Review of mortgage lending rules to be published

The Central Bank's decision-making body will today publish the results of its review of mortgage lending requirements.

It will decide whether rules governing how much customers can borrow for a home purchase should remain the same or change again.

The Central Bank introduced residential mortgage lending restrictions in 2015 in order to avoid a repeat of the property crash.

Since then it has made small changes to the rules, which limit most customers to borrowing 3.5 times their income.

Some exceptions are allowed though, with 20% of the value of new mortgages issued by each bank to those purchasing for the first time permitted above that limit.

But in the case of second time buyers, only 10% can go over that threshold.

There are also restrictions on the proportion of loans that can breach specified loan-to-value ratios.

While there is a broad acceptance that the rules are generally good for the stability of the economy, some banks and brokers are understood to be frustrated by the manner in which the rules are applied.

They would like more flexibility, with a system of rolling exemptions, rather than one which ties them to a set cap over a calendar year.

However, it is unclear whether the Central Bank will agree to their suggestions or keep the rules as they are.

Meanwhile, chief economist at Davy Group, Conall MacGoille, has said the review of mortgage lending rules is masking the main issue, which he said is the lack of housing.

Speaking on RTÉ's Morning Ireland, Mr MacGoille said the review is "tinkering at the fringes" and "it's not going to ultimately change the fact that there's a lack of housing supply, hence housing affordability is stretched".

"We could give out as many mortgages as we liked, but it wouldn't change the fact there's a lack of housing," he added.

Read more news of Dublin on our site.

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NEWS IRELAND BUSINESS ,CENTRAL BANK PROPERTY CRASH MORTGAGE RULES
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