Central Bank eases mortgage lending limits

The decision follows the Central Bank's review of mortgage lending rules which were designed to prevent another lending bubble.

Currently lenders can only offer loans up to 3.5 times the income of first-time buyers. But that is set to rise to four times from January, the Central Bank said today.The bank also raised the loan-to-value limit for those buying for the second time to 90% from 80%, putting them in line with current limits for first-time buyers.

"While not always immediately visible to people in their daily lives, the benefits of the measures are long-term," he said. "However, we are acutely aware that like all policy interventions, the mortgage measures have both benefits and costs to society," he said, adding that a lot has changed since the measures were first introduced.

"This is particularly pertinent to certain individual's situations. For example, we have seen several cases whereby an individual has gone through or is going through a separation/ divorce and needs to buy a new home having left the family home," he said. Mr Doherty said house prices will increase when there is more credit in the market but people are still chasing the same number of homes.

He said the changes are not"extreme" and income is only one aspect that is assessed in granting a mortgage.

So, to ensure affordability, when rates were low the limit was set at 3.5 times earnings. Now, when rates are going up, the limit is set at 4 times. Makes total sense to me.

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Central Bank set to ease mortgage lending rulesUnder the expected new rules, borrowers will be able to borrow up to four times their income – up from 3.5 times – but will still be required to provide a 10 per cent deposit if a first-time buyer or 20 per cent if a second time or subsequent buyer
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Central Bank set to ease mortgage lending rulesUnder the expected new rules, borrowers will be able to borrow up to four times their income – up from 3.5 times – but will still be required to provide a 10 per cent deposit if a first-time buyer or 20 per cent if a second time or subsequent buyer
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Central Bank set to ease mortgage lending rulesThe Central Bank is expected to slightly relax its mortgage lending rules from tomorrow to allow house buyers to borrow up to 4 times their income from lenders Irish establishment answer to unaffordable housing: put people in yet more debt so that developer's pockets continue to be lined. Here we go again! Nobody learning from 2008, it was 2.5 time's then, Put people in so much debt, they'll never own it, but the Banksters will take it and still expect them to cover the excess for the rest of their lives, You'll Own Nothing But You Vill be Happy,
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