EBS rule change makes it harder to get mortgage
THE EBS and its broker division, Haven, have changed their mortgage-qualifying criteria and made it more difficult for first-time buyers to get a mortgage.
Brokers said that someone on the average industrial wage would now find it almost impossible to qualify for a home loan -- particularly if they are buying alone.
The Irish Independent has also learnt that the building society will no longer provide mortgages for apartments in towns outside the main cities of Dublin, Cork, Limerick and Galway and the larger commuter towns.
EBS, AIB and Bank of Ireland are regarded as the only three lenders in the market prepared to advance mortgages to first-time buyers.
But now EBS is scaling back the amount of a mortgage applicant's income it will accept as the basis for calculating how much it is prepared to lend.
For someone with an income of €40,000, the lender will only advance them a mortgage amount where the repayments do not exceed 30pc of their disposable (or after-tax) income. This is because the lender is forcing them to set aside more money for day-to-day living expenses.
EBS and Haven will now only take account of 75pc of the second income when a couple jointly apply for a mortgage.
Financial advisers said the changes favour those on larger incomes qualifying for mortgage approval.
Frank Conway, a director of the Irish Mortgage Corporation, said: "If you are on the average industrial wage you will find it exceedingly difficult to get a mortgage."
He added that the building society had taken a view that it no longer saw value in apartments in rural towns.
"If you are living in Tralee or Mullingar and you want to buy an apartment as a starter home then forget it," Mr Conway said.
But the director of membership business at EBS, Dara Deering, defended the changes, which she said reflected the fact that housing affordability was at a 25-year low.
And Ms Deering insisted that someone on an income of €37,000 would still qualify for a mortgage of up to €180,000.