Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I understand the question and want to answer it. The first purpose of the macroprudential rules introduced by the Central Bank was to ensure that individuals did not repeat the cycle and get into unaffordable debt by incurring mortgages they could not service. Part of this was the idea that people are more likely to take on mortgages they cannot afford if house prices increase beyond the capacity to service the mortgage that would buy such houses. That is where price enters into it. It was not the primary purpose of the rules.

This scheme does not run against or circumvent the macroprudential rules but rather it assists them. If somebody can get assistance with the deposit, they would not do what many young couples are doing, which is saving half the deposit and trying to borrow the other half from the credit union or another source. It reduces the amount of indebtedness of couples who are putting a deposit together in some circumstances. As a consequence, it makes their mortgages more affordable and they are less likely to get into subsequent trouble. The Central Bank realises this and that is why I did not have a difficulty with the Governor of the Central Bank in agreeing that this was a good scheme for putting a deposit together. It helps the rules rather than running counter to them.