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

Following a public consultation process, the Central Bank of Ireland announced its new macroprudential measures for residential mortgage lending. The regulations place certain limits on both loan-to-value, LTV, and loan-to-income, LTI, ratios for new mortgage lending. For non-first-time buyers, a mortgage will be limited to 80% of the value of a principal dwelling house. First-time buyers will be subject to a maximum mortgage LTV ratio of 90% on a property valued up to €220,000 and to an 80% LTV ratio on any excess value above that amount. Buy-to-let mortgages are subject to a limit of 70% LTV ratio. Principal dwelling loans will also be restricted to a maximum multiple of 3.5 times gross annual income.

It is important to note that there are several exemptions from these rules. For example, the principal home LTV ratio restriction will not apply to a borrower in negative equity who wishes to obtain a mortgage for a new home. Additionally, in the case of principal dwelling loans, lenders can exceed these thresholds in respect of up to 15% of loans advanced for such purposes. These regulations are a matter for the Central Bank, acting independently in its capacity as regulator of financial service providers and also in its lead role in ensuring overall banking and financial stability. It is considered these final measures adapted by the Central Bank will help to promote prudent and sustainable lending for housing purposes and contribute towards the achievement of the bank's overall macroprudential objectives. They will take effect as soon as the bank promulgates the regulations. My responsibility is to bring the promulgated regulations to the House by way of placing them in the Oireachtas Library. The House does not have any function in enacting them, either through primary or secondary legislation.

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