Sunday 30 April 2017

Call for change in mortgage lending rules

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
Charlie Weston

Charlie Weston

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

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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