80/20 Deferred Payment Initiative
NAMA has launched a Deferred Payment Initiative (the ‘Initiative’). The Initiative aims to provide home buyers with a level of protection against a fall in residential property prices from current levels over the next five years. The initiative is available to owner-occupiers who wish to buy a new home.
- The initiative offers the home buyer 20% protection from the risk of further house price declines for the first five years of the mortgage.
- The home buyer must first obtain mortgage approval for the full mortgage amount (up to a maximum 90% of the purchase price) from an approved mortgage provider.
- Home buyers will pay 80% of the property’s value upfront. The remaining amount (up to 20% of the property’s value) will be paid in five years by the mortgage provider (on behalf of the home buyer) directly to NAMA. This will be calculated based on an independent assessment of the property’s value at that time. Please see example at the end of the page.
- Three mortgage providers have been approved for participation in the pilot; Bank of Ireland, Allied Irish Bank through its mortgage subsidiary EBS and Permanent TSB.
- NAMA does not own the properties for sale and is not providing mortgage finance in respect of the Initiative.
- Click here to download the Brochure on the 80/20 Deferred Payment Initiative.
- A list of developments that include properties approved for participation in the Initiative can be found here.
- NAMA is not selling the properties directly under the Initiative. The properties included are limited to those being sold by NAMA borrowers.
- Purchase transactions are undertaken in the normal manner, with contracts for sale exchanged between the home buyer and the purchaser.
- The contract for sale will include an annex detailing the rights and obligations of the home buyer, the vendor and NAMA with regard to the Initiative.
- The mortgages used to buy the properties will be provided by existing mortgage providers; Bank of Ireland, AIB through EBS and Permanent TSB.
- The mortgage provider will require home buyers to part-fund their purchase with a deposit of at least 10% of the value of the property.
- The mortgage will be provided in two instalments. The first instalment together with the home buyer deposit, equating to 80% of the purchase price, will be paid at the date of purchase.
- The second instalment, equating to 20% of the purchase price, will be paid in five years by the mortgage provider (on behalf of the home buyer) subject to the value of the property at that point.
- If the value of the property has fallen after five years, the deferred 20% payment will be reduced or cancelled depending on the level of reduction, e.g. a 15% fall in the property value would reduce the deferred payment to 5% of the purchase price.
- The value of the property after five years will be determined by an independent valuer, selected by the buyer from a panel of independent valuers appointed by NAMA.
- Mortgage Enquiries: For further information in relation to the availability of mortgage finance under the Initiative, please contact your local branch of Bank of Ireland, EBS or Permanent TSB.
I want to buy a house using the 80/20 Deferred Payment Initiative. What do I do?
2. GET DETAILS of qualifying residential property and their selling agents here NAMA Deferred Payment Initiative Eligible Properties Listing (314.3 KB, pdf format)
3. CONTACT the selling agent in relation to the property you would like to view.
4. APPLY to the local branch of Bank of Ireland, EBS or Permanent TSB for 80/20 Deferred Payment Initiative loan approval.
5. CONSULT your solicitor with regard to the contract for sale and mortgage loan.
If you require further information on the deferred payment initiative or if you have any difficulties downloading these documents please contact NAMA.
The sample scenario outlined below assumes that the buyer will contribute 10% equity on a property purchase of €200,000.
|Property Purchase Price||200,000|
|80%: 10% Buyer Deposit||20,000|
|80%: 70% Mortgage (1st Instalment)||140,000|
|20%: Deferred Mortgage||40,000|
|Year 5||Value |
|Value falls |
|Value falls |
|Value rises |
|Cost to Buyer||200,000||160,000||180,000||200,000|
|Final Property Valuation||200,000||160,000||180,000||210,000|
|Change in Value||0||(40,000)||(20,000)||10,000|
|Existing Buyer Deposit||20,000||20,000||20,000||20,000|
|Existing Mortgage (1st Instalment)||140,000||140,000||140,000||140,000|
|Deferred Mortgage (2nd Instalment)*||40,000||0||20,000||40,000|