Breaking News- New mortgage lending rules introduced
Summary
New mortgage lending rules for first time buyers, house movers and investors are being introduced . The rules do not apply to mortgage switchers. negative equity situations or mortgage restructuring situations.
The new requirements, which allow exceptions ,reinforce the strong argument to seek independent advice when applying for a mortgage.
Deposit requirement.
- First time buyers require a 10% deposit for house purchases up to €220,000
- First time buyers will require a deposit equal to 10% of the first €220,000 and 20% of the excess over €220,000 for house prices over €220,000
- Second time buyers will require a 20% deposit
- Investors will require a 30% deposit
Multiples of income
- The maximum mortgage for buyers will be 3.5 times gross annual income
Exceptions on a bank by bank basis
- Deposit limits may exceed these minimums in 15% of all cases
- Incomes multiples can exceed limits in 20% of cases
- Investment mortgages can exceed the limit in 10% of cases
We will advise you of circumstances where limit breaches might be considered.
| Price | First time buyer | Second time buyer | Investor | |
| 100,000 | 10.000 | 20.000 | 30,000 | |
| 150,000 | 15,000 | 30,000 | 45,000 | |
| 200,000 | 20,000 | 40,000 | 60,000 | |
| 220,000 | 22,000 | 44.000 | 66.000 | |
| 250,000 | 28,000 | 50,000 | 75,000 | |
| 300,000 | 42,000 | 60,000 | 90,000 | |
| 350,000 | 46,000 | 70,000 | 105,000 | |
| 400,000 | 50,000 | 80,000 | 120,000 | |
| 450,000 | 68,000 | 90,000 | 135,000 |
New Mortgage lending rules are as follows:
Loan to Value (LTV) for principal dwelling houses (PDH) There are different limits for different categories of buyers:
- PDH mortgages for non-first time buyers are subject to a limit of 80 per cent LTV.
- For first time buyers of properties valued up to €220,000, a maximum LTV of 90 per cent will apply. For first time buyers of properties over €220,000 a 90 per cent limit will apply on the first €220,000 value of a property and an 80 per cent limit will apply on any excess value over this amount.
- The cumulative monetary value of loans for principal dwelling purposes which breach either of these limits should not exceed 15 per cent of the euro value of all PDH loans on an annual basis.
Housing loans for borrowers in negative equity who wish to obtain a mortgage for a new property are not within the scope of the LTV limits. Loan to Value (LTV) for Buy to Let mortgages (BTLs)
- BTL mortgages are subject to a limit of 70 per cent LTV.
- This limit can only be exceeded by no more than 10 per cent of the euro value of all housing loans for non PDH purposes during an annual period.
Loan to Income (LTI) for PDH mortgages
- PDH mortgage loans are subject to a limit of 3.5 times loan to gross income.
- This limit should not be exceeded by more than 20 per cent of the euro value of all housing loans for PDH purposes during an annual period.
Switcher mortgages and housing loans for the restructuring of mortgages in arrears or pre-arrears are not in the scope of the Regulations.Loan to Value (LTV) for principal dwelling houses (PDH) There are different limits for different categories of buyers:
- PDH mortgages for non-first time buyers are subject to a limit of 80 per cent LTV.
- For first time buyers of properties valued up to €220,000, a maximum LTV of 90 per cent will apply. For first time buyers of properties over €220,000 a 90 per cent limit will apply on the first €220,000 value of a property and an 80 per cent limit will apply on any excess value over this amount.
- The cumulative monetary value of loans for principal dwelling purposes which breach either of these limits should not exceed 15 per cent of the euro value of all PDH loans on an annual basis.