Mortgage Exemptions Ireland Explained | LTI & LTV Exceptions

A mortgage exemption, sometimes called an exception, allows a lender to go beyond Central Bank rules.

In simple terms, it means you might be able to borrow more than usual or buy with a smaller deposit than standard requirements would allow.

Banks are only allowed a limited number of these each year, so they tend to go to applicants with high incomes, clean financial histories, and solid savings behind them.

That’s the basic idea.

But there are actually two different types of exemptions, and understanding the difference helps make sense of how they work.

There are two types of mortgage exemptions

The first is a loan-to-income exemption.

This allows you to borrow more than the standard income limit. Most buyers are capped at around 4 times their income, but with an exemption, that can stretch to around 4.5 times depending on the lender.

The second is a loan-to-value exemption.

This relates to your deposit. Instead of needing the usual percentage upfront, the bank may allow you to borrow a higher portion of the property value, which reduces the amount of cash you need.

In reality, most of the attention goes to the loan-to-income side, because that’s what determines how much you can actually borrow.

But both exemptions are limited, and banks are selective about who gets them.

If you’re being offered one, it usually means your application is strong.

It also means the margin for error gets tighter as you move toward drawdown.

Where things actually go wrong

Getting mortgage approval, even with an exemption, doesn’t mean you’re finished.

Before the bank releases funds, two things still need to be in place.

Home insurance, which is usually straightforward, and mortgage protection, which isn’t always.

Your mortgage approval is based on factors such as income, savings, and repayment capacity.

Mortgage protection is based on your health.

That’s where the uncertainty comes in.

Insurers don’t all assess risk the same way. One might accept your application straight away, another might load the premium, delay the decision, or ask for further medical information.

The order you apply in matters more than most people realise, because once a decision is made, it doesn’t just disappear.

It can affect what happens next.

Why timing matters more than people think

The pattern we see all the time is simple.

Someone gets mortgage approval, often with an exemption. They go sale agreed, sign contracts, and assume everything else will fall into place.

Then the insurance application starts.

At that point, insurers may request a GP report, look for clarification on previous tests, or pause things while something minor is followed up on.

It doesn’t have to be serious. In reality, it’s often the small, unresolved things that cause the biggest delays.

That’s when pressure builds.

There’s a closing date, a solicitor involved, and suddenly everything depends on an underwriting decision that isn’t fully in your control.

Why exemptions increase the risk

If you’ve been granted an exemption, you’re usually borrowing more than standard limits allow.

That means a larger mortgage, a higher level of mortgage protection, and more reliance on everything lining up perfectly at drawdown.

So while exemptions can help you secure the property, they also raise the stakes if anything slows down on the insurance side.

How to approach it properly

The safest approach is straightforward, but it’s often missed.

Get your mortgage protection lined up early, be upfront about anything medical from the start, and make sure you’re not just applying to the first insurer you come across.

Different insurers will view the same case differently, so the result can change depending on where you apply first.

Being accepted isn’t always the same as getting the best terms, and applying to thw rong insurer first can narrow your options.

If mortgage protection is delayed or isn’t possible, the bank won’t release funds.

It doesn’t matter whether you’ve been given an exemption or not.

You’re then left scrambling for a waiver when it could have been agreed weeks ago.

This is the part of the process that causes the most stress, because everything else can be lined up and still fall over at the last minute if cover isn’t sorted properly.

If you’re unsure whether anything in your situation could cause a delay, it’s worth checking before you commit.

Start here and we’ll point you in the right direction.