What Is a Mortgage Exemption?

Updated: August 2025 | Originally published: 2022

Food prices are on the up, petrol is through the roof, and mortgage interest rates? Yep, they’re on the rise too. Inflation has us in a chokehold.

And while we’re all just trying to survive the next bill, the dream of owning a home is starting to feel like a fantasy. Everyone’s looking for a way — any way — to get on the ladder.

One such way? A mortgage exemption.

What is a Mortgage Exemption?

A mortgage exemption (aka a mortgage exception) is a little loophole that lets you borrow more than the usual Central Bank rules allow.

There are two types:

• Loan to Income : LTI Exemption – lets you borrow more than 4x your income
• Loan to Value : LTV Exemption – lets you reduce your deposit below the standard minimum

But here’s the kicker: lenders only have a limited number of exemptions to hand out. So, it’s not a case of applying and getting one — it’s more like applying and hoping for the best.

1. How to Borrow More Than 4x Your Income (LTI Exemption)

The Central Bank’s general rule is that you can borrow up to 4x your gross annual income.

But with an LTI exemption, you could borrow up to 4.5x.

Let’s say you earn €60,000:

• Normal max loan: €240,000
• With LTI exemption: €270,000

That extra €30k could be the difference between a shoebox and a three-bed semi.

But — and it’s a big but 🍑— only a small percentage of borrowers get these exemptions. Lenders can only offer them to:

• Up to 15% of first-time buyers
• Up to 15% of second/subsequent buyers

Tip: Apply early in the year. Anecdotally, exemptions are easier to get when lenders have just reset their yearly quota.

2. How to Reduce Your Mortgage Deposit (LTV Exemption)

Normally:

• First-time buyers must have at least a 10% deposit
• Second/subsequent buyers must have 20%

With an LTV exemption, though, your lender may allow:

• First-time buyers to go below 10%
• Second/subsequent buyers to go below 20%

Say you’re a first-time buyer looking at a €300,000 property:

• Standard deposit: €30,000
• With exemption: maybe as low as €15,000

Again, lenders have a limit:

• Just 5% of first-time buyers may get an LTV exemption
• Up to 20% of second-time buyers

It’s rare, but not impossible. Just don’t bank on it (pardon the pun).

Can You Get Both Exemptions?

In theory? Maybe. In reality? It’s rarer than a sunny Bank Holiday weekend in Offaly.

Mortgage lenders really don’t like giving both, so if it ever happens, it’s swiftly followed by an NDA and a blood oath.

Can You Get an Exemption When Switching?

No way José.

Exemptions apply only to purchases, not to switchers.

If you’re switching for a better rate, you’ll need to stay within standard lending limits.

The Lion.ie Magic Formula for Getting an Exemption

There’s no guaranteed way to get an exemption, but if you tick the right boxes, you’ll boost your chances:

• ✅ Strong income
• ✅ Secure employment (especially public sector)
• ✅ Clean credit record
• ✅ No overdrafts or dodgy transactions
• ✅ Minimal existing debt

Basically: the more boring your financial life is, the better. 🥱

If you’ve got some chaos in your bank statements — mystery Revolut payments, bouncing direct debits, late loan repayments — clean it up before applying.

Thinking of Buying? Get Your Ducks in a Row

If you’re planning to buy within the next year, now’s the time to get your moolah in shape.

And when you get your mortgage approved, you’ll need mortgage protection to draw down — that’s where I come in.

Complete this short questionnaire, and I’ll sort you out with quotes from all five insurers, no obligation and no spam.

Thanks for reading.

Nick McGowan

Your man who makes mortgage protection slightly less of a pain in the hoop