You can redeem (buy back) all or part of the FHS Equity Share at any time. However, you have no obligation to do so unless a mandatory redemption event occurs.
Redemption rules at a glance
- For redemptions of New Build and Tenant Home Purchase equity facilities within the first 6 months after drawdown, the redemption amount payable will be the amount originally drawn down
- For redemptions of Self-build equity facilities before the build is complete and within the first 2 years after drawdown, the redemption amount payable will be the amount originally drawn down
- A property valuation from an FHS approved valuer is required for all other redemptions
- Minimum redemption allowed for partial redemptions is 5% of the original FHS equity amount
- Up to two redemptions can be made during each 12-month period. For Self-builds, partial redemptions are not permitted until the build of your home is complete
- Any redemption payments must be made as a single payment (If this is above your daily payment limit you may need to talk to your bank to make arrangements for this)
- FHS may ask customers for additional documentation to comply with Anti Money Laundering (AML) regulations
If you buy back part of the equity share, it is called a partial redemption, or if you buy back all of the equity share it is called a full redemption.
As the FHS Equity Facility is linked to the value of your home, a current FHS property valuation is required to calculate all redemptions. Before you commit to any redemption payment, the FHS will provide you with a full quote to show you how the redemption has been calculated and any remaining equity share that the FHS will have in your property.
Redemption requests can be made through the FHS customer portal by completing a Redemption Request form, or by calling us on 0818 275 662.
Redemption Process
Login to your FHS customer portal
Complete Redemption Request form
- Download from the customer portal
Order Property Valuation
- Arrange a property valuation with an FHS approved valuer
Upload Form and Supporting Documentation
- Proof of identity, address
- Evidence of source of funds
- Property valuation
Receive Redemption Quote
- Review the details of your proposed redemption
Make Redemption Payment
- Arrange payment of funds by Electronic Funds Transfer (EFT)
Receive Redemption Payment Acknowledgment
- Review your updated account position
Once you complete a full redemption, your solicitor will then apply for the cancellation of the inhibition on your property.
New Build & Tenant Home Purchase Redemption examples
Important Information
Customers should be aware of the following FHS Redemption Rules:
- A property valuation from a FHS approved valuer is required for a redemption to be made 6 months after the drawdown of the equity facility.
- A valuation is valid for 12 months from the date of issue (other than the initial valuation).
- Only two redemptions can be made during each 12-month period after drawdown of the equity facility.
- The minimum redemption allowed is 5% of the original FHS equity amount.
- A full redemption is required in the circumstances outlined below. These are known as ‘trigger’ or ‘realisation’ events and are documented in the FHS Customer Contract:
- The customer moves or ‘switches’ their mortgage to a non-Participating Lender
- The customer sells the property
- The customer passes away
- The property is no longer the customer’s Principal Private Residence (PPR)
Redemption Examples
In the following examples, the property purchase price was €400,000 and the First Home Scheme provided the customer with €40,000 equity facility at drawdown, and so the FHS would have acquired a 10% equity share in the property.
|
Original Equity Position |
|
|
Property Purchase Price |
€400,000 |
|
Original First Home Scheme Equity Share Amount |
€40,000 |
|
Original First Home Scheme Equity Share Percentage |
10% |
Equity share = (€40,000 / €400,000) * 100 = 10%
Redemptions where property value has increased
This section explains how redemptions are calculated in the scenario where a property value has increased.
To make a redemption the customer will need a current valuation for the property. In these examples, the property has increased in value to €410,000.
Please note, all values used in these examples are for illustrative purposes only and are not intended to be specific to your property.
Scenario 1: Partial Redemption
If the customer redeems an amount e.g. €10,000, then the new First Home Scheme Equity Share is recalculated as follows:
Redemption percentage is the redemption amount expressed as a % of the updated property valuation i.e.
(€10,000 / €410,000) * 100 = 2.44%
The new First Home Scheme Equity Share is the original First Home Scheme Equity Share minus the redemption percentage i.e. 10% - 2.44% = 7.56%
|
Updated Equity Position – Partial Redemption where Property Value has Increased |
|
|
Original Property Valuation |
€400,000 |
|
Original First Home Scheme Equity Share Amount |
€40,000 |
|
Original First Home Scheme Equity Share |
10% |
|
Updated Property Valuation |
€410,000 |
|
Amount Redeemed |
€10,000 |
|
Redemption Percentage |
2.44% ((€10,000 / €410,000) * 100) |
|
Updated First Home Scheme Equity Share |
7.56% |
Scenario 2: Full Redemption
In the event of a full redemption, the First Home Scheme Equity Share is calculated as follows:
First Home Scheme Equity Share amount based on the valuation and equity share percentage is (€410,000 * 10%) = €41,000.
|
Updated Equity Position - Full Redemption where Property Value has Increased |
|
|
Original Property Valuation |
€400,000 |
|
Original First Home Scheme Equity Share |
10% |
|
Updated Market Valuation |
€410,000 |
|
Updated value of First Home Scheme Equity Share |
€41,000 |
|
Accrued Service Charges1 |
€1,000 |
|
Amount Payable for Full Redemption |
€42,000 |
- Accrued service charges are services charges that have accumulated on the account which are due on full redemption.
Redemptions where property value has decreased
This section explains how redemptions are calculated in the scenario where a property value has decreased.
To make a redemption the customer will need a current valuation for the property. In these examples, the property has decreased in value to €390,000.
Please note, all values used in these examples are for illustrative purposes only and are not intended to be specific to your property.
Scenario 1: Partial Redemption
If the customer redeems an amount e.g. €10,000, the new First Home Scheme Equity Share is recalculated as follows:
Redemption percentage is the redemption amount expressed as a % of the updated property valuation i.e. (€10,000 / €390,000) * 100 = 2.56%
The new First Home Scheme Equity Share is the original First Home Scheme Equity Share percentage minus the redemption percentage i.e. 10% - 2.56% = 7.44%
|
Updated Equity Position – Partial Redemption where Property Value has Decreased |
|
|
Original Property Valuation |
€400,000 |
|
Original First Home Scheme Equity Share Amount |
€40,000 |
|
Original First Home Scheme Equity Share |
10% |
|
Updated Property Valuation |
€390,000 |
|
Amount Redeemed |
€10,000 |
|
Redemption Percentage |
2.56% ((€10,000 / €390,000) * 100) |
|
Updated First Home Scheme Equity Share |
7.44% |
Scenario 2: Full Redemption
In the event of a full redemption, the First Home Scheme Equity Share is calculated as follows:
First Home Scheme Equity Share amount based on the valuation and equity share is (€390,000 * 10%) = €39,000.
|
Updated Equity Position - Full Redemption where Property Value has Decreased |
|
|
Original Property Valuation |
€400,000 |
|
Original First Home Scheme Equity Share |
10% |
|
Updated Property Valuation |
€390,000 |
|
Updated value of First Home Scheme Equity Share |
€39,000 |
|
Accrued Service Charges1 |
€1,000 |
|
Amount Payable for Full Redemption |
€40,000 |
- Accrued service charges are services charges that have accumulated on the account which are due on full redemption.
Important Information
Customers should be aware of the following FHS Redemption Rules:
- If a full redemption is made pre completion and within the first 2 years after drawdown, the redemption amount will be the amount originally drawn down.
- A property valuation from a FHS approved valuer is required for a redemption to be made 2 years or more after the drawdown (or post completion of the build, whichever is earlier) of the equity facility.
- Partial redemptions are only permitted once the build of your home is complete.
- Any redemption on a self-build will discount the % value attributed to the site at drawdown from the property valuation. The site percentage remains fixed for the term of your facility. This percentage can be found in your welcome letter, which is available in your customer portal.
- A valuation is valid for 12 months from the date of issue (other than the initial valuation).
- Only two redemptions can be made during each 12-month period after drawdown of the equity facility.
- The minimum redemption allowed is 5% of the original FHS equity amount.
- A full redemption is required in the circumstances outlined below. These are known as ‘trigger’ or ‘realisation’ events and are documented in the FHS Customer Contract:
- The customer moves or ‘switches’ their mortgage to a non-Participating Lender
- The customer sells the property.
- The customer passes away.
- The property is no longer the customer’s Principal Private Residence (PPR)
Redemption Examples
In the following examples, the site value was €100,000 and the property build cost was €300,000.
The First Home Scheme provided the customer with €30,000 equity facility at drawdown, so the FHS acquired a 10% equity share in the home. For the life of the equity facility, the FHS considers the original site value to be 25% (€100,000 / (€300,000 + €100,000)) of the overall property value and this percentage will be discounted for any redemption event.
|
Original Equity Position |
|
|
Property Build Cost |
€300,000 |
|
Original First Home Scheme Equity Share Amount |
€30,000 |
|
Original First Home Scheme Equity Share Percentage |
10% |
|
Property Site Value |
€100,000 |
|
Total Property Value (Build Cost + Site Value) |
€400,000 |
|
Site Value as % of Total Value |
25% |
Equity share = (€30,000 / €300,000) * 100 = 10%
Redemptions where property value has increased
This section explains how redemptions are calculated in the scenario where a property value has increased. To make a redemption the customer will need a current valuation for the property. In these examples, the property has increased in value to €410,000.
Please note, all values used in these examples are for illustrative purposes only and are not intended to be specific to your property.
Scenario 1: Partial Redemption
If the customer redeems an amount e.g., €10,000, then the new First Home Scheme Equity Share is recalculated as follows:
Redemption percentage is the redemption amount expressed as a % of the updated property valuation minus the updated site value i.e. €10,000 / (€410,000 - (€410,000 * 25%)) * 100 = 3.25%
The new First Home Scheme Equity Share is the original First Home Scheme Equity Share minus the redemption percentage i.e., 10% - 3.25% = 6.75%
|
Updated Equity Position – Partial Redemption where Property Value has Increased |
|
|
Original Build Cost |
€300,000 |
|
Original First Home Scheme Equity Share Amount |
€30,000 |
|
Original First Home Scheme Equity Share |
10% |
|
Site Value Percentage |
25% |
|
Updated Property Valuation |
€410,000 |
|
Property Valuation discounted by Site Value % |
€307,500 (€410,000 – (€410,000 * 25%)) |
|
Amount Redeemed |
€10,000 |
|
Redemption Percentage |
3.25% ((€10,000 / €307,500) * 100) |
|
Updated First Home Scheme Equity Share |
6.75% |
Scenario 2: Full Redemption
In the event of a full redemption, the First Home Scheme Equity Share is calculated as follows:
The First Home Scheme Equity Share amount is (€307,500 * 10%) = €30,750, based on the property valuation and adjusted for the site value percentage and equity share percentage.
|
Updated Equity Position - Full Redemption where Property Value has Increased |
|
|
Original Build Cost |
€300,000 |
|
Original First Home Scheme Equity Share |
10% |
|
Site Value Percentage |
25% |
|
Updated Property Valuation |
€410,000 |
|
Property Valuation discounted by Site Value % |
€307,500 (€410,000 – (€410,000 * 25%)) |
|
Updated Value of First Home Scheme Equity Share |
€30,750 |
|
Accrued Service Charges1 |
€1,000 |
|
Amount Payable for Full Redemption |
€31,750 |
- Accrued service charges are services charges that have accumulated on the account which are due on full redemption.
Redemptions where property value has decreased
This section explains how redemptions are calculated in the scenario where a property value has decreased.
To make a redemption the customer will need a current valuation for the property. In these examples, the property has decreased in value to €390,000.
Please note, all values used in these examples are for illustrative purposes only and are not intended to be specific to your property.
Scenario 1: Partial Redemption
If the customer redeems an amount e.g., €10,000, the new First Home Scheme Equity Share is recalculated as follows:
Redemption percentage is the redemption amount expressed as a % of the updated property valuation minus the updated site value i.e. €10,000 / (€390,000 - (€390,000 * 25%)) * 100 = 3.42%
The new First Home Scheme Equity Share is the original First Home Scheme Equity Share percentage minus the redemption percentage i.e., 10% - 3.42% = 6.58%
|
Updated Equity Position – Partial Redemption where Property Value has Decreased |
|
|
Original Build Cost |
€300,000 |
|
Original First Home Scheme Equity Share Amount |
€30,000 |
|
Original First Home Scheme Equity Share |
10% |
|
Site Value Percentage |
25% |
|
Updated Property Valuation |
€390,000 |
|
Property Valuation discounted by Site Value % |
€292,500 (€390,000 – (€390,000 * 25%)) |
|
Amount Redeemed |
€10,000 |
|
Redemption Percentage |
3.42% ((€10,000 / €292,500) * 100) |
|
Updated First Home Scheme Equity Share |
6.58% |
Scenario 2: Full Redemption
In the event of a full redemption, the First Home Scheme Equity Share is calculated as follows:
The First Home Scheme Equity Share amount is (€292,500 * 10%) = €29,250, based on the property valuation and adjusted for the site value percentage and equity share percentage.
|
Updated Equity Position - Full Redemption where Property Value has Decreased |
|
|
Original Build Cost |
€300,000 |
|
Original First Home Scheme Equity Share |
10% |
|
Site Value Percentage |
25% |
|
Updated Property Valuation |
€390,000 |
|
Property Valuation discounted by Site Value % |
€292,500 (€390,000 – (€390,000 * 25%)) |
|
Updated Value of First Home Scheme Equity Share |
€29,250 |
|
Accrued Service Charges1 |
€1,000 |
|
Amount Payable for Full Redemption |
€30,250 |
- Accrued service charges are services charges that have accumulated on the account which are due on full redemption.
WARNING: We strongly recommend that you seek advice from an independent financial adviser and legal adviser if applying for a First Home Scheme product.
WARNING: Property prices can go up and down. As the equity facility is linked to the value of your home, any change in property prices will affect any partial or final redemption amounts. If property prices increase/decrease over time, the percentage equity you have to redeem will remain the same but the € amount will increase/decrease. See examples in the case of a price increase below:
Example 1: Home Purchase (private development)
Customer purchases a property for €350,000, availing of €35,000 from the First Home Scheme (FHS) which means the FHS has a 10% FHS Equity Share in your home.
Sometime in the future you decide to buy out the FHS Equity Share. The home is now valued at €400,000. As the FHS Equity Share is unchanged at 10%, you will now need €40,000 plus any accrued service charges payable, to redeem the FHS Equity Share in the home
Example 2: Self-build (own site)
Customer owns a site valued at €100,000 and builds a house on that site at a cost of €300,000.Customer avails of €30,000 from the First Home Scheme (FHS) which means the FHS has a 10% FHS Equity Share in your house built on the site.
Sometime in the future you decide to buy out the FHS Equity Share. The property, including both house and original site is now valued at €500,000.
At the time of build, the site value represented 25% of the total value of the home (i.e.€100,000) and this 25% will now be discounted from the current value before calculating the FHS equity amount to be redeemed (€500,000 less current site value of €125,000, equals €375,000). As the FHS Equity Share is unchanged at 10%, you will now need €37,500 (10% of €375,000) plus any accrued service charges payable, to redeem the FHS Equity Share in the home.
WARNING: The First Home Scheme is not regulated by the Central Bank of Ireland and the equity product is not governed by the Central Bank and its statutory codes of conduct and/or other regulations to include the Consumer Protection Code. However, this does not affect your rights under consumer law.