Friday 24 February 2017

70pc of first time buyers wouldn't get mortgage under new Central Bank plans - Ulster Bank's Brown

Colm Kelpie

Colm Kelpie

Ulster Bank CEO Jim Brown
Ulster Bank CEO Jim Brown

SEVEN out of ten first time buyer mortgages approved by Ulster Bank this year wouldn’t have met the proposed Central Bank mortgage deposit rules, the head of Ulster has said.

The Central Bank wants the amount that banks can loan home buyers capped at 80pc of the value of the property.

But Ulster Bank chief executive Jim Brown warned this morning that the proposals would impact on the ability of many first time buyers to acquire a home.

“Other hopeful first time buyers will struggle to save a higher deposit while paying increasing rents,” he told TDs and Senators at the Oireachtas Finance Committee.

“We estimate that 68pc of the first time buyer mortgages approved by Ulster Bank this year would have fallen outside the proposed LTV and or loan to income criteria.”

Earlier this week AIB chief David Duffy said the deposit rule may prove to be too high, while Bank of Ireland boss Richie Boucher has said capping loans at 80pc would lead borrowers to seek other sources of risky funding to make up the difference.

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