Mortgage Lending Regulations Introduced in October 2022
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Current lending guidelines
Central Bank of Ireland Mortgage Measures »
Loan-to-value limits (LTV)
The LTV limit requires you to have a minimum deposit before you can get a mortgage. The size of this deposit depends on what category of buyer you are.
- First-time-buyers need to have a minimum deposit of 10%
- Second and subsequent buyers need to have a minimum deposit of 10%
- Buy-to-let buyers need to have a minimum deposit of 30%
Loan-to-income limits (LTI)
The LTI limit requires lenders to use certain multipliers of gross income set out below when calculating their maximum mortgage.
First-time buyers (FTB)
- The LTI limit for FTBs was increased from 3.5 to 4 times income
- No changes were made to the FTB LTV limit which remains at 90 per cent
Second and subsequent buyers (SSB)
- The LTI limit remains at 3.5 times income
- The LTV limit for SSBs was changed from 80 per cent to 90 per cent
Once again, banks and other lenders have the freedom to lend a certain amount above these limits. In any one calendar year they can give an allowance to:
- 15 per cent of FTB lending can take place above the limits
- 15 per cent of SSB lending can to take place above the limits
- 10 per cent of BTL lending can take place above the limits
Ireland is not alone in introducing these kinds of mortgage measures. Many other EU countries have introduced some form of mortgage regulation to help safeguard their national financial systems.
Frequently Asked Questions (Central Bank):
Central Bank Mortgage Measures FAQ »
Government Help with Buying a Home
Help-To-Buy Scheme
The Help to Buy (HTB) Scheme helps first-time buyers to either:
- Buy a newly-built house or apartment
- Self-build a new home
It only applies to properties that cost €500,000 or less and you must live in the property as your home.
The Help to Buy Scheme gives a refund of the income tax and deposit interest retention tax (DIRT) you have paid in Ireland for the 4 years before the year you apply. The maximum you can receive is €30,000.
You can find more information on revenue.ie »
First Home Scheme
This a scheme whereby the government of Ireland, in partnership with participating lenders, provides a shared equity scheme to help bridge the gap between your deposit, mortgage, and the cost of your new home.
When you use the FHS to help finance your new home, the government can provide you with funding of up to 30%* of the purchase price/build cost of your home. In return, they will take an equity share in your home which you can buy back in a single lump sum payment, or over several payments. When you make these payments is entirely up to you.
The scheme can help first-time buyers, self-builders (first time), and fresh start applicants to secure their first home anywhere in the Republic of Ireland.
* this amount is reduced to 20% if Help to Buy is used.
You can find more information on firsthomescheme.ie »
Local Authority Affordable Purchase Scheme
Under the Affordable Purchase Scheme local authorities make newly built homes available at a reduced price for first-time and other eligible buyers who cannot afford to purchase a home at its open market value with a maximum mortgage and 10% deposit.
The local authority takes a percentage equity share in the home equal to the difference between the open market value of the home and the reduced price paid. This means that if the purchaser buys a home at a 20% reduction on the open market value, the local authority will have a 20% equity share in the home.