Tuesday 27 September 2016

Call for change in mortgage lending rules

Published 20/01/2016 | 02:30

At the moment a first time buyer couple borrowing €300,000 would need a deposit of €38,000 and a combined income of at least €86,000
At the moment a first time buyer couple borrowing €300,000 would need a deposit of €38,000 and a combined income of at least €86,000

A leading estate agency has called for an adjustment of the Central Bank mortgage lending rules.

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DNG said it was in favour of the rules, but they should be altered to allow first-time buyers to borrow up to €300,000 without having to put together a larger deposit than 10pc.

At present new borrowers can have a 10pc deposit for amounts up to €220,000. For borrowings over that they need a 20pc deposit.

The Central Bank has repeatedly said it would review the lending rules once they were in operation for at least a year. They were introduced last February.

The regulators may tighten them, loosen them or leave the lending limits as they are.

Brokers claim that up to 12,000 potential first-time buyers are stuck in "rent jail" as the limits mean they are unable to qualify for a mortgage.

DNG also wants a change in the rules to allow new buyers to qualify for a mortgage amount based on four times their income, and not 3.5 times.

At the moment a first-time buyer couple borrowing €300,000 would need a deposit of €38,000 and a combined income of at least €86,000.

Irish Independent

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