

Several factors determine how strict the stress test will be:

1. Type of mortgage product

Fixed-rate mortgages often benefit from lower stress rates compared to variable ones.

2. Length of fixed-rate period

The longer the fixed period, the more favourable the stress assumptions may be.

3. Your tax status

Higher tax obligations mean your rental income may need to be higher to pass the coverage test.

4. Personal financial profile

If your income or pension is strong, some lenders may use “top-slicing” — allowing personal income to supplement rental shortfalls.

7. Borrowing Through Pension Funds (Pension Buy-to-Let)

A pension buy to let mortgage is becoming a popular route for those looking to use pension assets or pension income to invest in rental property.

In Ireland, certain lenders will:

• Consider pension income for affordability
  
• Allow pension-backed mortgage structures
  
• Offer tailored products for retirement-age investors
  

However, this path requires more documentation and stricter analysis. You may also need professional pension advice before exploring this option.

Money Maximising Advisors regularly supports clients with pension-based buy-to-let strategies and can help you structure this approach properly.

8. Additional Costs Lenders Expect You to Account For

Even though rental income forms the main basis of your borrowing limit, lenders want to ensure you can handle the ongoing responsibilities of being a landlord.

You’ll need to factor in:

• Property management fees
  
• Repairs and maintenance
  
• Insurance premiums
  
• Tax on rental profit
  
• Void periods
  
• Annual compliance and certifications
  

Good financial planning for a buy to let property Ireland means budgeting properly and having reserve funds aside for property-related costs.

9. A Practical Example of Buy-to-Let Borrowing in Ireland

Let’s look at a real-world scenario.

Property value: €270,000
Deposit required (30%): €81,000
Loan amount: €189,000
Estimated rent: €1,500 per month

If the lender tests the mortgage using a 5.5% stress rate over an interest-only basis:

• Monthly stressed payment ≈ €865
  
• Required rent at 130% coverage = €1,124.50
  

Since your projected rent is €1,500, you comfortably pass the rental coverage test, meaning you stand a good chance of qualifying for the full loan amount.

If rent were at €1,200 instead, you would still pass — but with a tighter margin.
If rent were only €1,000, you would not qualify for the desired amount.

This shows how rental income directly shapes your borrowing power.

10. Tips to Maximise Your Borrowing Capacity

If you want to secure the highest possible borrowing limit for buy to let mortgage Ireland, consider the following strategies:

✔ Choose a property with strong rental demand

City centres, university zones, and commuter belts usually yield higher rent.

✔ Increase your deposit

A higher down payment can help you access better rates and pass stress tests more easily.

✔ Improve personal income profile

Lenders reward stability — especially when stress-test margins are tight.

✔ Consider a fixed-rate mortgage

This often results in lower stress rates during lender assessment.

✔ Work with an experienced adviser

BTL lending criteria vary widely between lenders. Specialists like Money Maximising Advisors know which lender suits which type of investor.

11. The Final Checklist Before You Apply

Before applying for a buy-to-let mortgage in Ireland, ensure you have:

• Minimum 30% deposit
  
• Evidence of achievable rental income
  
• A clear understanding of rental yield
  
• Awareness of stress-test thresholds
  
• Clean credit history
  
• Realistic budget for landlord expenses
  
• Proof of income (employment, self-employment, pension etc.)
  

Whether you’re buying your first property buy to let Ireland or expanding an existing portfolio, preparation is essential.

Conclusion: How Much You Can Borrow Depends on the Property — and the Planning

Your borrowing limit for a buy to let mortgage Ireland depends overwhelmingly on:

• Rental income
  
• Lender stress rates
  
• Deposit amount
  
• Your overall financial profile
  

While the 70% LTV rule provides a starting point, the real limit is set by rental yield and stress tests. By understanding these factors — and working with specialists like Money Maximising Advisors — you can secure the loan structure that best supports your property investment goals.